I'm in Philadelphia for the International Economic Development Council (IEDC) annual conference. Day 1 for me was an hour journey northward to the Lehigh Valley to tour the Bethlehem Steel brownfield redevelopment project. The group received some background on the ride up. Pennsylvania communities generate a lot of revenue from property tax. The closure of Bethlehem Steel wasn't so much a jobs crisis as it was a huge chunk of city real estate now sitting vacant. I was starting to wonder if I made a mistake signing up for this tour. People develop, not places. Squeezing money from a piece of turf is not my idea of economic development.
Strike two was the casino anchor for the steel campus revitalization. As I would learn later in the day, the investment from Sands Las Vegas would make or break the floundering efforts to find a second life for the site. I hadn't met a casino that didn't look like a boondoggle and a grave mistake. Apparently, the Bethlehem mayor shared my skepticism:
The move was controversial, to say the least. The city council approved Sands' land purchase by a razor-thin 4-3 vote. And even today, the casino has critics who argue that their involvement comes at a steep price. Labor groups are not allowed to meet on the site, and protests are not technically allowed to gather.
The casino has certainly been a boon for the rest of the parcel, leading to $900 million in infrastructure investments and 2,400 jobs being created. In its most recent financial quarter, it brought in $113 million in revenue; another $15 million came from Sands' other facilities on site. Pennsylvania requires casinos to pay a 55 percent tax on all revenue. Four percent of that goes directly to the gambling center's host community. Being in a zoned Tax Increment Financing (TIF) district, that revenue then subsidizes other infrastructure projects on the Bethlehem Steel site.
"When we were looking for other cities that did a great job integrating a casino into their city we couldn't really find any," says Bethlehem Mayor John Callahan. "I decided that Bethlehem was going to be the city that did it right."
Well, what would you expect him to say? Sands was offering hundreds of millions of dollars to set up shop on the brownfield. Bethlehem isn't an exception to the rule.
Bethlehem is an exception to the rule. As we got close to the city, our guide (an ex-mayor of Bethlehem) told the history. Pacifist Moravians settled there in the mid 18th century. (Thanks to the federal government shutdown, I linked to a cached version of the National Park Service website telling the story.) That got my wheels turning, the juices flowing. The geographic stereotype of the Rust Belt glosses over many a gem. Downtown Bethlehem is one of them, downright quaint. It has nothing to do with industrial Bethlehem, which sits on the other side of the Lehigh River.
I prefer working-class river cities. South Bethlehem delivers, and then some. As we came out of the Moravian hamlet and crossed the river, the jaw-dropping awesome blast furnaces dominated the view. The sharp contrast between downtown and the steelworks town disorients.
I've been to at least two dozen large brownfield redevelopments. I've never seen anything close to the amount of preservation to be found at Bethlehem Steel. Those furnaces are iconic, the identity of the people who hail from here. Somehow, Sands understood the value in the connection. The company designed a unique attraction that served both business and community interests, Rust Belt Chic economic development.
Like in Chattanooga, all these assets and advantages fly under the radar. Jeff Parks, president and CEO of ArtsQuest, described this challenge in answer to my question about putting this brownfield redevelopment project on the global map. How do you attract world-class talent living the dream in California to a gritty city obliterated by the shadow of New York? If you are up to that challenge, then you need a Jeff Parks in your town:
ArtsQuest President Jeff Parks admits he's not very sentimental and he's not easily impressed. Yet in 2002, as he stood three stories up on a brightly lit former steel mill in Duisburg, Germany, his jaw hung open in amazement as he realized just how wrong he had been.
"Oh, we've got to have one of these in Bethlehem," he said, awestruck, standing on a performance stage embedded in the 110-year-old former Thyssen steel mill.
In that instant, for Parks, the former Bethlehem Steel blast furnaces went from being rusted relics he thought should be demolished to becoming the centerpiece of the newest attraction he was planning for the barren Steel land.
The epiphany for Parks in Duisburg describes the rationale for the IEDC conference. We're here to learn. We're here to teach. Parks, I can't remember whom he was quoting or paraphrasing, challenged his audience today: "Grab the idea. See how you can improve it."