How the Port Authority wasted precious time and money on ill-conceived plans

For more than two years, the members of the Cleveland-Cuyahoga County Port Authority were true believers in Adam Wasserman, the CEO and president they'd lured here. He thrilled them with promises to raise a billion dollars to build a new 200-acre port facility, and in the process revitalize downtown with a new lakefront plan and the creation of 50,000 jobs. He mesmerized many in this desperate town with visions of grandeur, urging others to think beyond the horizon where only those who have courage dare to dream.

But Wasserman was something of a Music Man. And in a few short days earlier this month, he plummeted from grace, leaving the often-secretive board members fumbling before the media, unwilling to explain what had happened. Wasserman quit just as the uncomprehending board was about to learn that he was dealing as much fiction as fact, and that he had succeeded only in running an effective port authority into the ground, wasting millions in public money and demoralizing the staff.

The repercussions will be felt for years. Mayor Frank Jackson had been counting on Wasserman to provide his administration the legacy of a dazzling waterfront project. But city hall failed to oversee the dream, and time and money were wasted by a port board blinded by its own hubris.

And in a way, Wasserman too was a victim — of a carefully fashioned plan to take advantage of an unsuspecting public in yet another episode of manipulation by public officials.

The Cleveland lakefront has long been the subject of considerable study and diametrically opposed views. The industrial nature of much of the shoreline has blighted the aesthetics of the lake. The potential development of the waterfront into a symbol of the city's renaissance has held universal appeal for decades.

The ambitious 2004 Waterfront District Plan was the result of some 200 public meetings involving thousands of people over nearly three years. In an unusual example of consensus for Cleveland, some 60 public and private organizations endorsed the plan. The Port Authority was one of them.

But at the Port Authority, things are not always as they seem. This, after all, is the entity that spent hundreds of thousands of dollars in 2002 on lobbying the Ohio legislature to repeal a law that required public hearings on the future development, construction and improvement of the port and its facilities. It was the first step on what would become a journey of deception. Essentially, the law allowed the Port Authority to ignore the public. (Later, the friends of Ed Hauser, a legendary activist who had challenged the port for years, pursued a change in the law, once more making the Port Authority reveal its plans to the public. Called the Hauser Amendment, it was passed in the midst of the relocation proceedings. Its passage forced the port to be more transparent, just when transparency was most needed.)

With the election of Mayor Frank Jackson in 2005, a series of events began that would ultimately leave the Port Authority in turmoil.

In June 2006, developer John Carney and his partner, Bob Stark, met with Jackson to discuss their interest in developing the lakefront. (The mayor appoints six of the nine Port Authority board members; the county commissioners appoint the other three.) The next month the Sun newspapers ran a story mentioning the role that Stark wanted to play in the lakefront development. There was no mention that Carney's role in any lakefront development would be restricted by his service as a Port Authority board member since 1998. In fact, he was in glaring conflict with such a venture.

Two weeks later, the Port Authority passed a resolution to hire URS, an engineering firm, for $900,000 to create a plan to relocate the port. This was essentially a unilateral scrapping of the hailed 2004 lakefront plan, which had called for the port to be moved to an island created by dredge-fill just north of its present site.

It was into this chamber of hubris and duplicity that Adam Wasserman was wooed by Carney and then-port board chairman Michael Wager, a lawyer from Squire Sanders and Dempsey. An American working in England, at the time, directing a redevelopment project, Wasserman was offered a deal that surpassed that of all but handful of his counterparts in the U.S. — a five-year contract paying $273,000 annually plus $50,000 in expenses. This made him the highest-paid public official in the region, heading a port that was barely making money.

Carney and Wager preached Wasserman's brilliance, his vision and the difference he could make in resurrecting the region. Mayor Jackson was laudatory in his endorsement of Wasserman. Commissioner Jimmy Dimora said he better do something for that much dough.

