Pete Buttigieg Revived South Bend With Tech. Up Next: America

Pete Buttigieg Revived South Bend With Tech. Up Next: America


In downtown South Bend, Indiana, there’s an ugly concrete building where people can pay their water bill in person. When Pete Buttigieg first became mayor, in 2012, at age 29, this fact drove him insane. “How the hell is it that we’re still collecting cash payments in person for utilities in a modern city in the U.S.?” he asked me, faithfully reproducing his earlier exasperation.

SOUTH BEND WAS struggling economically, which meant the city needed to get more efficient and fast. Closing the payments office would be a step in that direction. Buttigieg once told a reporter that his “primary interest is using technology to improve people’s lives.” The payments office seemed to be doing neither.

But Buttigieg changed his mind about shutting the place down. “It turns out there are enough people who are completely unbanked,” he told me, “or so socially isolated that this is one of their few outings, that there’s an uncapturable virtue to having this there even though it doesn’t pencil out.”

Buttigieg’s election brought with it the promise of a South Bend that would pencil out—that city government would be run with technocratic efficiency by a local boy who had gone off to Harvard, Oxford, and McKinsey and returned with data-driven wisdom. He campaigned on a platform to revitalize South Bend’s economy, which had been slowly collapsing for 50 years, ever since Studebaker, once the country’s fourth-largest automaker, closed its factory in town in 1963.

In the following decades, offshoring and other structural changes turned the nation’s thriving manufacturing centers, from central Pennsylvania to western Illinois, into the Rust Belt. South Bend, 90 miles east of Chicago, oxidized more than most: Population and per-capita income declined, and in 2011, Newsweek named South Bend one of America’s 10 “dying cities.”

Buttigieg brought data, flow charts, and McKinsey-esque analysis to city government—as well as a bit of philosophical humanism. Since he became mayor seven years ago, unemployment in the city has fallen, from 13 percent in 2010 to 3.2 percent last fall—below the national rate—and South Bend has seen its first significant population increase in half a century. (Unemployment has since ticked back up, to 4.3 percent.)

The country itself was in recovery from the Great Recession during those years, but Buttigieg undertook specific changes that pushed South Bend up the hill. Part of the old Studebaker site is now home to a data-storage and analytics firm; Buttigieg invested city dollars in transforming its largest factory—the prosaically named edifice known as Building 84—into 800,000 square feet of offices where tech and biotech companies are now headquartered. Other former factories are being converted to apartments, and downtown has seen its first new construction in almost 30 years.

The day before I met Buttigieg, in December, he announced he would not be running for a third term as mayor. Everyone in town knew what that meant for the man President Obama had named as one of the hopes for the future of the Democratic Party: Five weeks later, he launched a presidential exploratory committee and has since been spending little time in South Bend.

Instead, he has been in Iowa speaking to small groups in living rooms, appearing in Austin where he was greeted by hipsters at South by Southwest, and making the interview rounds on television, podcasts and with national publications. (The first topic is invariably how to say his name—”BOOT-edge-edge” or “Buddha-judge.”) His televised appearance on a CNN town hall in mid-March sparked the current boom of Buttigieg enthusiasm.

He’s getting more social media engagement than the other Democratic candidates and recently announced that he’d raised $7 million in campaign donations. That’s a long way from Bernie Sanders current haul of $18 million, but quite a showing for the mayor of a mid-size Midwestern city.

The obvious knock on Buttigieg is his youth—he’s 37—and the presumptuousness that often comes with it. How does running a city of 100,000 for eight years qualify you to be president? Buttigieg’s response is to spin his weakness as asset.

He talks about being part of the school shooting generation (he was 17 when the Columbine murders happened) and young enough that what governments do—or, more to the point, don’t do—to prevent further climate change now will affect him personally. Unlike most of the other candidates, he served in the military, in Afghanistan, and he has spent time in corporate America. (He worked as a consultant from 2007 to 2010.)

But the central pillar of his story is his record as mayor of South Bend. “We propelled our city’s comeback by taking our eyes off the rearview mirror, being honest about change, and insisting on a better future,” he said in a video on Twitter announcing his intent to run for the Democratic nomination. It shows him walking in an empty hulk of Building 84 and cuts to him treading the same floor, modernized to a workspace that would be familiar to anyone in Silicon Valley.

