How to ‘Turn the Tide’

Chris Gabrieli wouldn’t use the words ‘easy’ and ‘hard’ to describe the work already completed by the Finance Control Board in Springfield, and that which still remains to be done.

“It’s all hard … very hard,” said Gabrieli, who was recently appointed chairman of the board by Gov. Deval Patrick. “But it’s hard in different ways.”

Elaborating, he said the progress made to stabilize the city financially and gain new contractual agreements with most city unions was hard because the steps taken to achieve it were politically unpopular and impacted the lives of city workers and residents alike.

“It’s hard to drive change when there is real sacrifice involved; there are people who have paid a real price for those changes,” he said.

“It’s almost a zero-sum game. For the city to balance its budget means in large part it is spending less money on some things it was spending more money on before. And that ‘more money’ predominantly went to people.”

As for the work ahead, “turning the tide,” as he put it, from a social and economic development standpoint, is politically easier — “we’re all for it” — but hard because the problems come with no simple, controllable solutions.

“The next set of levers — deeply improving schools or trying to figure out an economic strategy that will lead to a healthy boom in high-paying jobs — those aren’t directly under the control of any government, especially local government,” he explained. “So that’s hard in a different way.”

But these are issues and challenges being faced by dozens of cities across the country that, like Springfield, thrived in an industrial economy but have struggled to make the adjustment to a knowledge-based economy, he said, adding that the collective attention being paid to such intertwining issues as crime, education, housing, and finding new sources of jobs could help Springfield achieve real progress in those areas and others.

“The 19th and 20th century economies built around factories were very decentralized; many, many cities boomed in that setting — there were mostly winners,” said Gabrieli, a successful businessman but unsuccessful gubernatorial candidate in 2006. “But the 21st-century economy tends to have winners and losers geographically.

Putting Springfield in the latter category, where it has lots of company in the form of many Northeast urban centers, Gabrieli said the next (and probably last) two years of control board duties will be focused on advancing efforts to put Springfield in the ‘winners’ category.

In this issue, BusinessWest talked with Gabrieli about his new role in Springfield and his current work to craft a business plan for the control board moving forward.

City Limits

Gabrieli said he has a personal attachment to Springfield and its plight — sort of.

He was born and raised in Buffalo, N.Y., a city of some half a million people and not one but two control boards, one county and one city.

Like Springfield, Buffalo thrived in the 19th and 20th centuries (or most of them) with jobs in steel, auto parts manufacturing, grain processing, and other sectors. “Now, they’re gone, or only tiny fractions of them remain,” he said, adding that he monitors progress, or a lack of it, in his hometown from afar. “The city is still struggling; these are hard problems it’s facing.”

The same can certainly be said of the City of Homes, he said, adding that many city residents and officials mistakenly believe that the problems they face are ‘Springfield-specific,’ as he put it.

“That’s a huge misunderstanding for people to think that way,” he said. “This is a national problem … there are dozens of cities struggling with the same issues.”

This fact should help in that ‘tide-turning’ process he described, because many think tanks are now focusing on the plight of large urban centers in the 21st century. “The Brookings Institute has been on this for a while, and there are a number of groups studying what’s happening in our cities.”

It was the opportunity to be part of what will certainly be a regional and national effort to revitalize struggling municipalities — and take a lead role in a community he came to know and understand during the ’06 campaign — that prompted Gabrieli to accept Patrick’s offer to chair the control board.

“It’s important for Springfield and important for the state,” he said of the board’s assignment and the obvious need to succeed. “Before I said ‘yes,’ though, I had to take a look at Springfield’s situation and the control board’s situation to make sure that I could be useful.”

Gabrieli brings to his assignment a resume replete with triumphs in business and considerable work with nonprofits and public policy, particularly in education and lengthening the school day. A co-founder of the health care software company GMIS, he later joined Bessemer Venture Partners, where he remains active as a senior partner focused on the biotech sector.

From 1996 to 2002, Gabrieli served as chairman of MassINC, a non-partisan, independent policy think tank, and he currently serves as chairman of Massachusetts 2020, which leads the state’s first-in-the-nation initiative to redesign and expand learning time in public schools.

Gabrieli admitted to being somewhat embarrassed that he couldn’t clearly recall his stance on the control board during the gubernatorial campaign — specifically whether it was still needed and for how long. But he is solid in his belief now that, while many, especially those within the business community, feel more secure with the control board in place, soon the city needs to take control of its own fortunes.

