East Cleveland is first city to be placed under receivership

EAST CLEVELAND, Ohio — East Cleveland is the first-ever town to be placed under a receivership, meaning that after years of fiscal emergency, a court appointed third party is going to be taking over their finances in order to find a viable long-term solution.

East Cleveland has long been in debt.

“Part of the problem is that we have a lot of debt that hasn’t been quantified yet,” new Mayor Sandra Morgan said.

Morgan said the receivership was in the works before her term, but it is something she supports.

“I believe it’s a lifeline for us,” she said. “It’s an opportunity to right the ship, frankly.”

At a recent town hall, residents heard from the mayor and the court-appointed receiver, George Shoup.

“I’m dismissed as a receiver once we determine that the areas of financial distress has been resolved and that a viable plan going forward is in place,” Shoup said.

Morgan said the current estimate of the city’s debt lies around $50 to $65 million, largely as part of large settlements ordered where the police department was found guilty of abuse.

“There’s just an erosion of the infrastructure because no one bothered to invest,” Morgan said.

The city has consistently lost population since the 1950s. It was once at roughly 40,000 residents but is now around 14,000. Morgan said, if they want long-term financial stability, they’ll have to reverse that trend. 

“We’re planning for building housing, really all sorts of housing,” she said.

She said new developments, like more housing as part of the Circle East project, shows there’s a push for growth.

“There’s a lot of reasons to come to East Cleveland,” she said.

When asked about what she’d say to an East Cleveland resident who is skeptical about the receivership, she said, “the alternative is real grim.”

“We don’t really have any alternative, and this is a way for us to move forward,” she said.