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The Future of Rochester: Speech to Chatterbox Club

Joel Seligman, President of the University of Rochester
March 24, 2016


Let us envision the Rochester of which we dream ten years from now.

Rochester by then will be a city of optimism and hope with its population growing, a revitalized downtown, including substantially expanded residential real estate, retail, and increased job growth led by Rochester’s innovation corridor.  Our recent graduates and our young professionals increasingly will be staying in Rochester.  We will be “cool.”  We will be “fun.”

Catalytic steps forward will be based on the $500 million Upstate Revitalization Initiative support from Governor Cuomo and the New York legislature and the AIM Photonics consortium which in aggregate has secured more than $600 million in Department of Defense, state government, and private support for investment in Rochester and throughout the nation.

Eastman Business Park will have been transformed from its near-death experience a few years ago into an international hub of technological innovation in fields such as alternative energy, food production, advanced manufacturing, and next generation technologies.

Underlying this progress will be one of the nation’s most successful efforts to address severe poverty and our City’s failing K-12 system.  City neighborhoods plagued by poverty and crime will be transformed through the coordination of social services, revitalized public schools, youth programs, and new business activity.  Critical to these efforts will be the success of the Rochester-Monroe Anti-Poverty Initiative.

Rochester’s future will be highlighted by a serious and sustained effort at job creation, not just in our suburbs, but also in the City’s core.  This will not happen by accident and will require a high degree of coordination among the State, City, and County with new and existing industry, academic institutions, and social services.

Job creation in Rochester will be notable for its comprehensiveness.  We will increase economic success for all who live in our City at every level of education and experience.

This future can happen.  It won’t be easy. It is not guaranteed.  But for the first time in decades, there is well-grounded cause for optimism about where our City and indeed our region are heading.  The Greater Rochester Metropolitan Area has added 25,000 jobs in the last five years.  Unemployment stands at 4.8 percent, the lowest rate in eight years.  New companies are relocating to the region and existing companies are expanding.

How do we make this future for Rochester a reality?  In order to understand where we are going, let us first understand how we got to our current state.

For much of the 20th century, Rochester was one of the nation’s major manufacturing hubs.  With a population of 324,975 in 1940, Rochester was the 23rd largest city in the United States, home to Eastman Kodak, Bausch + Lomb, and Western Union – companies whose products and services were known throughout the world.

The 1930s and 1940s represented a high water mark of the city’s population.  Rochester’s decline accelerated in the 1960s when our population began to shift from the City to the suburbs.  Despite these trends, companies continued to invest in Rochester well into the 1960s and 1970s, with the construction of such projects as Midtown Plaza, Xerox Tower, and Chase Tower.  Indeed, Rochester’s leading employers continued to thrive, with employment at Kodak reaching 60,400 in Rochester in 1982.

But the subsequent decline of our manufacturing took an enormous toll.  For a sustained period we have experienced what has felt like incessant economic decay. Today the city’s population stands at 210,358, placing Rochester outside of the top 100 largest U.S. cities.  Kodak’s employment in Rochester now is approximately 2,000.

The economic and social consequences for many of the residents of Rochester have been shattering.  Rochester now has one of the highest poverty rates in the nation and some of the worst performing schools in the state.

These conditions in Rochester stand in stark contrast to the economic revitalization currently under way in Rochester’s suburbs and in much of the Finger Lakes region. Ours is a tale of two cities – with a decaying urban core marked by poverty, failing schools and crumbling neighborhoods, surrounded by flourishing suburban communities with growing economic opportunity and some of the best public and private schools in the nation.

Rochester and the region now have reached a decisive moment in our history.  Never before has there existed the alignment of hope and resources that we have today.  New York State and Governor Andrew Cuomo’s focus on reviving the upstate economy, creating jobs, confronting poverty, and rebuilding infrastructure are helping fuel an economic renaissance.  The region has come together in ways that are unprecedented, with public, private, and community groups working more effectively in concert than during any recent time.  The region’s success in the Upstate Revitalization Initiative and in the Rochester-Monroe Anti-Poverty Initiative are strong evidence of this unprecedented cooperation.