I lived in South Bend when I was a kid, for parts of the 1970s and ’80s. Back then the place could be fairly characterized as a dump. Stores at Scottsdale Mall, where we went to the movies and did our Christmas shopping, were getting boarded up less than a decade after it opened in 1973. It closed in 2004.

Tearing down the empty Studebaker buildings, just south of the decaying downtown, was too expensive. So they just stood there, falling apart before our eyes, an on-the-nose metaphor for indifference toward those who had been forgotten in the transition from a manufacturing to a service economy. Bitterness about that indifference continues to surface in presidential politics and has arguably swung every competitive election since 1980.

In December I returned to South Bend for the first time in two decades to see what’s changed and how much the change can be attributed to a man who wants to be leader of the free world. (He’s expected to make his bid official this Sunday at a rally in South Bend.)

Buttigieg’s presumed candidacy—he leapt to third place in an Iowa poll late in March—is based on the belief that the city’s transformation can be a model for other cities and towns where jobs lost to globalization and the deteriorating power of laborgave way to the politics of resentment. So it seems reasonable to ask: If Pete Buttigieg can make it work there, can he make it work anywhere?

ONE THING I’D forgotten about South Bend was the bleak winter mornings. Many people go to work in the dark, and the sun hadn’t yet risen when I arrived at the city-county building for my 8 am interview with the mayor.

His office overlooks the poorer west side of town, where steam from an ethanol plant built in the 1980s was rising in the distance. The sickly-sweet aroma it produced was one thing I had not forgotten (though Buttigieg was quick to tell me that recently installed controls had greatly reduced the pernicious fumes).

Buttigieg’s parents were both English professors at the University of Notre Dame, which borders the city, and raised their only son in South Bend, where he attended private and Catholic schools. (Buttigieg’s father, an immigrant from Malta, died in January.) After Harvard, the younger Buttigieg spent a year working on John Kerry’s campaign for president, then took a Rhodes scholarship at Oxford University, earning a master’s degree in philosophy, politics, and economics.

When I was growing up, it never occurred to me to live in South Bend as an adult. The real opportunities lay elsewhere. Buttigieg had the same mindset. “I grew up on the narrative that success means getting out, so that’s what I did,” he said. After his time at Oxford, Buttigieg took that job with McKinsey in Chicago.

Traveling the country (he specialized in energy and grocery pricing), he found that “the downtowns of America’s biggest and wealthiest cities started to come back to life,” he said. “You start asking yourself, ‘Could that happen in a small city like South Bend?’”

Buttigieg’s first big initiative as mayor was to address a complaint he had heard while knocking on doors during his campaign. South Bend’s slow decay had left it pockmarked with vacant and abandoned houses—a blight that reduces tax revenue, increases inspection and policing costs, and leaves residents feeling discouraged and forgotten.

Buttigieg promised to refurbish or demolish 1,000 such homes in 1,000 days. The goal was “almost childlike in its simplicity,” Buttigieg told me, but the execution quickly became complex. Which houses should be torn down, and which stood a good chance of selling on the market, obviating the need for city intervention? Does selecting one home for demolition affect the prospects for other homes on the block? Who is the right person at the utility to lean on to shut off the gas before the bulldozers arrive?

He convened a task force from city departments, the city council, and community groups. Interns drove around town identifying abandoned properties, or traced deeds to absentee owners. “We built a really advanced picture and published a report with the typology of neighborhoods and matched different tactics to different methods,” Buttigieg said. He beat the deadline.

“It was a huge initiative and enormously hard,” said John Affleck-Graves, executive vice president of Notre Dame. “But that persistence—set the goal and make it happen—it just built pride.” Maybe South Bend wasn’t a lost cause after all. Maybe Buttigieg was a guy who could get shit done.

The experience influenced Buttigieg’s formation of SBStat, a data-driven model of troubleshooting city services informed by Baltimore’s CitiStat. Working at McKinsey, Buttigieg said, “I began to understand the concept of data structure in ways that really mattered later for how I approach campaigns and governing.”

