McDonald’s Home Town Braces as San Bernardino Goes Bust

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San Bernardino City Hall reflected on one of the vacant buildings across the street on July 12, 2012 in San Bernardino, California. Close

San Bernardino City Hall reflected on one of the vacant buildings across the street on... Read More

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Photographer: David McNew/Getty Images

San Bernardino City Hall reflected on one of the vacant buildings across the street on July 12, 2012 in San Bernardino, California.

On the Route 66 site where the McDonald brothers started a hamburger chain that spread their name worldwide, Tashia McSwain is waiting for a bus and ruing the day she moved to San Bernardino, California.

The city of 209,000, an hour’s drive east of Los Angeles when traffic isn’t at a standstill, had almost twice the U.S. unemployment rate in April, according to the Labor Department. The murder rate was three times the national average in 2010, the FBI said. And its air pollution rated a failing grade from the American Lung Association, among the worst in the country last year.

San Bernardino notched its latest distinction this week when it became the second-largest U.S. city to vote for bankruptcy protection, sunk by a stagnant economy, rising employee costs and accounting irregularities, according to city documents.

“I’ve never liked San Bernardino,” McSwain, an unemployed 44-year-old home-health aide who’s lived here since 1999, said in front of the original McDonald’s, now a museum not connected with the world’s largest restaurant chain. “It’s hard to get a job in San Bernardino -- any job, period. It’s all slumlords out here. I think the city is doomed.”

Founded in 1810 at the foot of the San Bernardino Mountains, the community faced hardship in its early years as a gold rush went bust, according to an account on the city website. Railroads helped revive the community, which developed into a suburban center after World War II.

Photographer: Jonathan Alcorn/Bloomberg

A sign that reads " Keep San Bernardino Beautiful" stands in front of city hall in San Bernardino. Close

A sign that reads " Keep San Bernardino Beautiful" stands in front of city hall in San Bernardino.

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Photographer: Jonathan Alcorn/Bloomberg

A sign that reads " Keep San Bernardino Beautiful" stands in front of city hall in San Bernardino.

Steel, Railroad

In those days, Judi Penman recalled, San Bernardino was a safe if humble community with plenty of jobs associated with Norton Air Force Base, a Kaiser Steel mill, the Santa Fe railroad and the development of homes and businesses.

“It flourished as a blue-collar town,” said Penman, 69, now the president of the San Bernardino Area Chamber of Commerce and the wife of the city attorney, James Penman.

The Air Force base closed in 1994. The steel mill’s workforce shrank in the 1980s before disappearing altogether, and Berkshire Hathaway Inc. (BRK/A)’s Burlington Northern Santa Fe transferred most of its local jobs to Topeka, Kansas, in 1992.

The deterioration of the local employment base left scars on the still-growing community, said Joel Escobar, 69, who grew up in the city. As early as 1970, Escobar said, the sense of stability epitomized by nighttime visits to drive-through McDonald’s restaurants was beginning to fall prey to concerns about crime.

Today, Escobar said, panhandling and homelessness are a ubiquitous impediment to a comeback.

‘Cleaning Up’

“The No. 1 thing is cleaning up the city,” the retired teacher said. “That’s the only way we can attract business.”

As crime and decay stalked San Bernardino, its leaders concocted revitalization plans that failed to boost the economy, according to Judi Penman and Sharon Blechinger, 53, whose family has owned the Mexico Cafe in town since 1951.

The plans included an abandoned effort to develop a chain of lakes and streams downtown in the early 2000s, a city subsidy to reopen a shuttered movie theater in the central business district, and a proposed rapid-transit bus line.

“Different councils over the years have done these kinds of idiotic things,” Penman said.

Still, San Bernardino’s citizens have withstood surges in crime, the collapse of the housing market and cuts to municipal services. Blechinger hosted fundraisers to collect private money to keep four police dogs in San Bernardino. Meanwhile, the city with 27 percent of residents below the poverty line supports a symphony orchestra.

“Because we are a poor community and always have been a poor community, people give until it hurts for the causes they believe in,” Penman said.

Outside the McDonald’s museum, seeking shade from 109- degree heat under an awning, retired water-department worker Charles Nesby, 65, said he hasn’t given up on the city where he’s lived for most of 15 years.

“It’s a dark day, but perhaps with some unity and some concern we might be able to save this city,” he said. “It’s got to be saved.”

To contact the reporter on this story: James Nash in San Bernardino, California at jnash24@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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