Forging a Future Beyond Steel

A $400-million entertainment complex in Bethlehem, Pa., may become a model for old industrial sites

Workers with acetylene torches are knifing through the pipes and girders that used to be Bethlehem Steel Corp.'s Basic Oxygen Furnace, a fiery behemoth that once refined molten iron into molten steel.

Soon, the wreckers will start on turn-of-the-century buildings where the steel for the George Washington Bridge, the Waldorf-Astoria, and even the Trans-Siberian Railroad was poured from giant ladles.

At one time there were 30,000 workers - many of them immigrants - marching with their lunch buckets to a complex that stretched for 4-1/2 miles. Today, just 800 employees are left, baking coal into coke, and many of them may lose their jobs by the end of March if a buyer can't be found.

Whether the cokemaking operation continues or not, this city on Pennsylvania's Lehigh River has already begun to write the next chapter for the historic site.

Rising out of the soot, say company officials, will be a National Museum of Industrial History - a Smithsonian Institution affiliate - hotels, stores selling blue jeans, new restaurants, an IMAX theater, and even a pair of ice-skating rinks. The 160-acre rehab will be called "Bethlehem Works," as in "the steel works." The $400 million effort is an attempt by the city to rebuild its future from its past.

The Bethlehem renovation will be among the largest "brownfield" sites ever returned to productive use. Pennsylvania Gov. Tom Ridge has made the Bethlehem project a high priority for his administration. "The governor is committed to making this site a demonstration project for the commonwealth and maybe for the country as to what can be done for a brownfield site," says Kenneth Smith, the former city mayor, now an official at Lehigh University.

The Bethlehem project will be watched by other communities that have suffered economically as multi-acre factories close. "There are dozens of cities, such as Detroit, Chicago, Trenton, N.J., and Newark, N.J., involved in this type of thing that have either thought about it or have shovels in the ground," says Elizabeth Collaton, senior policy analyst with the Washington-based Northeast-Midwest Institute, a nonprofit public research group.

While this project could put Bethlehem on the map anew, the rapid pace of this city's transition from rust bucket to showroom model has already garnered attention. Credit is often given to the company's commitment. "We could have left it as it is but that is not our ethic. We feel we have a very, very significant responsibility to the community," says Curtis "Hank" Barnette, chairman of Bethlehem Steel.

A city with Moravian roots

It's a community with a long and remarkable history. The north side of Bethlehem was settled in 1741 by the Moravians, an industrious socialistic group that built the first waterworks in the country. This part of Bethlehem still exudes the feeling of old wealth and German order.

The Old World work ethic is part of the culture. In November, the unemployment rate in the Lehigh Valley region was down to 4.3 percent, below the national average of 4.7 percent. Even many of the laid-off steel workers, who were used to getting $15 per hour, are landing jobs at $12 to $15 per hour.

"Most of the maintenance people usually get jobs," says Dale Bachman, head of the United Steel Workers Dislocated Workers Program, "and one of the things that helps our people is that many of them are pension eligible and will work for lower wages."

Another reason for the region's success is that it began setting up industrial parks to provide some employment diversity. Today, there are 29 industrial parks, providing jobs for 30,000 workers on 4,875 acres of former farmland. "They are jobs where people could raise a family and not have to transfer themselves out," says Mr. Smith, "it's one of the reasons why the population base has remained pretty level for the past 30 years."

Some of the jobs are in warehouses - distribution centers - because Bethlehem is less than two hours from New York and Philadelphia. "It's really a proximity to the New England corridor, it's become a corridor city, exporting services to the region" says Thomas Hyclak, a professor of economics at Lehigh University here. Commuters, drawn to reasonable housing prices, are also moving into the region. With a relatively new interstate, the commute to New York is less than two hours.

But if the Bethlehem Works project proceeds, the future of Bethlehem is likely to have tourism stamped all over it. The overall developer is the Enterprise Development Co., begun by James Rouse, who was known for such tourist attractions as New York's South Street Seaport, Baltimore's Harbor Place and the Faneuil Hall market complex in Boston.

Family fun in old furnaces

"It's going to have a family orientation," says Thomas Kucharski, the president of the Lehigh Valley Economic Development Corp. Mr. Kucharski is hoping the interest in Bethlehem Works will have a regional spill-over to Allentown and Easton, which have their own tourist attractions.

The big draw will be the museum, which will display such items as giant locomotives, early typewriters, and other examples of inventions that record the nation's industrial history. Besides tourists, the museum is expected to attract scholars doing research in its archives. "We see it as more than a one-day theme park," says Stephen Donches, a vice president of Bethlehem Steel.

There are also plans for a 16-screen movie complex, an IMAX theater that uses a giant screen, and a world-class natatorium. Mr. Smith says there is a verbal agreement with the National Hockey League for the two planned ice rinks. A current NHL-licensed rink in Birch Run, Mich., includes the NHL-sized rinks, retail stores, and hockey arcade games.

To help remind visitors what used to be on the site, the developers plan to leave standing several of the blast furnaces. Some of the buildings will be built inside walls first constructed of stone in the late 19th century. And, there may even be some light industry on the site.

Once the project is up and working, local officials hope it spurs local businesses on the adjacent streets leading up to Lehigh University. Already, there are some signs that real estate speculators are starting to move in to an area that was last vibrant in the 1950s. As a way to help connect the well-heeled northern part of town with the working class south, local officials are considering building pedestrian bridges across the river.

The caveats

Before local officials can start to crow, there are still several important steps that have to happen. For example, the developer has to line up the funding. Mr. Donches says the money will be a combination of private and public investment. He won't quantify Bethlehem Steel's financial commitment except to say it has already been "a couple of million" dollars. The Smithsonian is expected to launch a national fund-raising campaign to come up with $60 million to $80 million.

Local officials are also quick to admit there are also some major infrastructure issues yet to be tackled. "You need a new road if you are going to have 1.2 to 1.5 million visitors per year," says Donches.

The town also needs to add hotel rooms. Donches is talking to two "parties" about turning the company's old 13-story headquarters building, closed in 1994, into a hotel and convention center.

Some local residents have complained about a planning process that they feel is closed to outsiders. Three years ago, Barbara Flanagan, a writer, watched as the main steel works were shut. "Everyone was in denial - they thought the company would take care of things." She wrote some critical essays. "I think that got them angry," she says, "But, I loved this community and I wanted to ask them, 'What do you want your legacy to be?' "

The answer may be clear by the year 2001 when the museum is scheduled to open. And, in 10 years, Smith says, "people won't believe their eyes."

Music and Steel

* Population: 71,428

* On Christmas Eve, 1740, a group of Moravian settlers from Czechoslovakia gathered to celebrate the holiday. Their leader consequently named the settlement 'Bethlehem.'

* The city is home to the third-largest industrial area in Pennsylvania.

* Bethlehem Steel Corp., headquartered here, is the second-largest steel producer in the US. It now has plants in Sparrows Point, Md., and Burns Harbor, Ind.

* Bethlehem had the first girls' boarding school in the US, opening in 1743.

* The city has hosted an annual music festival dedicated to the works of Johann Sebastian Bach since 1901.

Source: Bethlehem Chamber of Commerce

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