Has 'Mistake on the Lake' Been Fixed?

ON a clear night, Cleveland's new sports complex shines under its lights like a mountain of glistening silver.

But the powerful lights of the city's sterling symbol of rejuvenation also illuminate the surrounding tumbledown tenements.

Cleveland in the past decade has clawed its way from default and decay to become the ''Comeback City,'' according to its officials and executives. The city proves that local government and corporations can revive an industrial city by relying primarily on local cooperation rather than on government help, say developers.

But the contrast of the stadium and tenement facades illustrates how renewal has so far benefited only select residents.

Indeed, the contrast symbolizes the opposite sides in a national debate that will shape urban policy far beyond where the Cuyahoga River flows into Lake Erie.

Are big buildings enough?

To city boosters, the Gateway complex is the centerpiece for a campaign that in 13 years has funneled more than $3 billion into deluxe hotels, corporate skyscrapers, and other downtown properties.

The investments will help reinvigorate the economy and lift Clevelanders out of poverty, developers and city officials say. Indeed, they and outside experts in urban renewal say the city that was once dubbed the ''Mistake on the Lake'' is pulling off a model revival.

But critics of the city's development strategy say the tax cuts that lured developers into building the breathtaking edifices have denied the public vital revenues.

Neither claim seems wholly accurate: It is too early to judge whether Cleveland's ballyhooed corporate-government alliance will kindle broadly based prosperity or just prettify the downtown. Renewal is beginning to flicker beyond the city center, but only in isolated areas.

Both sides in the debate point to solid facts. The skeptics note that despite the aggressive promotion of a ''renaissance,'' poverty, unemployment, crime, shoddy schools, and tumbledown housing persist for most city residents.

For example, between June 1990 and June 1994 Cuyahoga County, which includes Cleveland, lost 18,920 jobs, a decline of 2.5 percent. It was the only county of 16 in Northeast Ohio to see employment fall. And 42.2 percent of Cleveland residents last year lived under the poverty line, according to the nonprofit Council for Economic Opportunties in Cleveland.

The good life apparently lies just outside city limits. The per capita income of Clevelanders is just 53 percent of that of suburbanites, according to a study published last year by Wayne State University in Detroit. Among other major cities only Detroit and Newark, N.J., have greater income gaps. Cleveland leaders ''have put up new buildings downtown subsidized by the public and neglected a lot of responsibilities to the people who live in the city,'' says Norman Krumholz, a professor at Cleveland State University.

Most recently, as the school system wavers on the brink of bankruptcy, skeptics have lambasted officials for trying to raise $130 million to renovate the city's football stadium and convince the owner of the Cleveland Browns not to move his team elsewhere.

''Nothing is too good for our sports moguls -- they need something, they got it,'' says Mr. Krumholz, Cleveland's former city planning director. The city granted incentives in the $425 million Gateway complex, a baseball stadium, and a basketball arena.

Moreover, the skeptics decry how, despite faltering services, the city spent far more money than the record industry to build the $65-million Rock and Roll Hall of Fame, a stunning lake-front structure designed by I.M. Pei due to open on Labor Day.

But the orchestrators of Cleveland's construction say the array of new properties is vital to revivifying schools and other services.

By rebuilding the tax base downtown, ''we are trying to recreate the financial ability to solve the city's problems rather than just keep giving cash to the problems,'' says James Biggar, a local executive and chairman of The New Cleveland Campaign, a corporate-funded image maker.

The slick downtown skyline seems an especially lofty achievement today because the city in the 1970s sank so low. Cleveland became a cliche for urban collapse.

In 1969, the Cuyahoga was so saturated with pollution that it caught fire. In 1978, the city defaulted on its loans, becoming the first major US city to do so since the Depression. The city had lost nearly half its peak population and much industry.

The recent response by CEOs has been widely depicted as the spark for the city's ''comeback.''

Executives recruited a new mayor and launched a task force to review the management of City Hall. They also help create public-private partnerships, such as Cleveland Tomorrow.

In the 1980s the executives and city officials used political leverage to secure low-interest federal grants for downtown redevelopment. Through promotion and tax abatements they lured private investors.

But today, the sheen of the skyscrapers blots out the checkered performance of the new properties. About 23 percent of downtown office space is unfilled, according to a survey by Crain's Cleveland Business.

And the Gateway has yet to deliver on the promises made to justify its construction.

Cuyahoga County voters in 1990 approved a 15-year ''sin tax'' on alcohol and cigarettes to raise $275 million for Gateway. Builders promised the complex would create thousands of jobs, neighborhood housing, revenues for schools and hospitals, and energy assistance for the elderly.

So far, however, the payoffs have proven elusive. And Gateway has cost overruns of $18 million.

A new strategy

Chris Warren, director of the city's Department of Community Development, acknowledges that during the 1980s the city went overboard with tax abatements and favored the downtown center over city neighborhoods.

This decade, however, City Hall has made efforts to reverse itself. Officials know that to achieve a lasting comeback they must rebuild beyond the city center, according to Warren.

Since 1990, 89 percent of the $650 million dollars of investment involving tax abatement has gone to neighborhoods outside the downtown, he says.

Mayor Michael White since 1991 has used the federal Community Reinvestment Act to combat redlining and compel seven banks to commit about $1 billion to city housing and businesses.

The efforts have recently begun to bear fruit. Outside the downtown center last year, more homes were built than were demolished for the first time since the 1970s.