The Regional Economic Development Council Initiative, the Upstate Revitalization Initiative, and Rochester’s designation as the headquarters for the AIM Photonics Initiative collectively represent more than $7 billion in potential public and private investment in our region during the next few years.

These investments will accelerate the City and the region’s transformation to a diversified 21st century knowledge based economy.  We already possess a strong foundation for future economic growth:

  • A culture of entrepreneurship dating back to George Eastman, Joseph Wilson, and Hiram Sibley. Today that ethos is continued by people like Tom Golisano, Danny Wegman, Richard and Robert Sands, and countless other individuals who are building new companies, both large and small;
  • National leadership in key areas of future economic growth, such as optics, photonics, and imaging, food production, advanced manufacturing, biotechnology, and energy storage and innovation;
  • A pipeline of technological innovation led by research at the University of Rochester and RIT – as measured by patents issued per capita, patent royalties, and sponsored research today in the hundreds of millions.
  • One of the most highly skilled workforces in the nation – evidenced by per capita degrees in engineering, science, and technology.

But progress is not assured. The City of Rochester faces three fundamental challenges that must be effectively addressed to ensure this transformation:  First, revitalizing Rochester’s economy.  Second, fixing a broken K-12 education system.  And third, substantially reducing urban poverty.

First, revitalizing Rochester’s economy.  Monroe County and the Finger Lakes region will not fully succeed without a vibrant urban core.  We have begun to make significant progress in our region.  We have far to go in the City of Rochester.

After decades of neglect and the flight of residents and businesses to the suburbs, downtown Rochester is starting to come back.   More than $840 million in real estate development is under way or planned in downtown Rochester, including:

  • The Sibley Building, the largest building in Monroe County, located at the heart of Main Street, has begun a $200 million comprehensive restoration that will include office, mixed-income residential, and retail space.  The building will be home to the University of Rochester’s High Tech Rochester’s new downtown incubator, RIT’s start-up and business incubation activities, and photonics workforce development and business incubation efforts.  Already $110 million has been raised for this effort.
  • Nearby Tower280 is completing a $59 million restoration that will convert the former Midtown Tower into 179 residential units, two floors of office space, and ground floor retail space.  The first residents began moving in earlier this year, and Bergmann Associates has announced that it will lease the entire 55,000 square foot second floor of the building.
  • The Chase Tower, renamed The Metropolitan, is undergoing a $35 million conversion to 140 residential units, along with retail and office space, with the first residential tenants expected to move in this spring;
  • The former Rochester Savings Bank building has been converted to house RIT’s Center for Urban Entrepreneurship.  The 47,000 square foot facility houses incubation activities and start-up companies.  It began operations in 2012.
  • Monroe Community College is creating a $72 million downtown campus in the Kodak building on State Street, which will open in the fall of 2017.
  • The conversion of a portion of the Inner Loop from a vehicular thoroughfare to usable land will reconnect downtown to the East End and create six acres of developable land in the heart of the city.

As a consequence of these and many other projects, the residential population of downtown Rochester has doubled to 6,000 since 2000 and is expected to exceed 10,000 within a few years.  This is a good start.  But with close to 50,000 people working in downtown and a millennial generation increasingly preferring urban neighborhoods where they can live, work, and play, there is opportunity for much more downtown residential growth.  These trends will be accelerated as more retail, more restaurants, and more entertainment locate downtown.

A separate major opportunity for growth in the City of Rochester and our region was the decision last year by the Department of Defense that Rochester will be the headquarters for the national advanced manufacturing institute for integrated photonics called AIM Photonics.

Thanks to Governor Cuomo, more than $115 million in state funds has been committed to Rochester to support this initiative.  In addition, the Governor has committed to key locations in Rochester to support the effort, including Legacy Tower, the former Bausch + Lomb Building, which will serve as the business headquarters; the Sibley Building, which will be home to the workforce development programs and a photonics business incubator; and Eastman Business Park, which will be the site of the project’s manufacturing operations.