When Buttigieg became mayor, the city didn’t have a systematic way to track existing problems or know whether they were getting solved. He would ask the staff about their performance measures and find out they didn’t have any, or if they did, the measures weren’t useful. “To the extent code enforcement tracked productivity,” he said, by way of example, “it was in terms of how many violation letters they sent out. Which is a measure of activity, but it doesn’t mean they’re getting fixed.”

Buttigieg envisioned SBStat as a grand dashboard that could show him at a glance all the issues popping up across departments. “Sim City—that’s what I wanted,” he said, smiling at his naivete. It instead developed into something more mundane but still useful: SBStat tracks individual departments, collecting data on goals and whether they are being met.

At a Parks Department meeting in December, a flatscreen on one wall of the conference room showed a dashboard with the percentage of targets met for a number of park maintenance goals, like the amount of canopy coverage and graffiti removed within 48 hours.

Clearing out the old was a critical first step. Bringing in the new followed. While the former Studebaker site had been seen as an albatross, it contained potential riches. Building 84 sits beside the convergence of two major railroad lines connecting Chicago with Detroit and New York.

Trucks had replaced the freight trains, but the tracks became critical in the digital age. During the dot-com boom of the late 1990s, telecoms started buying up railroad rights-of-way across the country, and dirt beneath the tracks in South Bend soon ensconced the densest concentration of fiber-optic cables in the country. (Like the boxcars, the electrons need to go around Lake Michigan).

A local entrepreneur and Notre Dame grad named Kevin Smith saw that value and bought the old train station, on the other side of the tracks from Building 84. He turned it into a data center, leasing space to telecom and cloud services companies that benefit from the millisecond efficiency gains of being close to a fat internet pipe.

Later, in 2013, Smith bought Building 84. Some mayors offer companies generous tax breaks and abatements to bring jobs to their cities—deals that have not always worked out as planned and opened them to charges of doling out corporate welfare. (Amazon’s plan for a second headquarters in New York was sunk by such concerns.)

Buttigieg has resisted that strategy, trying to leverage city money with calculated discretion. He says he generally sticks to a cap of $1 of city investment for every $5 from the private sector. Building 84 penciled out, and the city paid to refurbish the facade and for environmental remediation.

The idea was to attract more companies wanting to take advantage of abundant “dark fiber”—cable laid for extra capacity that can be leased to whomever needs it. Now Smith is retrofitting the building so that excess heat from the data center computers gets siphoned off to warm the offices.

BUTTIGIEG JOINED FORCES with others in refashioning South Bend. Notre Dame was a South Bend institution even before Studeba
ker came along, but it had kept itself separate from the city. That started to change in the 1990s when the school was finding it difficult to attract talented faculty. “Most people have a partner or spouse, and they need employment,” Affleck-Graves said. “And for many of the faculty, they’re professional people so you have to have professional opportunities for them.”

To create those opportunities, the university broke ground in 2008 on Innovation Park, a facility focused on turning Notre Dame’s technology research into new businesses that, it was hoped, would locate in the city. Buttigieg saw the potential for companies launched at Innovation Park to graduate to a development called Ignition Park, which was going up on part of the Studebaker site.

Before long, a data-storage firm called Data Realty, started at Innovation Park, was moving into Ignition Park. Data Realty has grown 600 percent in five years; 69 percent of its 120 employees have advanced degrees—nearly half from schools in the region, slowing the brain drain. Notre Dame opened a turbo-machinery lab at Ignition Park in 2016. “When you have good-paying, high-tech jobs—jobs that can beget jobs—it’s exactly the kind of economic growth that you look for,” Buttigieg said when it opened.

Indeed, the entrepreneurship was infectious. Maria Gibbs, 29, cofounded a startup generator called Invanti in South Bend after getting a PhD in civil engineering at Notre Dame. It’s housed in a former dry-cleaning facility owned by the dad of a neighborhood pal of mine. Buttigieg, she told me, has fostered “a culture here that lets us go to business owners and ask if they’ll try things that are on Post-it notes.”

