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San Bernardino Civic Plaza. Struggling after the 2008 economic crash, the city filed for bankruptcy on August 1, 2012. - 

In 1948 brothers Richard and Maurice McDonald decided to reinvent their family barbeque joint. They came up with a new technique for making French fries that used desert winds to dry potatoes in a shed behind the restaurant. But the most popular item on their new menu was the 15-cent hamburgers. The place which they called McDonald's was located on E Street, the main drag of San Bernardino, California. They couldn't have picked a better time and place.

Residents who grew up in San Bernardino told me that the movie "American Graffiti" is a perfect example of what life on E Street was like in the '50s and '60s. Hot rods would cruise the street at a crawl and drivers would talk to each other through their open car windows. People would line up on the sidewalk with lawn chairs. Every summer night was a parade.

Most people in San Bernardino at that time worked at Norton Air Force Base or Kaiser Steel, companies that provided thousands of good middle-class jobs. People were coming to the city in droves on the newly paved Route 66. The city was immortalized in the song “Route 66” which The Rolling Stones covered on June 5, 1964 when they played their first show in America at the Orange Show Fairgrounds San Bernardino.

But the boom didn't last. Both Norton Air Force Base and Kaiser Steel closed, and the city never recovered. Today, more than half of San Bernardino's population receives public assistance. The per capita income is $15,600. Detroit is the only city in the country that is poorer. The city was on its knees and the recession dealt the final blow. On August 1 of this year San Bernardino filed for bankruptcy.

E Street Today
Al Palazzo Grew up in San Bernardino. He remembers working as a bus boy at a coffee shop on E street. He took me on a tour of the city last week and showed me how dramatically the city has changed since he was a kid. I sat in the passenger seat of his Toyota Corolla as he pointed out the dozens of vacant lots that line the once booming E Street.

"This was the main drag in San Bernardino? This is a slum," he said. "This is not a viable commercial street. What's going to bring it back? Change the housing."

Palazzo believes that the key to fixing San Bernardino is to build new middle class, high density housing along E street and other areas close to downtown. But changing the housing is just one idea. Nearly everyone in San Bernardino has a solution for how to get the city back on its feet. One plan is to use eminent domain to seize foreclosed homes. Another involves a parent takeover the public schools. One person told me the city's 200-year-old sewage system should be at the top of the list. 

Citizen Groups Form
Tim Prince is an attorney in San Bernardino. His father served as the city attorney for 28 years. Prince is the founder of the Citizens for Accountable City government, one of several groups that have popped up in San Bernardino. He thinks the budget deficit was caused by the police and fire unions.

"There's no doubt about it -- 73 percent of the city budget goes to police and fire union benefits," Prince explained.

Tim Prince founded the Citizens for Accountable City Government. Photo by Russell Calkins

Another group, The SBC Town hall has a different view.  I attended the group's most recent meeting at the San Bernardino Elks Lodge, which sits on a hill overlooking the San Bernardino valley. When I arrived an hour early the only other person in the parking lot was  a tall man with shaggy gray hair fumbling with a couple of giant posters and an easel in the triple-digit heat. Sixty-three-year-old local business owned Hans Van Der Touw was one of the speakers at the event.

The mostly white-haired crowd went wild for Van Der Touw. One person demanded he run for mayor. Van Der Touw believes everything but public safety should be cut. In his speech, he compared San Bernardino to Rome, a city under siege by barbarians.

"The city hall is not in charge of the city," he said at the meeting. "It's the criminals. They are the ones that have been able to chase the working middle class out of the city."

A few days after attending the San Bernardino City Town Hall meeting, I sat in on a meeting held by the Concerned Citizens Coalition -- which was started by Concepcion Powell, the president and founder of the U.S. Hispanic Women's Grocers Association.

She's been in the grocery business a long time. At seven years old she opened her first store, selling candy and cookies out of the back of her family's home. By the age of 12 she had savings in the bank. Powell is 53 now. She believes that the key to San Bernardino's prosperity is the city's international airport.

"They invested $228 million in the international airport is sitting there it looks like it's abandoned," she said.

Grounded: The San Bernardino Airport never took off. Photo by Russell Calkins

Powell wants to transform the empty airport into a global business hub and invite foreign investment into the city. Though these community groups don't always agree on how to save San Bernardino, they do agree on one thing -- the current government is dysfunctional. Powell says the city council, mayor and attorney act like children.

"Yes, they're just big kids," he said. "Like first grade, second grade getting into these kid fights and just get carried away."

Of course San Bernardino's problems are much more adult. The crime rate is one of the highest in the nation. The education system is a mess. The city's infrastructure is in disarray and more than a third of the city's residents fall below the poverty line.

The biggest question might be, "Where to begin?"

Marketplace will try to answer that question with our series of reports on San Bernardino.


CORRECTION: The text version of this story has been edited for grammar and punctuation.

Follow David Weinberg at @@randomtape