US' New Biggest Bankrupt City: Stockton

The city of Stockton, Calif., will today file for bankruptcy, becoming the largest city in the US ever to do so, the San Francisco Chronicle reports. Stockton, a river port and agricultural city of nearly 300,000 about 90 miles east of San Francisco, became a victim of California's housing crash. During the mid-2000s economic boom, the city—long mired in poverty—attempted to reinvent itself, building a new marina and sports complex, fancy hotel, new housing tracts, and promenade on credit. Today, those posh areas are blocks away from dangerous, violent neighborhoods, the Los Angeles Times reports, and the rate of foreclosure is the second-highest in the nation. "All that's left is sadness," said the town's retired fire chief after last night's 6-1 council vote in favor of bankruptcy.

The city cut the police department by 25%—and last year saw a record-setting 58 homicides; there have been 31 so far this year, the BBC reports. The fire department was cut by 30%, and other city employees by 40%. Employee pay and benefits, once perhaps overly generous, were also cut. Stockton also has the state's second-highest rate of violent crime and an unemployment rate higher than 15%. Many city buildings have been repossessed, including City Hall. "Wells Fargo Bank took over a few parking garages that the city owned," says one local. "Now they own the building City Hall is in. You might well call it Wells Fargo town." (More Stockton, California stories.)