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As the mayor of a small Indiana city, Buttigieg applied his low-key technocratic style to economic and social dysfunction. Now he wants a chance to fix the country.
Simon Simard
Author: Paul Tullis
Paul Tullis
backchannel
04.11.19
07:00 am
Pete Buttigieg Revived South Bend With Tech. Up Next: America
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In downtown South Bend, Indiana, there’s an ugly concrete building where people can pay their water bill in person. When Pete Buttigieg first became mayor, in 2012, at age 29, this fact drove him insane. “How the hell is it that we’re still collecting cash payments in person for utilities in a modern city in the U.S.?” he asked me, faithfully reproducing his earlier exasperation.
South Bend was struggling economically, which meant the city needed to get more efficient and fast. Closing the payments office would be a step in that direction. Buttigieg once told a reporter that his "primary interest is using technology to improve people’s lives.” The payments office seemed to be doing neither.
But Buttigieg changed his mind about shutting the place down. “It turns out there are enough people who are completely unbanked,” he told me, “or so socially isolated that this is one of their few outings, that there’s an uncapturable virtue to having this there even though it doesn’t pencil out.”
Buttiegieg applied his technocratic know-how to South Bend's public services.
Lyndon French
Buttigieg’s election brought with it the promise of a South Bend that would pencil out—that city government would be run with technocratic efficiency by a local boy who had gone off to Harvard, Oxford, and McKinsey and returned with data-driven wisdom. He campaigned on a platform to revitalize South Bend’s economy, which had been slowly collapsing for 50 years, ever since Studebaker, once the country’s fourth-largest automaker, closed its factory in town in 1963.
In the following decades, offshoring and other structural changes turned the nation’s thriving manufacturing centers, from central Pennsylvania to western Illinois, into the Rust Belt. South Bend, 90 miles east of Chicago, oxidized more than most: Population and per-capita income declined, and in 2011, Newsweek named South Bend one of America’s 10 "dying cities.”
The city is making its way out of its rust-belt past, but progress is incremental
Lyndon French
Lyndon French
Buttigieg brought data, flow charts, and McKinsey-esque analysis to city government—as well as a bit of philosophical humanism. Since he became mayor seven years ago, unemployment in the city has fallen, from 13 percent in 2010 to 3.2 percent last fall—below the national rate—and South Bend has seen its first significant population increase in half a century. (Unemployment has since ticked back up, to 4.3 percent.)
The country itself was in recovery from the Great Recession during those years, but Buttigieg undertook specific changes that pushed South Bend up the hill. Part of the old Studebaker site is now home to a data-storage and analytics firm; Buttigieg invested city dollars in transforming its largest factory—the prosaically named edifice known as Building 84—into 800,000 square feet of offices where tech and biotech companies are now headquartered. Other former factories are being converted to apartments, and downtown has seen its first new construction in almost 30 years.
In the lobby of Building 84, where new enterprises are emerging, the glory days of its past as a Studebaker plant are still celebrated.
Lyndon French
The day before I met Buttigieg, in December, he announced he would not be running for a third term as mayor. Everyone in town knew what that meant for the man President Obama had named as one of the hopes for the future of the Democratic Party: Five weeks later, he launched a presidential exploratory committee and has since been spending little time in South Bend.
Instead, he has been in Iowa speaking to small groups in living rooms, appearing in Austin where he was greeted by hipsters at South by Southwest, and making the interview rounds on television, podcasts and with national publications. (The first topic is invariably how to say his name—"BOOT-edge-edge” or “Buddha-judge.”) His televised appearance on a CNN town hall in mid-March sparked the current boom of Buttigieg enthusiasm.
He’s getting more social media engagement than the other Democratic candidates and recently announced that he’d raised $7 million in campaign donations. That’s a long way from Bernie Sanders current haul of $18 million, but quite a showing for the mayor of a mid-size Midwestern city.
Buttigieg is having a moment.
