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Kai Ryssdal:The mayor of Cleveland, Ohio, says he’s got a new civic business model. Turns out he’s a big believer in sustainability, so he wants to find a company to supply energy efficient lighting all across the city. But he also wants that company to set up shop in Cleveland and create some much-needed jobs, using the city’s purchasing power to drive economic development. Sounds like a fine idea.
But Dan Bobkoff from WCPN in Cleveland tells us the first try didn’t quite work out.
Dan Bobkoff: For Cleveland Mayor Frank Jackson, it sounded like the perfect deal: A Chinese maker of LED lights called Sunpu Opto would locate its U.S. headquarters in Cleveland. In exchange, the city would buy all its efficient street lamps, traffic signals and office bulbs from the company for the next 10 years. It would be green, save the city money.
Mayor Frank Jackson: And potentially will create over 350 green jobs in Cleveland.
That’s the polite applause Mayor Jackson got when he announced the plan in March, but the Sunpu Opto deal quickly became a political nightmare. Many government and business leaders felt left out of the process. Competitors decried the no-bid contract. Others criticized the 10-year time frame, because LEDs are still rapidly developing.
By the time Cleveland City Council got its hands on the deal, the anger was palpable. This is Councilman Mike Polensek.
Mike Polensek: This whole process troubles me. When my gut tells me something is wrong, I’ve been here long enough to know something’s not right.
Ed Morrison of Purdue University says Polensek is right to be skeptical. He says the mayor’s plan to tie what the city buys to an economic development project is misguided.
Ed Morrison: That’s a very controversial approach. In fact, it’s usually not used in local or state government.
Morrison says cities are usually required to choose the lowest bid from lots of companies for each project. But Cleveland would be locked into Sunpu Opto’s lights for a decade, even if other firms come out with better, cheaper LED bulbs.
It also doesn’t help that General Electric’s lighting division happens to be based here in the Cleveland area. GE Lighting head Michael Petras called the deal a slap in the face and told city council that GE didn’t have a fair chance.
Michael Petras: We kept reaching out, trying to get an audience.
Cleveland Mayor Jackson says the city has never done a deal like this and made some mistakes.
Jackson: It was a little sloppy, to sum it up.
That’s why this week he asked council to shelve the plan, and is starting over, looking again for an LED supplier that can make everyone happy — whether it’s Sunpu Opto or another company.
In Cleveland, I’m Dan Bobkoff for Marketplace.
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