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Shining in the Rust Belt

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Shining in the Rust Belt

Kokomo, Indiana, is no paradise, but a working-class/creative-class synthesis has helped turn it around. Autumn 2018
Cities
Economy, finance, and budgets

In their 1988 song of the same name, the Beach Boys envisioned “Kokomo” as a mythical tropical island paradise. In the real world, Kokomo was a gritty Indiana industrial town, population 45,000, and by 2009, it was facing bankruptcy. Kokomo had historically been a successful, if workaday, Indiana manufacturing city, famous for high wages because of its major Chrysler and General Motors (later Delphi) factories. Unlike plants in many other cities, these had stayed open through multiple rounds of industry downsizing. But the financial crisis hit hard: in 2009, Chrysler, Kokomo’s largest employer, stopped paying property taxes, and unemployment peaked locally, exceeding 20 percent. A year earlier, Barack Obama made a campaign stop in Kokomo, which had already been struggling economically.

Today, Kokomo is in the midst of a multiyear transformation that’s dramatically reshaping it. Downtown is home to new co-working spaces, retailers, restaurants, and a brewery. More than 200 upscale apartments have been built across several developments, along with new senior housing and upgraded public-housing developments. Renovators are working on single-family homes in near-downtown neighborhoods. The city is expanding parks, trails, and bike lanes, and has built a downtown baseball stadium, home to a collegiate summer-league team. Every stoplight was removed from the core of downtown, every one-way street converted to two-way, and numerous intersections were redesigned with attractively landscaped pedestrian-friendly bump-outs and decorative flower-planters on streetlights. There’s a sparkling new YMCA, a central parking garage, new firehouses, and a refurbished city hall. After several decades without public transit, the city restarted bus service, which now operates five routes, all fare-free.

The catalyst for all this change has been Mayor Greg Goodnight, in alliance with the Chamber of Commerce, the school corporation, and other community groups. Goodnight is arguably the most dynamic Democratic politician in Indiana. He’s a union blueblood—he was previously president of the local United Steelworkers, and his father was formerly the regional president of the Teamsters. But he’s also a fiscal hawk who has tussled with local public-employee unions, including a bruising multi-month standoff with the firefighters. And he’s a strong proponent of creative-class-style place-making as well. Goodnight, who does not hold a college degree, gave himself a master class in urbanism by reading classics in the field from authors including Jane Jacobs, Edward Glaeser, and Jeff Speck. Books on cities line the shelves behind his desk, and he’s internalized them better than many planners. Kokomo’s infrastructure projects, in particular, are well designed, with great attention to detail. Goodnight’s leadership is arguably the model of the working-class/creative-class, blue-collar/white-collar synthesis that many believe we need today.

The mayor’s fiscal focus may have roots in his experience as a worker at a local metal-fabricating plant. The company he worked for, Haynes International, went bankrupt in 2004, and Goodnight had to persuade his fellow steelworkers to accept contract concessions in order to keep the plant open. When he took office as mayor in 2008, with the Great Recession under way, the city was already running into financial trouble. Goodnight had seen this movie before. He initiated cost-cutting actions, including a pay freeze for noncontract workers. Public-employee headcount, peaking at 521 shortly before he took office, began to shrink. It had fallen to 448 by October 2009; by October 2017, it was down to 369, a decline of 29.2 percent. The city has also kept a lid on utility and trash fees, which run 28 percent below the statewide average.

Goodnight also moved to reform services for efficiency and other purposes. Rather than have garbage trucks go up one side of the street and then down the other, the city asked residents to put garbage cans on one side of the street only, cutting the number of passes in half and earning a Bright Ideas mention from the Harvard Ash Center. Goodnight opened a city-employee health clinic to try to save on health-care costs. He negotiated an end to paying for retiree health care for some unionized workers. Kokomo’s new bus system has the lowest operating costs in Indiana.

The Kokomo Tribune considers Goodnight “the most fiscally conservative office holder in Howard County” and calls him “among the first municipal executives to recognize a government-funding crisis in Indiana.” Former Indiana governor Mitch Daniels, a Republican, said of Goodnight, “There hasn’t been a more courageous voice in either party than your mayor,” in reference to Goodnight’s support for consolidating local governments, including schools.

Goodnight benefited from inheriting a city with no nonutility debt. Combined with the Daniels-era tax-reform package that eliminated local unfunded pensions, this meant that Kokomo lacked the crippling liabilities facing many Rust Belt cities—it had a budget problem but not a balance-sheet problem. Kokomo paid for most of its recent civic improvements with cash but has borrowed to build its baseball stadium and has guaranteed some additional debt. But it still has the fourth-lowest per-capita debt among Indiana’s 25 largest cities.

Goodnight’s job was also made easier by the continued presence of the auto industry. Whatever one’s view of Obama’s auto bailout, it saved Kokomo. Though Delphi has downsized, Chrysler has expanded, both in Kokomo and in nearby Tipton. No wonder Obama chose Kokomo for a victory lap in 2010.

A primary goal of Goodnight’s transformation efforts is reversing population loss. Kokomo’s Howard County saw its population peak in 1980, at 86,896, but it was only 82,363 in 2017. By Rust Belt standards of population decline, Kokomo’s is mild, but the future is uncertain. Howard County’s median age in 2016 was 41.5, second-highest among all Indiana counties with more than 50,000 people and significantly higher than the statewide average of 37.6. The Indiana Business Research Center forecasts that Howard County’s population will drop to 74,275 by 2050.

Persuading people to move to small industrial cities hasn’t been an easy sell anywhere in the United States. Kokomo sees a potential advantage in the 8,900 people living in adjacent counties but currently working in Howard County. Many are older workers who will be retiring soon, and Kokomo leaders hope that their new civic amenities will entice them, as well as the next generation of workers in its factories, to live in the city. Time will tell if that hope pans out, and if the city can maintain its encouraging course.

Goodnight has not announced whether he will run for a fourth term. Instead of being a deep-blue city, Kokomo is a purple one, with a competitive Republican party. The changes aren’t universally popular. One critic derisively dubbed Goodnight the “King of Kokomo.” A county judge threatened to hold the mayor in contempt and put him in jail during a disagreement over trail construction near the courthouse. Goodnight’s administration has made its share of missteps, such as errors in how federal funds were applied to the stadium project.

For now, though, Kokomo continues its upgrades, with more initiatives in the pipeline, such as a new downtown hotel and conference center. The city’s economy is strong and its finances are solid. Kokomo may not be the stuff of pop-song fantasy, but in a region where so many localities suffer from manufacturing and financial collapse, its position is enviable.

Photo: Cameron Loyd

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