Lowell is the kind of New England mill town you invariably pass while driving on the Interstate highway in the rain. Through the beat and spatter of windshield wipers, it is not difficult to pick out against the low-hung gray clouds the darker gray, low-riding brick mills. Lining the grassless river banks like abandoned railway cars, the mills with their empty smokestacks seem sentry to a busyness long gone.

White clapboard three-family ''triple-decker'' houses with strings of laundry stretched across their back porches are inevitably what slides into view next. All the vitality of the town seems to have pulled up roots and gone South. One wonders at the people who have hung on.

This is one such archetypal mill town, all grim brick and gray on the fringes. Like the other New England mill towns that sprouted and flourished in the dawn of America's industrial revolution during the early 1800s, it faded a century later when the textile companies moved South in search of cheaper labor. Lowell gradually lost its luster as a model industrial community as its commercial lifeblood ebbed away.

For over half a century, up until the mid-1970s, the city stagnated. Only two mills remained open out of 11, population declined by one-third, and its unemployment figures stood as the highest in the state. Hell's Angels rode the city's streets. Like so many other towns on the banks of the Merrimack River, Lowell was a city to get away from.

Approaching the city today, not much seems changed at first. Center Street is still lined with the telltale pastel-colored clapboard housing. A black woman , her hair tied up in kerchief, leans against a fence, a rake in her hand. Down the way, a boy plays stickball in the road. The street is dotted with a succession of signs promoting a variety of ethnic emporiums: Santa Cruz Enterprises, Macedo Fish Market, Polish-American Citizens' Club, Portuguese-American Citizens' Club, Greek-American Citizens' Club.

But toward the heart of downtown, just past the garish blue-and-white-tiled Love's Furniture store, lie signs of new life. Turning left off of Center Street onto Merrimack, the city's main line, you immediately recognize it: urban renovation.

You know it by the sudden appearance of the cobblestone streets and brick sidewalks, a gold-leaf lettered sign, a poster advertising a women's coffee house, a parked BMW. Right next to the grape-studded plastic sign of the Athenian -Restaurant sits ''Mr. John - Unisex Hair Styling.'' And the annoyingly energetic noise of a jackhammer punctuates the autumn air.

But perhaps most significantly, there is the silent sound of low-interest loans being made. For if money, or the lack thereof, made Lowell the depressed town it was, it is money that has brought it back from the brink.

And brought it back with a bang. Ask anybody who lives here. Improved tax rates and lower unemployment figures are bandied about with great elan. The population decline has been arrested. People who previously were embarrassed to admit to a Lowell heritage are returning home to their city - a city that has fostered such notables as painter James MacNeil Whistler and author Jack Kerouc.

But of all the mill towns nestled in the New England hills, why is Lowell so determined to rise phoenixlike from its past? How has Lowell so succesfully revitalized its industrial base and renovated its storefronts, when its sister cities sit just down the river like forlorn bridesmaids?

The secret to Lowell's remarkable rebirth is a combination of powerful local personalities, creative financing, and a strong sense of civic pride - all characteristics easily found in or transferred to other hard-luck cities.

But what sets Lowell apart from the rest of the urban herd seeking renovation is its good fortune to have had history in the making grace its streets back in the 1820s. For beyond famous sons, the city is now being touted as the ''birthplace of the American Industrial Revolution,'' for it was one of the original locations of power-driven looms in the United States.

But besides its early technical achievements, the city garnered worldwide attention for its innovative labor techniques. Billed as the ''Lowell Experiment ,'' the city rose to national prominence during the 1850s as a model industrial community based on a system of ''benevolent paternalism'' between employer and employee. In a country rapidly splitting over the issue of slave labor, Lowell stood as one of labor's finest achievements. It is this bright tradition that modern Lowellians are seeking to rediscover.

Most of the spit-and-polish dollars that have landed in Lowell's lap of late are meant to revive and preserve that workingman's ambiance. Not only have the city fathers aggressively pooled the city's own financial resources, but they have also succeeded in luring private-sector and federal money into the renovation kitty. A breakfast meeting back in 1978 of city officials, private business heads, and the town's own Sen. Paul Tsongas set the cap on a $40 million national park and historical commission designed to unearth and preserve the city's cultural and architectural history. That federal expenditure was approved in the same year and the town was off and running.