UC Berkeley economist Enrico Moretti has shown how cities with industries employing highly educated workers experience a virtuous cycle, as they attract more businesses in similar, prosperous sectors. The workers tend to have educated spouses, and a cascade ensues as together they demand amenities that attract more such workers.

Buttigieg told me he wasn’t familiar with Moretti’s work, but he follows the script. Jobs in computer and mathematical occupations in South Bend have grown nearly 40 percent since 2012, according to the Bureau of Labor Statistics.

In 2014, Buttigieg, a naval reservist, was deployed to Afghanistan for seven months—while still mayor of South Bend. Indiana law allowed him to appoint a deputy to act in his stead, and Buttigieg named the city controller, an apolitical soul who wouldn’t grow into a rival.

But Buttigieg didn’t disappear from city deliberations. In Kabul, he found a roof where he was relatively safe from rocket attacks and able to pick up a decent data connection. He piped into staff meetings over Skype in the middle of the night so he could still be involved with key decisions. (The upside of this arrangement: He was the only one in the meeting who could enjoy a cigar.)

The following year, he announced he was running for reelection, and, in an essay in the South Bend Tribune, revealed that he was gay. “For a conservative resident from a different generation, whose unease with social change is partly rooted in the impression that he doesn’t know anyone gay, perhaps a familiar face can be a reminder that we’re all in this together as a community,” he wrote.

He was reelected with 80 percent of the vote. (In 2018, he married Chasten Glezman, who teaches middle school near South Bend and has a fast-growing Twitter following as @Chas10Buttigieg.)

In 2015, South Bend joined with two neighboring counties to apply for a state grant offered by Governor Mike Pence. “My differences with Mike Pence are well-known,” Buttigieg said. This, however, was a good idea. They got money to help renovate Building 84 and to speed up a light-rail line to Chicago. “Mayor Pete bought into that concept of let’s work together,” said John DeSalle, president of Hoosier Racing Tire and a member of three-county regional authority that was formed. “We’re better together than we are separate.”

AFTER WE TALKED in the mayor’s office, Buttigieg and I drove around town. We stopped at Seitz Park, on an island in the Saint Joseph River, which runs through downtown. As a kid, I would float past here in an inner tube on a canal originally dug to provide power to a sawmill in the 19th century. It was filled in for years, then re-excavated; now it’s used for competitive kayaking.

Within view was the old LaSalle Hotel, during my youth another vacant reminder that South Bend’s best days were behind it. During Buttigieg’s second term, it was converted into apartments. Closer in, on a lot that’s been empty for decades, was a construction site that will soon hold a seven-story residential complex with amenities like a fitness center and conference rooms.

Development has been good for the city’s tax revenues, but median household income has hovered the last few years at around 61 percent of the national figure. A quarter of South Bend’s citizens live in poverty. Those poorer residents don’t see the immediate benefits of new apartment buildings with fitness centers.

About 25 percent of South Bend’s population is African American, and 40 percent live under the poverty line. “The reality is, there’s a colossal [economic] gap that tracks along racial lines,” Buttigieg said, worrying that without favorable educational and employment opportunity, lower-income people of color will be trapped in de facto segregated schools and housing across generations.

That is a huge problem Buttigieg has not solved with data or technological innovation. Construction has created well-paying jobs that don’t require a college degree. More sustainably, Buttigieg is supporting efforts to transition workers to a digital economy. South Bend Code School, a nonprofit in Building 84 that’s partly funded by the city, teaches programming alongside business planning and teamwork—“those assets that we know are going to be really important,” Buttigieg said.

He doesn’t seem to have an overarching view on the state of the economic system and seems more interested in whether something will work than where in the canon of political philosophy it originated. “If someone my age or younger is weighing a policy idea, and somebody comes along and says you can’t do that, it’s socialist, I think our answer is going to be, OK, is it a good idea or is it not?” he told The Hill in February.

The mayor has pointedly declined to attempt—or promise—to bring back the giant manufacturers that once drove South Bend’s economy. Instead he has tried to make the city a place where people want to live, with investments in streetscapes and parks, in order to attract companies of all sizes.

