How a state takeover revitalized a city

Last of four parts

CHELSEA, Mass. - At Teriyaki Yummy, an Asian fusion joint that opened this year, city manager Jay Ash introduces himself to the owners. He looms over the front counter with a 6-foot-7 frame and a smile wide enough to match. "Hi, I'm Jay, I run the city," he says.

Around the corner at Tequila's, Ash hops into a booth and invites the female foodies beside him to write restaurant reviews on the city Web site. Call the blog the "Three Divas," he says.

By the end of the night, as part of a charity tasting event at 14 mostly new restaurants in downtown Chelsea, a postindustrial city across the Chelsea River from Boston, Ash has sampled Middle Eastern baba ghanoush and Salvadoran horchata juice.

Two decades ago, having new eateries here (particularly without mobsters or illegal slot machines) would have been unthinkable.

But after becoming the first American municipality to lose democratic rights since England ruled the land, Chelsea - now led by its cheerleader, Ash - is back, financially and democratically. Vacant factories have become lofts, an industrial waterfront has attracted Bostonian hipsters, and public schools have become city assets.

Chelsea stands in stark contrast to another city that sits in the shadow of a major American metropolis and endured decades of industrial job loss, political corruption, and pervasive crime before being taken over: Camden, N.J.

The 1991 state takeover of Chelsea inspired the 2002 state takeover of Camden, officials in both states say, but while Massachusetts tackled political and bureaucratic reform, New Jersey funded studies but changed little. While Chelsea got a modern government receptive to citizen concerns about good schools and safe streets, Camden is a broke, bureaucratic nightmare with poor schools and a persistently high crime rate. While Chelsea's officials actively sought market-rate housing developments and businesses that hire unskilled labor, Camden still lacks middle-class housing and jobs.

And while Camden's takeover continues after seven years, democracy in Chelsea returned ahead of schedule, in three years.

Still, it's not too late for New Jersey's poorest city. A new governor and new mayor are coming in, and if politicians reevaluate control of Camden in the coming months, as they have vowed to do, Chelsea could serve as a model for Camden's next chapter of recovery.

"Camden is not alone. There are cities across the country that have Camden's problems," said Howard Gillette Jr., a Rutgers-Camden history professor who wrote the 2005 book Camden After the Fall.

"But there's a combination of problems in Camden that have exacerbated all of the underlying structural issues."

In Chelsea, the structural issues were first on the agenda. Four previous Chelsea mayors had been indicted (compared to three in Camden), including one who reportedly sought the job because "the tips were good."

Massachusetts officials eliminated the mayor's position and fired the elected aldermen. The governor, Republican William Weld, appointed a Democratic millionaire-entrepreneur, Jim Carlin, to run Chelsea as a receiver. (In Camden, the government structure remained intact under a state-appointed chief operating officer.)

Carlin, who had only been to Chelsea twice, took a $1 salary and cleaned house, not caring whom he angered. Along with his deputy and successor, Harry Spence, the good cop to Carlin's bad cop, these polar opposites created an urban miracle.

Carlin was a "bull in a china shop," said Ash, a Chelsea native who served in state government at the time, "a terror in a good way."

Carlin and Spence ran up against public employee unions in demanding that dead weight be moved out. They stopped letting employees use 15,000 gallons of gas each year for personal use, and canceled clothing allowances, which most had.

They told the police vice squad it could no longer take all weekends off. And they shut down an illegal strip club where the waitresses were cops' wives who tipped off the owners about impending raids.

At the fire department, the duo reduced paid holidays, sick leave, and overtime, fired several firefighters for labor abuses, and cut the budget nearly in half.

"Sometimes democracy doesn't work," Carlin said at his home in Newport, R.I. "Sometimes you have to empower an individual or a couple of individuals to come in and do it fast. And maybe that's a crapshoot if you get the wrong guy."

Change wasn't accepted easily. A top fire official told Carlin that perhaps his house could be on fire and no one would show up to put it out.

Carlin's response is not printable.

"When Carlin came in," said Ash, "if you had any affiliation with the government of Chelsea, he automatically thought you were bad. . . . He just assumed all the barrels had worms."

If he ran the city as an elected official, Carlin says now, he couldn't have done what he did, because politicians want to "make people as happy as possible."

And the democratic process can be time-consuming. "I don't like to spend three weeks being sure everyone has input."

A former commissioner of commerce and secretary of transportation for Massachusetts, Carlin persuaded the state to open a data processing center in Chelsea, providing 1,000 jobs, and demanded that Logan International Airport pay $5 million in lieu of taxes for its property in Chelsea.

And he worked from an office with three metal chairs and a door that never closed.

Meanwhile, Spence presided over the details and succeeded Carlin when he left Chelsea after just 11 months. Now a Harvard professor, Spence is credited with building the foundation for a new city after Carlin blew everything up.

When he left, Carlin took with him a lot of the community's anger about the takeover. "Which was great for me," Spence said. "I'm the guy who's going to get this back into shape again."