In December 2007, at a public meeting, Carney and Wasserman made the stunning announcement of the port relocation plan — to a site near East 55th Street. In staged succession, members of the maritime community and civic leaders rose at the meeting in endorsement.

Carney's first utterance was a precursor of what was to become for Wasserman an unshakeable public-relations burden: "There will be no comments from the public." This arrogance sparked contempt from the assembled citizens, many of whom were environmental activists who had been involved in the 2004 plan, which evidently had just been hijacked.

But no one could have been less suited to handle this ill-conceived plan than Wasserman. His arrogance matched Carney's, but Wasserman was burdened with a personality that recoiled at criticism. He would also prove to be far less competent than he'd been made to sound when hired. Absent-minded and oblivious to detail, Wasserman's management style bordered on the reactionary. He belittled veteran employees and was contemptuous of board members who questioned him. To outsiders, he even seemed contemptuous of Cleveland itself.

Compounding the problem, Carney dominated the board in such a way that members often had no idea what was transpiring. Anytime Wasserman was questioned in what might be perceived as a critical way, Carney leapt to his defense. On one occasion, Carney intimated that criticism of the project was essentially holding Cleveland back from greatness.

It's not clear if he understood this at the time he was hired, but Wasserman's primary duty seemed to be justifying the public investment in the port relocation — a bill that could conceivably reach $1 billion. Wasserman claimed to find justification for it in the establishment of a container-shipping business

Never mind that no one on the Great Lakes was prospering from water-borne container business. Wasserman was fixated on containers. He had several studies done, none of which was particularly optimistic. They were couched in language that offered hope but always ended with an escape clause that warned of the challenge ahead.

When Steve Pfeiffer, the longtime maritime director of the port, could not execute a successful container plan, Wasserman fired him. Wasserman then hired Pat Coyle, a 30-year-old logistics expert with no experience in maritime, and instructed him to complete a business plan that would accommodate the container issue. Coyle completed the plan but then resigned after three months on the job, telling colleagues that he did not want to stake his future reputation on having to defend Wasserman's belief that if the port was moved, the container business would follow.

It seemed doubtful the board members had even read the container studies, let alone understood them. The same might be true of the Greater Cleveland Partnership, which swallowed Wasserman's claims hook, line and sinker — despite the fact that for two years, the port operated without a business plan.

Meanwhile, Carney became engrossed with the part of the waterfront plan that would increase his interests.

When the port hired the New York firm of Ehrenkrantz, Eckstut & Kuhn to develop the master plan for lakefront development, Carney became particularly attentive to its details, even arguing with the architects. He made sure the plans for the development extended West 6th Street to the water's edge; the original plans had omitted this due to the cost. Carney owns four properties near West 6th Street. If the development were built, his property values would increase 20 to 45 percent, according to an appraisal commissioned by a downtown developer.

When he came aboard, Wasserman may not have known that Carney comes from a controversial family, with a reputation for questionable business dealings at the expense of the public. He was the subject of Plain Dealer articles several years ago outlining his conflict as a port board member and downtown property owner in the Wolstein/Flats development case.

And remember, Carney had already indicated to Mayor Jackson that he was interested in becoming the developer of the port property. He went on record saying he will leave the board in 2011, just as the development would begin.

As time passed, Carney's interest in the port's maritime future appeared to flag. Wasserman grew annoyed that the development plan was getting more attention than the relocation. Privately, he complained that it was too hard to get things done in Cleveland. Last year, after he threatened to leave, he was placated with a $10,000 raise, a $40,000 bonus and another year on his contract. All this in the same year that the port lost $2.9 million.

One of the endearing things about Wasserman was his ability to bullshit.

Those who regularly attended the port meetings had to conceal their mirth over the ever-changing facts. Reporters tried to remain respectful. I kept mumbling sarcastically that this was democracy in action. John Baker of the Longshoremen's union seethed. Outspoken activist Dominic LoGalbo whispered "bullshit" in my ear more than once. Meanwhile, the Dike 14 Nature Preserve Committee (Dike 14 is near the site of the proposed port relocation) began to mount opposition, dissecting Wasserman's specious arguments like frogs in biology class.