On March 16, Governor Cuomo announced that two companies, Avogy and Photonica, will invest $1.6 billion and create more than 1,400 high tech jobs.  This is very good news.

The combination of the new business incubators at the Sibley Building and the Center for Urban Entrepreneurship, AIM Photonics, the state’s START-UP NY tax incentives for new high tech businesses, and the existing concentration of 100 companies classified as “creative class” or “innovative” has led to the creation of the Rochester Downtown Innovation Zone, a key initiative in our successful Upstate Revitalization Initiative plan.

The concept behind the Innovation Zone involves creating a geographic area where inventors, entrepreneurs, and small business owners can build relationships with researchers, experienced business owners, and venture capitalists and create new businesses that will grow and prosper.

Cities like Los Angeles, St. Louis, Philadelphia, and Pittsburgh are models for Rochester.  These examples highlight a common set of conditions that help spur job creation within the urban core – including improving safety and security in order to draw in more businesses and real estate investments, incentivizing and attracting further commercial and retail activity, and improving common neighborhood infrastructure.  These examples also point to the need to concentrate revitalization efforts in a narrowly focused geographic and industry area and potentially grow from there.

The Cortex Innovation Community in St. Louis, a bioscience and technology innovation district, for example, is the result of a focused and carefully managed effort over more than 15 years to attract new businesses and large anchor tenants.  Maintaining the focus on the Sibley Building, Midtown, and the immediate surroundings will not only yield positive results in a short time frame but will also be critical to the long-term success of the Downtown Innovation Zone.

The Downtown Innovation Zone is one of two major hubs for future economic growth located in Rochester.  The other is Eastman Business Park.  The revitalization of the Park is an example of how our community can build upon the legacy and assets of our industrial past and repurpose them for the future economic growth.

The vision for the Park is clear.  During the next 10 years, Eastman Business Park will become one of the nation’s premier locations for technological innovation and business creation.

The Finger Lakes Regional Economic Development Council has designated Eastman Business Park as the region’s top priority for each of the past five years.  During these five years, New York State has committed $100 million to the Park’s redevelopment and to support companies located there.  These efforts are already succeeding.  The Park is now home to 62 companies with a total of 4,500 employees. The majority of employees now at Eastman Business Park are not Kodak employees, and the number both of Kodak and non-Kodak employees likely will grow in the coming years.

For the City of Rochester to fully succeed, it is essential that we connect more residents with the training programs that will provide them with the skills necessary to obtain employment and succeed. This will not only enable more people to start a career, support their families, and lift themselves out of poverty, but it will provide businesses with the talent they need to grow. For Rochester job creation is not enough.  We need jobs that Rochester residents can fill.

If we are successful, these efforts could provide our region with an immediate economic return.  A 2014 survey by the Center for Governmental Research and Monroe Community College (MCC) estimated that there were 26,000 unfilled jobs in our region – primarily because employers could not find workers with the necessary skills and training.  This number will expand as more companies are attracted to Rochester in fields like photonics and advanced manufacturing.

We already have a basis for success, but these efforts need to be expanded and more tightly coordinated so that they can reach substantially more individuals and employers.

Working with high school students, the city schools, and local employers, Hillside Work-Scholarship Connection, for example, has achieved great success in Rochester.  Ninety-three percent of the students in the program who are employed with job partners go on to graduate from high school.  This program works and should be expanded.

Monroe Community College is a national leader in the field of workforce development.  Two years ago, Vice President Joe Biden visited Rochester to showcase and celebrate the success of MCC’s Applied Technologies Center, which trains individuals in a wide range of industrial skills.

MCC is now establishing an industrial training center in Eastman Business Park that will work directly with the growing number of employers at the Park and beyond.  This project has been identified as a key priority by the Finger Lakes Regional Economic Development Council that we believe should receive state support.

A significantly more daunting challenge is the revitalization of the city’s most impoverished neighborhoods.   While some of the city’s neighborhoods have undergone a renaissance in recent years, large areas in our city have experienced substantial decay.  These neighborhoods are punctuated with abandoned homes and storefronts, crumbling infrastructure, high crime rates, poor public transportation, failing schools, a lack of youth services, and concentrated poverty.