Spence said he focused on crime issues, and was shocked at how intertwined the mob was with City Hall. "Talk about a lesson in the way the world works - whoa!"

He directed the police department to shut down mob-controlled slot machines in private clubs. "It was wildly out of control," he said.

After the federal government made some mob busts, Spence sought to rebuild the police department's and the government's relationship with the community.

He took down the fence surrounding City Hall, brought in a branch of a community college, and held a series of town meetings.

Then, well short of the five-year deadline, Chelsea was back on its own. Voters approved a new form of government. A city at the turn of a new century needed a professional manager, a charter commission said, and the new government kept the elected city council from exerting pressure on daily operations.

There's a thick wall between politics and governance now, Ash said: "We treat ourselves as recovering alcoholics. We not only can't drink, but can't get caught in the bar."

An 11-minute train ride to Boston, Chelsea depends on the region for its reputation and growth. "When people come to Chelsea, we don't want them to think they're in the jungle," Ash said.

Five new parks have been added - including one in an old prostitution area that now has a space-age jungle gym and weatherproof xylophone.

Before 1996, children were still schooled in buildings from the early 1900s. Now, every school is renovated or new, thanks to state funds, and after Boston University's management from 1988 to 2008, parents actually want to send their children to the local schools.

School reform had to be employed in conjunction with economic development and city reform; otherwise, it's not "full reform," said Chelsea's Deputy Schools Superintendent Mary Bourque.

In Camden, schools were taken over by the state - the governor was given three board appointments and veto power - but no money was provided.

In Chelsea, the sparkling new high school is a block from a Wyndham Hotel, which Ash calls "the source of our success," because it improved the city's image, led to other investments, and contributed to a tax base.

Ash had to go as far as Texas to find someone who would build a hotel in a city with Chelsea's poor reputation. Now, two more hotels are planned.

Chelsea takes advantage of its location - closer to Boston City Hall than some parts of Boston, Ash points out - to lure the travel and residential markets.

This strategy has fueled a potent economic engine. Two thousand residential units are in various stages of construction, and two-bedroom apartments now rent for as much as $2,000 a month.

"How much would you pay for that view?" Ash asks, looking at the Boston skyline from Chelsea's waterfront.

The answer? About $700,000, the recent price of a waterfront home.

Rijk Gupta, 31, moved from Boston and bought a house three years ago. "All my friends are like, 'Chelsea?!? You're going to get shot!' " said the dog walker.

But Gupta feels so safe he doesn't lock his car. He lives 4.5 miles from Boston and goes there several times a day: For Chelsea residents, the bridge toll is discounted: 30 cents, compared with $3 normally.

Downtown, there's a culinary renaissance going on, and one of the largest supermarkets on the East Coast recently opened and hired 900 city residents.

Ash has also figured out a way to gentrify without displacing the immigrants who have long distinguished this community.

Chelsea is home to thousands of undocumented people, Ash estimates, but he doesn't know the precise number because the city doesn't ask. The city council passed a resolution declaring the city a sanctuary for immigrants.

The state takeover hasn't fixed all problems. There's still some crime, including a high rate of domestic violence. Gambling is still in the city's DNA, officials say. Immigrant men play cards and drink outside, which makes longtime residents feel uncomfortable.

Still, 18 years after the takeover, says retired Chelsea Officer Charles Marino, 67, it is "100 percent better than it was."

Despite the differences between the cities - Camden is more than twice Chelsea's size, and its problems more complicated - Chelsea offers Camden crucial lessons.

Urban transformation takes time. What changed the game for Chelsea was the Wyndham, though it didn't break ground until nine years after Massachusetts took over. There are plans for a hotel on the Camden waterfront - as there have been for decades - and the Philadelphia convention center's expansion could provide spillover stays in Camden, which is a stop or two away on PATCO.

New leadership is on the way. Mayor-elect Dana Redd will start in January, and unless the state legislature scraps the takeover, a new permanent chief operating officer will be appointed by Gov.-elect Christopher J. Christie.

Carlin and Spence believe the two previous choices for the Camden job - a former mayor and a former judge - were misguided. Crumbling cities, the Chelsea men believe, need someone from outside the system.

"To have a former mayor would be my last choice," Carlin said.

Spence added: "You have to break up existing political control."

Some New Jersey politicians have suggested that Camden just needs more funds, but according to Ash, structural change is more important, more lasting than money.

Money wasn't the answer in Chelsea. Camden received $175 million in bonds and loans for projects in its takeover, but Chelsea got no special funds.

"Throwing money at a problem doesn't work," Ash said.

"You've got to get people to believe you're running government for them. . . . My fear is that a generation of otherwise civic-minded community members could grow up passing the buck to Boston [or] Trenton."

Indeed, Camden has become much more dependent on state aid during the takeover; Chelsea is less dependent than ever.

A takeover cannot go on forever, Ash warned.

"The way the state did it here - getting in and out - is the right way to go," Ash said. "Otherwise, running a community can turn into your own Vietnam."