It’s not just Notre Dame’s professors and their spouses who want amenities, but the coders and marketers at Data Realty and the technical people and manufacturing workers who still make up the largest segment of South Bend’s economy. “Growth doesn’t come through nostalgia, but it also doesn’t come out of the blue,” Buttigieg said. “So having a community with livability and recreation is really important as to whether these companies can make it.”

Buttigieg greeted an electric company worker in a bucket truck before getting back behind the wheel and taking us over to LangLab, a collection of small businesses in a former warehouse that earned a 1-to-5 investment from the city and later hosted Buttigieg’s and Glezman’s wedding reception.

He seemed a little nervous when an older woman stopped us to remind Buttigieg of the time they’d met before and to tell him how much the city would miss him. (“One thing I learned on the Kerry campaign,” he confided after she passed. “Always say ‘nice to see you,’ never ‘nice to meet you.’”)

The parks-and-rec-level successes of a small city mayor don’t seem to naturally translate into big-picture, national—and international—policy solutions. But if there’s an overarching theme in Buttgieg’s philosophy, it seems to be this: Change can’t be stopped, but it can be managed.

In South Bend he’s had the luxury of being able to build consensus, work out compromises with his political opponents, and wield considerable mayoral powers. In Washington, he knows, none of that applies, and as president he’d face much more consequential decisions than how people pay their water bills. There, gridlock is now built into the system. As a result, he says he wants to change some of the fundamental processes of national politics and policy: Ditch the electoral college, do away with the Senate filibuster, and redesign the system for appointing Supreme Court justices.

He talks about investing in artificial intelligence and other technologies so that the US can compete with China and other countries, easing the transition to a new economy by insisting on portable health benefits, and taking a look at Universal Basic Income.

But he also points to the emotional toll of job loss. “You can’t just match up one job to another based on the demand in the labor market,” he said. “You gotta know whether it aligns with someone’s sense of who they are. So the idea that someone who was a machinist will succeed as a nurse’s aide, it’s not necessarily relevant to how he sees himself.” And if they can’t find a new identity in work, family, faith, or community, more nefarious substitutes—drug addiction, white nationalism—will slip in.

This is a kind of psychological insight we haven’t heard much in a while, but it’s not immediately satisfying to someone who is out of work. Buttigieg is convinced some skills do translate: “The things that make a great carpenter are not that different from the things that make a great coder: The ability to handle ambiguity, to not get frustrated when it’s off, dealing with other people.” They’re also the things that—though they can be learned—are most difficult to teach.

Down the block from the Water Works building is a restaurant called the LaSalle Grill, where my mother and stepfather would take me for a steak on special occasions. When it opened in the early 1980s, manager Andrew Galloway told me, “people saw microgreens on the menu and were like, ‘What?’” I stopped in during my visit to South Bend in December, and the first words I overheard were “technology and innovation.” (Some things resist change, however; the men having the conversation were wearing blue blazers and tattersall shirts.)

Not every Rust Belt city can reinvent itself around technology and innovation. Few are lucky enough to have world-class research universities next door willing and able to spin off new businesses, and fewer still have exceptionally high concentrations of fiber-optic cable. Yet everyone I spoke to in South Bend insisted that what has been achieved in the city is replicable.

Affleck-Graves chaired the finance and business economics department at Notre Dame and spent years studying what other cities had done to revitalize themselves. “You’re given a certain hand, and you’ve got to play that hand,” he said. “It takes different types of leadership—there are people who can get things done and people who can bring others onboard. Pete can do both.”

Buttigieg made South Bend into a place he wouldn’t want to leave, and now, in all likelihood, he’s leaving. If his long-shot candidacy fails, some have speculated, a victorious Democrat could start grooming Buttigieg for 2028 by naming him secretary of Housing and Urban Development or Labor.

“He has too much talent to be here forever,” Affleck-Graves said. “We have to let him go.” That pencils out.


Paul Tullis writes about science, technology, and business for Bloomberg Businessweek, Scientific American, and others.

Co-published with WIRED.

Save An Endangered Species: Journalists

Paul Tullis writes about science, technology, and business for Bloomberg Businessweek, Scientific American, and others.

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