We should all feel a shared responsibility to support efforts to strengthen our inner city.  Ultimately a region is no stronger than its most struggling area.

But progress in Rochester must be led by those who live in Rochester.  Many of us feel empathy, want to offer support, feel we share the same objectives.  This is to the good.  But not all of us fully understand and feel what it means to be poor, discriminated against because of the color of your skin, or live in fear.

Progress in Rochester will depend on a conversation involving all of us.  The most essential voices are from people who live and work in Rochester.

The City of Rochester has been working with a consultant, the Democracy Collaborative, to develop a plan that focuses on small business creation and neighborhood revitalization. The Democracy Collaborative has done similar work in Cleveland, Atlanta, and other cities.

The concept is to create a network of businesses owned and operated by their workers, with the goal of building wealth and creating jobs in some of the city’s poorest neighborhoods.  Successful models in other communities have connected these new businesses with the area’s major employers to supply goods and services.

Mayor Warren and the Rochester-Monroe Anti-Poverty Initiative have proposed focusing initially on the Marketview Heights, Beechwood, and EMMA neighborhoods and have formed a non-profit called Connected Communities to manage revitalization efforts.  The University of Rochester is a member of the organization’s board of directors and has direct interest in this project, with University initiatives such as East High School and UR Medicine’s Calkins Road Medical Group.

New business creation, combined with support to improve housing, focused cradle-to-college education for children, and a mix of support services potentially can create the conditions necessary for revitalization of these neighborhoods.

But job creation alone is not enough.  Employees also must have ability to perform effectively in 21st century jobs.

Our second fundamental challenge is to fix the city’s broken K-12 education system.  The Rochester City School District is the lowest performing school district in upstate New York and has the lowest graduation rate among large school districts in the state, with only 45.5 percent of high school students graduating in 2015. City schools are plagued with high rates of absenteeism and disciplinary problems.

The result is that Rochester students are trapped in a system that does not prepare them for college or a job and robs them of the future they deserve.

Rochester’s future requires a fundamental restructuring of the city’s school system.  After years of gridlock, finger pointing, and half measures, it is time to take bold action.   The stakes could not be higher; if we do not find a common path forward and solve the problem of failing schools, then our other efforts to reduce poverty and foster economic development will be undercut.

We know that shortfalls in education lead to lower earnings, poorer health, and higher rates of incarceration.  Improving school performance is a fundamental economic development issue.  A 2009 McKinsey Study, entitled The Economic Impact of the Achievement Gap in America’s Schools, showed that eliminating the achievement gap between black and Latino school performance and those of white students would increase United States Gross Domestic Product by between $310 and $525 billion.  Other studies have shown that by raising academic achievement, we can reduce income inequality, improve race relations, and reduce crime.

Rochester is not the only city with struggling schools, and it is informative to look at the experience in other communities.  Several states and cities have made major efforts to address K-12 reform with mixed results.

In 2002, the State of Pennsylvania, for example, frustrated with a history of low student achievement and financial crisis, took over the Philadelphia public schools, replacing the school board with an appointed School Reform Commission, which then hired a Chief Executive Officer who instituted sweeping reforms.  These included turning over the management of 45 of the district’s lowest performing elementary schools to for-profit and nonprofit organizations, including the University of Pennsylvania and Temple University; restructuring 21 other low performing schools, and providing 16 other schools (known as the sweet 16) that were perceived as improving with additional resources.  An analysis by Rand Education in 2007 showed that neither the privately operated nor the sweet 16 schools made significant achievement gains.  However, the schools that remained under the control of the School District of Philadelphia showed significant progress in math and reading.   Last year, the residents of Philadelphia approved a nonbinding resolution to return the schools to local control.  The current governor of Pennsylvania shares this opinion.