“I think it’s important when you have a control board like this that there be a very clear path to restoring self-government,” he said. “It is efficient to have a control board, and there are some important things you can get done with the advantage of both the autonomy and amount of power invested in it.

“But ultimately, messy though it can be,” he continued, “democracy and self-rule are the best things for local government.”

Issues and Answers

Before such self-rule can be restored, however, the Patrick administration has deemed more direction from the control board is necessary, and in areas that go well beyond restoring fiscal order.

“I think the board has played a powerful role in re-setting Springfield’s financial system, its budget drivers, and other things, to the point where the city can be reasonably healthy from a financial standpoint on its current basis,” said Gabrieli. “That was difficult, and it took an autonomous, outside force to get it done. But the harder problem is to fundamentally turn the tide; what can be started in conjunction with the state and other, private forces beyond city government in Springfield to move Springfield forward?

“Very little of what the control board did in its first three years was aimed at that, nor should it have been,” he continued. “They had to deal with a serious fiscal crisis, and that demanded all of the board’s attention.”

Elaborating on the work still remaining for the control board, Gabrieli said it comes down to what he called “four streams that run together into a negative cycle that reinforces itself”:

• The economy and the as-yet-unsuccessful quest for new sources of jobs;
• Public safety, meaning crime and the perception of same;
• Education, and, more specifically, high dropout rates and low percentages of college graduates within the city;
• Springfield’s “demographic challenge,” meaning the flight of the middle class to the suburbs and the resulting preponderance of lower-income families in many neighborhoods.

There is no clear ranking of these issues in terms of priority, he said, nor any need to do such an exercise, because they all need to be addressed simultaneously and with equal vigor.

To tackle the remaining challenges, the control board will be developing a business plan, he said, and hiring a new CEO to carry it out. That individual is Stephen Lisauskas, who succeeds Phillip Puccia after serving as his primary assistant for the past two years, and was considered a logical choice by the board.

Moving forward, Lisauskas, a soon-to-be-hired deputy director, and others will continue to focus on ways to restructure and institutionalize financial processes and policies, said Gabrieli, while also working on those societal and economic development-related issues that will ultimately determine the city’s ability to fully recover.

“If you were to go forward 20 years from now, the things that the control board has done and will continue to do to provide strong fiscal systems now won’t make much of a difference in 20 years either way,” he said. “They will help a lot to make sure that, over the next five to 10 years, Springfield isn’t fighting fires on the fundamental fiscal issues, but if you were to ask, will the city be any healthier and stronger in 20 years, the answer is probably not.

“I think long-term health rests on those other issues, like education and jobs,” he continued, “which are way beyond budgeting.”

While he has focused much of his civic energy on education, with Mass. 2020 and other initiatives, Gabrieli has also been involved in job creation through Bessemer, and understands that tapping into new sources of employment is critical to the city’s chances for achieving a real turnaround.

“The jobs that made Springfield great in the 19th and 20th centuries are vanishing; we’re still seeing significant job loss in manufacturing,” he explained. “We should do everything we can, obviously, to preserve what’s left, but manufacturing is not going to be the base for healthy growth in Springfield in the future.

“Cities need an economic driver,” he continued. “What will Springfield’s be? That’s a question that still hasn’t been answered, and we need to answer it.”

For some Bay State cities, answers have been found, but they center largely around geography, meaning they’re within commuting distance to Boston and other communities inside Route 128 that have thrived in the knowledge economy, he said. Lowell is perhaps the best and most noted success story, he told BusinessWest, but Worcester and other former manufacturing centers have also benefited.

“Those cities have an edge that Springfield just doesn’t have and won’t ever have,” he explained. “That’s going to make it that much harder to find an economic driver.”

On the Clock

When asked how much the control board can accomplish over the next two years, Gabrieli said there are a number of variables that could impact that equation — from the level of state assistance to work nationally on the myriad issues impacting urban centers.

One thing that is known is that progress won’t be achieved quickly or easily, in Springfield, Buffalo, or any of the other former industrial hubs now looking for the proverbial ‘next big thing.’

That’s because, as Gabrieli said, all of this work is hard.

George O’Brien can be reached at[email protected]