Simon Simard
The obvious knock on Buttigieg is his youth—he’s 37—and the presumptuousness that often comes with it. How does running a city of 100,000 for eight years qualify you to be president? Buttigieg’s response is to spin his weakness as asset.
He talks about being part of the school shooting generation (he was 17 when the Columbine murders happened) and young enough that what governments do—or, more to the point, don’t do—to prevent further climate change now will affect him personally. Unlike most of the other candidates, he served in the military, in Afghanistan, and he has spent time in corporate America. (He worked as a consultant from 2007 to 2010.)
But the central pillar of his story is his record as mayor of South Bend. “We propelled our city’s comeback by taking our eyes off the rearview mirror, being honest about change, and insisting on a better future,” he said in a video on Twitter announcing his intent to run for the Democratic nomination. It shows him walking in an empty hulk of Building 84 and cuts to him treading the same floor, modernized to a workspace that would be familiar to anyone in Silicon Valley.
I lived in South Bend when I was a kid, for parts of the 1970s and ’80s. Back then the place could be fairly characterized as a dump. Stores at Scottsdale Mall, where we went to the movies and did our Christmas shopping, were getting boarded up less than a decade after it opened in 1973. It closed in 2004.
Tearing down the empty Studebaker buildings, just south of the decaying downtown, was too expensive. So they just stood there, falling apart before our eyes, an on-the-nose metaphor for indifference toward those who had been forgotten in the transition from a manufacturing to a service economy. Bitterness about that indifference continues to surface in presidential politics and has arguably swung every competitive election since 1980.
The city paid to refurbish Building 84's facade and for environmental remediation.
Lyndon French
Now it's a workspace that would be familiar to anyone in Silicon Valley.
Lyndon French
In December I returned to South Bend for the first time in two decades to see what’s changed and how much the change can be attributed to a man who wants to be leader of the free world. (He’s expected to make his bid official this Sunday at a rally in South Bend.)
Buttigieg’s presumed candidacy—he leapt to third place in an Iowa poll late in March—is based on the belief that the city’s transformation can be a model for other cities and towns where jobs lost to globalization and the deteriorating power of labor gave way to the politics of resentment. So it seems reasonable to ask: If Pete Buttigieg can make it work there, can he make it work anywhere?
One thing I’d forgotten about South Bend was the bleak winter mornings. Many people go to work in the dark, and the sun hadn’t yet risen when I arrived at the city-county building for my 8 am interview with the mayor.
His office overlooks the poorer west side of town, where steam from an ethanol plant built in the 1980s was rising in the distance. The sickly-sweet aroma it produced was one thing I had not forgotten (though Buttigieg was quick to tell me that recently installed controls had greatly reduced the pernicious fumes).
Buttigieg’s parents were both English professors at the University of Notre Dame, which borders the city, and raised their only son in South Bend, where he attended private and Catholic schools. (Buttigieg’s father, an immigrant from Malta, died in January.) After Harvard, the younger Buttigieg spent a year working on John Kerry’s campaign for president, then took a Rhodes scholarship at Oxford University, earning a master’s degree in philosophy, politics, and economics.
When I was growing up, it never occurred to me to live in South Bend as an adult. The real opportunities lay elsewhere. Buttigieg had the same mindset. “I grew up on the narrative that success means getting out, so that’s what I did,” he said. After his time at Oxford, Buttigieg took that job with McKinsey in Chicago.
Traveling the country (he specialized in energy and grocery pricing), he found that “the downtowns of America’s biggest and wealthiest cities started to come back to life,” he said. “You start asking yourself, ‘Could that happen in a small city like South Bend?’”
Buttigieg promised to refurbish or demolish 1,000 blighted buildings in 1,000 days. He succeeded.
Lyndon French
Buttigieg’s first big initiative as mayor was to address a complaint he had heard while knocking on doors during his campaign. South Bend’s slow decay had left it pockmarked with vacant and abandoned houses—a blight that reduces tax revenue, increases inspection and policing costs, and leaves residents feeling discouraged and forgotten.