Massachusetts, in contrast, has been a national leader in the charter public school movement since the 1980s.  A 2009 study shows that charter schools in the state consistently outperform their counterparts in traditional district schools on the Massachusetts Comprehensive Assessment System and in graduation rates in the City of Boston.  The study also showed that charter schools effectively targeted underserved communities – enrolment consisted of 49 percent African American and 46 percent low income students – and credited the charter schools with increasing African American student performance.

Probably the most prominent K-12 reform effort occurred in New York City under Mayor Michael Bloomberg and Chancellor of the New York City Department of Education Joel Klein.  The City underwent a massive restructuring of its school system, including centralizing the management structure, implementing a citywide curriculum, and investing in professional development for teachers. The City also shut down dozens of failing schools and replaced them with new smaller schools, an effort supported by the Gates Foundation. Students were given a choice of which school they wished to attend. The reforms also gave principals more control over their schools and fostered innovation.  While the changes were controversial, the results were impressive.  In seven years, the passing rate of fourth graders taking the state math test has risen from 53 to 80 percent, high school graduation rates have risen from 45 to 62 percent, even in the face of more stringent graduation requirements.

These experiences provide some context to what the University of Rochester is attempting to achieve at Rochester’s East High School. With the support of our local School Board, the State Education Department, four unions, and the teachers and parents of East High School, we are operating under a special statute today as an Educational Partnership Organization, the equivalent to becoming the superintendent of East High School.  We began this past September implementing a transformative plan:

  • East High was separated into two schools, a Lower School consisting of grades 6 to 8, an Upper School consisting of grades 9-12, and a Freshman Academy.
  • School days have been extended to 7.5 hours, with students in grades 6 to 9 receiving increased instruction in math and literacy.
  • Students are organized into family groups of 10 students who meet daily with faculty, staff, or administrative mentors.
  • Career and technical education programs have been expanded in partnership with local employers.
  • Over time, the student population at East High will be reduced in size from 1,600 to 1,200 students, with future admissions being made by student choice with priority given to students living in closest proximity to the school.

Our aspiration is to approximately double graduation rates for the sixth graders who enter East High School and to improve graduation rates for all other classes.

Under the leadership of East High School Superintendent Shawn Nelms, we are already seeing progress at East High.  Attendance rates are rising, suspensions have decreased by 72 percent, and we have begun to see improvements in academic performance.

Progress will require a tremendous and sustained commitment of resources and perseverance as well as considerable humility.  We need to listen to the faculty, students, and parents at East and appropriately make adjustments to provide the most successful education at East High.  We believe that at the end of the day, the University of Rochester-East High School initiative may serve as a model for revitalizing schools in Rochester and across the nation.

While East High School is a start, the problems of the City’s entire public school system are even more complex.  Ultimately, we need to restructure the manner in which we educate all of the City’s children.

There is no single right system of providing K-12 education, whether it be traditional public schools, charter schools, or private or parochial schools. Each of these approaches has had successes and also has had failures.  We need to find a means to develop a Rochester approach to building a hybrid system that will incorporate the best of all of our existing types of schools into a coherent system.

This does not mean an attack on teachers or unions, but it does mean renegotiating fundamentally different labor contracts best aligned with the interests of providing effective education for all of the City’s school children.

It also means empowering local school principals and local parents to identify the most important needs of their students and children.  We will make substantial progress at East High School by honestly identifying key deficits in learning – such as a substantial number of ninth grade students who read at second and third grade levels – and focusing on means to bring their ability up to levels where they can succeed.  We have to be honest that not all students seek an advanced college degree and develop increasing opportunities for technical education and connection to further workforce development.  We have to recognize the severe price that students in Rochester pay for poverty and urban trauma and the challenge that for many Rochester City School students English is not their first language.  These are hard problems, where progress can be made if we recognize the challenges involved and galvanize the resources to address them.

Above all else, we must recognize that the teachers and staff of schools such as those in Rochester are heroes who deserve our support and gratitude.

Our third great challenge is closely linked to the deterioration of Rochester’s economy and our failing K-12 school system. Rochester is a city of severe and concentrated poverty.

