Small Economies Ride High
Low labor, and real estate costs draw investors and spur growth
NEW BEDFORD, MASS. — Six years ago, Moby Dick had more life than this old whaling port.
The jobless rate was 14 percent, the area's textile mills were shutting their doors, and the fishing industry was dry docked. Local officials thought their only economic salvation was a casino.
Today, the economic tide is high. Stranded areas like New Bedford are starting to float again. The unemployment rate has shrunk to 9.2 percent for the city and 7.6 percent for the greater New Bedford metro area. The manufacturers' exodus is slowing. The fishing fleet is back hauling in cod, squid, and scallops. And the industry is using its whaling heritage instead of a casino to attract tourists to a brand new national park in its historic district.
"New Bedford is roaring back," says Peter Dimond, communications director for Wareham-based Com/Electric, which issues an economic snapshot of the region.
New Bedford is not alone. Around the country, regions long considered economic wastelands are reviving - some with a vengeance.
Two years ago, the difference in economic growth between the top areas of the country and the laggards was five to six percentage points. Today, that spread is down to two to three percentage points.
All but three of the top 100 metropolitan statistical areas are now reporting positive job growth. "The expansion is not only broad based by sector, but also broad based by region," says David Hensley, an economist with Salomon Brothers in New York.
Even the District of Columbia, which has been struggling for years, has now recorded three consecutive quarters of growth. The only major exception is Hawaii, which is still losing jobs due to the downturn in the Japanese economy.
One reason for the comeback of places like New Bedford is the rest of the nation's success. Corporations, looking for lower-cost real estate and labor, find such cities perfect candidates. "As companies need to expand, they are utilizing the marginal plants where [there are] laid-off workers," says Sara Johnson, an economist at DRI/McGraw Hill in Lexington, Mass.
This is the case in New Bedford, where AT&T is planning to open a customer-service facility employing 1,000 workers. "They had bought the property earlier, but had changed their plans," says Jim Mathes, president of the local Chamber of Commerce.
Com/Electric's most recent economic survey offers an unusually rosy picture. New home construction is up 29.6 percent in the first quarter. Commercial construction was up 47.8 percent. Electricity use jumped 6 percent.
Even the beleaguered fishing industry appears to be in better shape. In the first quarter, fish prices were high. According to the city auction records, industry shipments rose by 52 percent.
"The good boats have done well," says Harold Nickerson, president of the Offshore Mariners Association. "They have better crew and can fish in rougher weather." But he says the industry is still in decline. Some 250 boats now call New Bedford home, compared with 400 boats a decade ago. Moreover, in recent weeks the price of cod has fallen as more boats venture offshore.
And the economy here has a long way to go to match the national statistics. Average house prices in the area rose modestly last year, and new housing sales rose only slightly. "It's too slow for me," says Skip Carter, who runs an appraisal service. There is also plenty of empty space downtown, where office vacancy is 30 to 40 percent.
But some investors view the empty buildings as an opportunity. Jim Williamson, a financial consultant with the New Bedford branch of Merrill Lynch & Co., says he knows investors who have started to buy real estate in anticipation of a continued upturn.
They may well be right. The University of Massachusetts plans to expand its Dartmouth campus to downtown New Bedford. The new campus will take over an abandoned building that fills one square block.
And thanks to the Massachusetts congressional delegation, part of New Bedford's downtown area has been designated a national park. Edward Camara Jr., the city's tourism director, expects the new park will draw as many as 200,000 visitors this summer. "In the next few years attendance figures will grow to 500,000," he predicts.
One beneficiary of the new status is the city's whaling museum, which hopes to raise $10 million by 2003 for an expansion. "We expect our attendance to increase greatly," says Judith Downey, the librarian.
If a proposed aquarium is built over the next three years, even more visitors - as many as 1.8 million - could flock to town. Plans are also proceeding for a ferry service to Nantucket Island.
So far, the area has only 500 hotel rooms to accommodate all these prospective visitors. "We are anticipating major retailers and restaurants," says Mr. Camara, who hopes hotel chains will begin to take notice.
Downtown redevelopment is a national phenomenon, says Doyle Hyett of HyettPalmer, an economic development firm in Alex-andria, Va. Downtowns on the rise include Long Beach, Calif; Medford, Ore.; and St. Charles, Ill.
"It's a combination of planning and the economy," he says. "The American public is fed up with malls and is looking for ... an alternative to the sameness."
Tourists will certainly find that in New Bedford. Across the street from the whaling museum is the Seamen's Bethel. One of the former parishioners was Herman Melville. Camara often takes groups into the restored church, which has a bowsprint for the pulpit, and gives them a real New Bedford experience. "I play the part of Father Mapple, bringing down fire and brimstone," he says with glee.