Buttigieg promised to refurbish or demolish 1,000 such homes in 1,000 days. The goal was “almost childlike in its simplicity,” Buttigieg told me, but the execution quickly became complex. Which houses should be torn down, and which stood a good chance of selling on the market, obviating the need for city intervention? Does selecting one home for demolition affect the prospects for other homes on the block? Who is the right person at the utility to lean on to shut off the gas before the bulldozers arrive?
He convened a task force from city departments, the city council, and community groups. Interns drove around town identifying abandoned properties, or traced deeds to absentee owners. “We built a really advanced picture and published a report with the typology of neighborhoods and matched different tactics to different methods,” Buttigieg said. He beat the deadline.
“It was a huge initiative and enormously hard,” said John Affleck-Graves, executive vice president of Notre Dame. “But that persistence—set the goal and make it happen—it just built pride.” Maybe South Bend wasn’t a lost cause after all. Maybe Buttigieg was a guy who could get shit done.
The experience influenced Buttigieg’s formation of SBStat, a data-driven model of troubleshooting city services informed by Baltimore’s CitiStat. Working at McKinsey, Buttigieg said, “I began to understand the concept of data structure in ways that really mattered later for how I approach campaigns and governing.”
When Buttigieg became mayor, the city didn’t have a systematic way to track existing problems or know whether they were getting solved. He would ask the staff about their performance measures and find out they didn’t have any, or if they did, the measures weren’t useful. “To the extent code enforcement tracked productivity,” he said, by way of example, “it was in terms of how many violation letters they sent out. Which is a measure of activity, but it doesn’t mean they’re getting fixed.”
Buttigieg envisioned SBStat as a grand dashboard that could show him at a glance all the issues popping up across departments. “Sim City—that’s what I wanted,” he said, smiling at his naivete. It instead developed into something more mundane but still useful: SBStat tracks individual departments, collecting data on goals and whether they are being met.
At a Parks Department meeting in December, a flatscreen on one wall of the conference room showed a dashboard with the percentage of targets met for a number of park maintenance goals, like the amount of canopy coverage and graffiti removed within 48 hours.
Clearing out the old was a critical first step. Bringing in the new followed. While the former Studebaker site had been seen as an albatross, it contained potential riches. Building 84 sits beside the convergence of two major railroad lines connecting Chicago with Detroit and New York.
Trucks had replaced the freight trains, but the tracks became critical in the digital age. During the dot-com boom of the late 1990s, telecoms started buying up railroad rights-of-way across the country, and dirt beneath the tracks in South Bend soon ensconced the densest concentration of fiber-optic cables in the country. (Like the boxcars, the electrons need to go around Lake Michigan).
A local entrepreneur and Notre Dame grad named Kevin Smith saw that value and bought the old train station, on the other side of the tracks from Building 84. He turned it into a data center, leasing space to telecom and cloud services companies that benefit from the millisecond efficiency gains of being close to a fat internet pipe.
South Bend has a rail line that connects Chicago with New York. And underneath those tracks is one of the densest concentrations of fiber-optic cables in the country.
Lyndon French
Later, in 2013, Smith bought Building 84. Some mayors offer companies generous tax breaks and abatements to bring jobs to their cities—deals that have not always worked out as planned and opened them to charges of doling out corporate welfare. (Amazon’s plan for a second headquarters in New York was sunk by such concerns.)
Buttigieg has resisted that strategy, trying to leverage city money with calculated discretion. He says he generally sticks to a cap of $1 of city investment for every $5 from the private sector. Building 84 penciled out, and the city paid to refurbish the facade and for environmental remediation.
The idea was to attract more companies wanting to take advantage of abundant “dark fiber"—cable laid for extra capacity that can be leased to whomever needs it. Now Smith is retrofitting the building so that excess heat from the data center computers gets siphoned off to warm the offices.
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