Penny Jeffery from the League of Woman Voters of the Cleveland Area had a better grasp on the situation. Her organization had opposed the relocation as impractical shortly after it was announced. In May, the Ohio League of Women Voters passed a resolution opposing the relocation.

It wasn't that board members never asked for things like a business plan; Wasserman just ignored them or assuaged them for the moment with orotund oratory. At board meetings, he would talk at length about the congested East Coast seaports and how short sea shipping was going to revive the Great Lakes with container vessels. But over time, it became obvious to observers that Wasserman could not perform the task that Carney had designed for him.

He could not even manage a public-relations apparatus. PR agencies and personnel came and went. But he simultaneously hired seven new staffers, increasing the struggling port's payroll by $665,880. Frustrated veteran staff members began to suspect that Wasserman was shielding himself by having others address issues that were becoming more contentious with every meeting.

At one point, at the urging of a board member to create a test for the potential of container business, the port asked for a federal grant to subsidize a ship to see if it could attract such business. The cost for that, Coyle told the board, was between $10,000 and $20,000 a day.

The board did not shrug at the cost because it could not fathom it. Wasserman had thrown so many figures of such magnitude around that nothing seemed relevant or impossible anymore. Their eyes were glazed. Reality always gave way to Wasserman's intoxicating soliloquies.

Ironically, a week or so before he departed, Wasserman had lunch with one of the port's clients. Wasserman complained that he was sick and tired of hearing about containers. When the man noted that they had been presented as the key to the whole relocation plan, Wasserman denied it.

Only two board members — attorneys Anthony Moore and Richard Knoth — routinely raised questions about the direction of the project. But for the most part, the muted board looked on with hunched shoulders, as if trying to connect the dots between Wasserman's peripatetic meanderings and the future of the city. Chairman Steve Williams routinely and gratuitously thanked the port staff for its work.

The other board members — Robert Peto, Brian Hall, Robert Smith, Marc Krantz and Rose Rodriguez-Bardwell — watched in virtual silence as Wasserman wasted more than two years and $2 million on studies.

Harried and hostile, Wasserman became paranoid when he spoke of "inaccurate and unbalanced" reporting on the port in The Plain Dealer. In late October, Wasserman attracted the attention of the editorial board through his actions in board meetings, which were seen as misleading and evasive. (Most felt the newspaper was far too easy on the port.) Thinking he was launching a preemptive strike on the paper, he sent an e-mail to prominent Clevelanders (but no board members) stating that the paper was about to publish an unfair barrage of stories.

When the stories appeared, they were balanced and in no way an attack on the port. Wasserman had made a fool of himself.

Then another strange thing happened in October. The port refused a $1 million grant to improve trails and clean up the Dike 14 nature preserve. When the port received bad press over the rejected grant, there was internal finger-pointing over who had dropped the ball. The board asked to meet with Wasserman in an effort to clear the air. Unbelievably, he refused.

Carney and some other board members backed his decision to refuse the meeting, but others pressed the issue. And then, according to sources, Wasserman quit.

Carney, seeing his manipulations dissipating before his eyes, argued that Wasserman be retained. Wasserman hired a lawyer, a signal he was going to war, though the only issue left was the payoff. Some board members argued $150,000 was enough. Wasserman got twice that. The board even paid $5,000 to his lawyer.

The chain reaction that led to the meltdown could not be explained to the public. After meeting for hours in three executive sessions with an increasingly skeptical media banned from the room, chairman Steve Williams bore the brunt when it was over. He had no comment on Wasserman but added that port policy would not change — a mistake that earned him further ridicule on the PD's editorial page.

John Carney, the man who wrote the story but not the ending, slipped from the meeting without a word.

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