The data are sobering.  Rochester leads the nation in households subsisting on half the federal poverty level.  Second only to Detroit, Rochester leads in child poverty, with half of all children impoverished and nearly two thirds receiving public assistance.  In many areas, poverty has become deeply entrenched. In the arc of neighborhoods along the City’s northern border, known as the Crescent, the median income is less than half that of the metropolitan area.

For decades, many individuals, organizations, and public officials have struggled to address the myriad of issues that trap too many of the city’s residents in intergenerational poverty.  These efforts, while well intended, have suffered from a lack of coordination and have not reached the scale necessary to improve conditions on a community-wide basis.

Last year, at the Governor’s initiative, the Rochester-Monroe Anti-Poverty Initiative (RMAPI) was formed.  RMAPI is co-chaired by Rochester Mayor Lovely Warren, Assembly Majority Leader Joe Morelle, and now Monroe County Executive Cheryl Dinolfo.  It was convened by the United Way of Greater Rochester and is composed of more than 100 individuals representing Rochester schools, higher education, community and nonprofit organizations, healthcare, the business community, faith organizations, local government, and members of the community.

RMAPI has set an ambitious goal:  Reduce poverty by 50 percent over the next 15 years.

In September 2015, RMAPI released its initial progress report, A Roadmap for Change.  The report identified three common themes:

  • The need to invest in and create stronger communities;
  • The need to have the difficult conversations about the role that structural racism plays in denying people opportunity and trapping them in poverty;
  • The need to understand and address the impact that trauma has on the lives of the poor.

RMAPI represents a courageous beginning.  We have far to go.

The success of these anti-poverty efforts will require a close coordination with economic development efforts.  The Finger Lakes Economic Development Council has designated $100 million of the region’s $500 million in Upstate Revitalization Initiative funds to anti-poverty and workforce development projects.  We were alone among the seven competitive councils to make poverty reduction a core objective.

Last year, the City of Rochester partnered with IBM and its Smarter Cities Challenge initiative to help design a unified and efficient strategy to help lift more families out of poverty.  This is a critical imperative.  If we do not succeed in reducing the number of people living in poverty, we ultimately could have more people living in poverty in Rochester than there are in the workforce.

The IBM report, released in January of this year, is informative in identifying the key challenges and opportunities that the city and RMAPI must address.

  • The system of services that support the poor is fragmented, uncoordinated, and misaligned and results in too many people falling through the cracks.
  • We must address barriers to that prevent the sharing of data among organizations to improve the coordination of services, measure impact, and drive accountability.
  • As currently designed, service programs tend to be reactive and not proactive.  Attention must also be paid to families that are at risk of falling into poverty.
  • And finally, we must tap into the unrealized potential of our neighborhoods and communities.

The last item is fundamental to what we are striving to achieve and how we will realize our vision for Rochester.  The people who live in our communities possess the talent, the ideas, and the determination to create a brighter future for themselves and their families if part of a unified community effort.

Make no mistake.  Overcoming the City of Rochester’s challenges will require leadership and resources from our business leaders, from our elected officials, university and college leaders and faculty and from the state and our Governor.

But it will also require the commitment, ingenuity, and hard work of those who have been the victims of history, geography, apathy, racism, demography, and economic trends beyond their control to lift their own communities out of poverty and demand a better education for their children.

The challenges that face our community are no doubt massive and will require that we work unrelentingly hard to overcome them.  But the level of collaboration we have witnessed over the last several years – whether it be among the 450 stakeholders and Work Group members that comprise the Finger Lakes Regional Economic Development Council or the hundreds of members of the community who have rallied behind RMAPI – shows that we know how to be united and we are determined to not let this once in a generation opportunity fail.

United we can succeed if each of us, including those here tonight, join in working to strengthen Rochester. Our future can be transformed.  But our future also must be earned.  This will only occur if we listen to each other and work together as one community.

As the President of the largest employer in our region, I pledge the continued commitment of the University of Rochester to help make Rochester the city of which we dream.

We are in this together.  The University of Rochester is a committed member of our team.