After irrational exuberance comes pragmatism. William Friedman took over the Cleveland-Cuyahoga County Port Authority on June 1, just seven months after Adam Wasserman resigned, ending the go-go former CEO’s grand dream of building a brand-new port at the foot of East 55th Street to lure container shipping from ocean ports.
Friedman, 49, makes retrenchment sound exciting. The former head of the Ports of Indiana infuses realism with optimism, alternating plain truth with practical goals: reviving the plan for a ferry to Canada, making the port a staging area for erecting offshore wind turbines, seeking small opportunities in container shipping.
“This isn’t the first port to have a vision and have to back away from that vision,” says Friedman, citing failed expansions from the Carolinas to Washington state. “We’re in recovery mode,” he says, “and I think our future can still be bright.”
Friedman came into the job of port CEO and president with a clean desk, thanks to interim chief Peter Raskind, the former National City CEO, who killed the East 55th Street plan this May, calling it “ill-conceived” and “never viable.”
Friedman, like Raskind, sees the port as it is: operating at less than 50 percent of its capacity, mostly moving only steel from Europe, iron ore from Minnesota and limestone from Canada. His plans for seeking new port business reflect a moderate optimism.
“If we are fortunate enough to develop some container shipping business, that would be great,” Friedman says. “First time ever on the lakes, if it were to occur here. It may prove to be sustainable, maybe not.
“Let’s see if we can get something started and use the assets we have today. And then we can make some investment decisions as we go along.”
The port can grow at its current location north of the Warehouse District, Friedman says. “I look out the window here, and I see a lot of unused space on the waterfront,” he says. In fact, the port has so much excess space, he’s ready to go forward with the last surviving Wasserman-era project, a new lakefront neighborhood on the port’s unused land north of Cleveland Browns Stadium.
“I think people living downtown is really important,” Friedman says. He likes the proposed development’s mix of homes, offices and open space as well as its street plan, strategically drawn to resist lakefront winds.
If the port ever relocates, it’ll be decades in the future — perhaps, Friedman speculates, on the landfill east of Burke Lakefront Airport or along the harbor break wall north of Whiskey Island. “I just don’t know whether any of these are feasible yet.”
Beyond the lakefront, Friedman says he’s dedicated to the port’s second mission as an economic development authority. Its bond program, in which the port floats bonds an investor pays off, has slowed along with the capital financing market, but the Cleveland Museum of Art expansion and the Flats East Bank project have taken advantage of it this year.
The port’s bond fund deals are proving especially attractive for projects of less than $10 million. “As other types of capital have dried up for some of these smaller projects, I think [borrowers are] viewing our program as a good source of capital,” Friedman says.
Soon, Friedman has to solve one of the port’s most basic challenges: where to put the dredge material from the harbor’s shipping lane once the current disposal facility fills up around 2014. That means finding landfills and brownfields to take the material in the short term, and it might also mean building a new disposal site and paying for some of it with local funding because Congress no longer foots the entire bill.
Either next year or in 2012, Friedman has to confront another cash flow question. The port authority will ask voters to renew its property-tax levy — not an automatic sell after the agency’s high-profile turmoil.
“Between now and then, we need to show some wins,” Friedman says. “We need to bring more cargo into this port, which we’re working hard to do. We need to continue to finance good projects, such as the Flats East Bank. I think if we can start Phase One of the waterfront development, I think the voters will say, ‘Yes, that’s the right thing for the port to do.’ ”
IB: What do you think of building a new neighborhood on the port’s land north of Browns Stadium?
WF: I share the widely held view that Cleveland needs better access to the waterfront, particularly downtown. There’s no marina downtown. I’m a boater, so I think there should be at least a short-stay marina. There’s no restaurant on the waterfront.
IB: What’s the future of the port’s current location west of the stadium?
WF: That’s where over time, we need to remain flexible in our approach. I think we can generate a lot more maritime business that not only creates employment here but ripples through the whole community. Right now we don’t know where else we’d do that.
IB: You’ve talked about attracting container shipping from ports such as Montreal. How is that different than the strategy your successor was pursuing?
WF: The 55th Street plan included a large container terminal — fairly large, certainly by Great Lakes standards, large. That’s overly optimistic right now.
There’s a company currently trying to start a feeder service from Montreal, Great Lakes Feeder Lines. They own two ships, they have a business plan, and they have had an interest in Cleveland. I have told them I’m happy to work with them to try to make this a port of call for the service.
There are a lot of hurdles to get over to start that up. They would need to have some sort of working arrangement with ocean carriers that call the port of Montreal, who would essentially be handing off containers to them. They’d have to have a competitive rate and show that the transit time and the frequency of the service they provide fits the needs of the customer base. And their market research indicates they could.
IB: Ohio is the No. 3 state in manufacturing output, but seventh in manufacturing exports. Are there ways the port can help to close that gap?
WF: Yeah! I think exports represent a real opportunity for us. Exporters have a hard time getting containers. Lots of ocean carriers don’t like to see containers coming inland. They like to keep the containers at the port. Then they can get them back on the ship quickly, back to Europe or Asia. I think there’s a real role for the port to play, connecting with exporters. We have to understand what their needs are. We have to understand what their supply chains look like. A container feeder service, if it gets started, [would bring a] small flow of containers into the area, coming in full. We could load them with exports and get them outbound.
IB: Right now the port mostly moves steel and iron. What are some other types of business you think it could attract?
WF: A cross-lake ferry. We’re talking about a vessel where you could just drive an 18-wheeler onto the ship and drive it off. Roll on, roll off. And passengers and passenger vehicles. It creates potential for an international border crossing in downtown Cleveland. There’d be the movement of freight, making it potentially lower cost, which is good for companies here. We already have tourist attractions here, baseball games, football games, the art museum, restaurants. If the casino is built, that’s going to be another draw. A lot of Canadians might want to come here and spend money.
IB: Some Clevelanders are hoping we build a lot of wind turbines and plant them in the lake. Would that have any impact on the port?
WF: They would need to cast these giant concrete bases that would then be put on the floor of the lake and hold up the columns for the turbines. They would do that, potentially, at the port. It could be a really good place for casting the bases, launching them, and also assembling and staging the turbine components themselves: towers, blades, cells. That could really change the port dramatically if it were to occur. We’d be an ideal location for that operation.
IB: How would you compare Cleveland and Indianapolis as a place to live?
WF: I find Cleveland a more interesting city. Don’t tell my old friends in Indianapolis! But here, you’ve got the lake. The terrain is more interesting around here, [such as] the Cuyahoga Valley National Park. I like doing things outdoors. Surrounding Indianapolis is just cornfields. There’s a lot more opportunities for outdoor recreation here. It seems like the cultural scene is pretty vibrant, a lot of things going on in the arts. There’s better restaurants here, more independent restaurants. There’s a lot of chains in Indianapolis. I’m finding a lot of things to do here.