Suddenly, buildings that were previously thought suitable only for demolition were being eyed as architectural diamonds - albeit diamonds in the rough - and grant and loan funding was made available for their restoration. Park rangers led tours of the 5.6 miles of canals, the renovated mills, and other labor-related exhibits. A multitude of summer-weekend ethnic festivals sprouted up courtesy of Uncle Sam.

In addition to the money for the national park, a $5 million grant from the Department of Housing and Urban Development also made its way to the city's coffers in 1979. A then-unique proposal to use the grant as a revolving fund for low-interest loans appealed to both city and federal officials as the best mileage-per-dollar system. And while the initial $5 million was handed straight over to nearby computermaker Wang Laboratories, the annual payback on that 25 -year, 4 percent loan is more than $300,000. Combined with volunteer funding from 11 local banks and the city's own contribution, the total amount available for low-interest commercial and residential loans runs nearly a million dollars per year.

Not surprisingly, Wang Laboratories subsequently relocated here from nearby Tewksbury and built a 13-story international headquarters. This greatly improved Lowell's tax base and provided a tempting lure for other industrial development. The firm also hired some 2,400 Lowell residents, which further helped cut the city's unemployment figures.

With such immediate and positive response to the collective efforts at creative financing, it's no wonder a heady feeling of success swirls about the heads of the city's movers and shakers.

''We're on the top of the heap right now,'' boasts city manager B. Joseph Tully, a gravel voiced politician who is generally credited with orchestrating the original Lowell plan with Senator Tsongas. Over a desk littered with four ashtrays and a brass whale, he talks about an unemployment rate sliced to 5 percent - one of the lowest in the state - a restored bond rating by Moody's, and a drop in the tax rate to the 1970 level. ''It's the only thing in town that's still the same price,'' he chortles.

With so much money available in so short a time, the city, with help from private business, has hired the American City Corporation (ACC), the developers of Boston's formerly rundown Quincy Market area. For $250,000 a year for three years, ACC will help determine Lowell's future commercial and industrial growth. Another HUD grant is already ear-marked for a hotel-convention center complex within the city's limits.

Other town heavyweights are just as pleased with the city's track record of late. Park Commissioner John Birchill, an ''old Massachusetts boy'' himself in navy-blue blazer and loafers, arrived at his post here three months ago. Fresh from an eight-year stint in Yellowstone and Yosemite National Parks, the commissioner jokingly refers to his new job, ''I didn't do anything wrong (to get sent here).''

Actually, it's a ''great assignment,'' he says, twisting in his Haitian cotton chair to gesture out the window at the cobblestone street covered with fallen horse chestnuts. ''I've got to throw away all that Yogi Bear stuff,'' he adds, to get to the Lowell historic park theme - that of the working person and particularly the first working women. For more significant than the simple economics of Lowell's rise and fall as a mill town is its unique heritage as the first planned industrial community in the United States. It's a story Commissioner Birchill obviously enjoys telling.

Named after Francis Cabot Lowell, who purloined the designs for the automated looms in England with his photographic memory, the city was established in 1826 when a group of Boston industrialists chose to take advantage of the Merrimack River's water power to drive the revolutionary looms. Canals were dug, locks constructed, and boarding houses were thrown up to house the farm girls recruited to work the looms.Bothered by the exploitation of labor he had witnessed in England, Mr. Lowell wanted to create a safe and cultural environment for his workers. The farm girls needed to ''live in a quality way,'' to maintain their respectability. That community became the ''Lowell Experiment.'' The rash of unprecedented educational and cultural experiments it spawned attracted worldwide attention. For the first time, women were able to obtain respectable work outside the home, attend lectures, and acquire and save their own money. They even published their own literary magazine, the ''Lowell Offering,'' and wrote some of the early feminist tracts.Despite the fact that the ''Lowell Experiment'' eventually soured due to an increased workload and pay cuts implemented to preserve company profits, the roots of that noble experiment are precisely what the Park Service and the -historical commission are about. The acquisition and renovation of former mills, some of the boarding houses, banks, and other downtown buildings is carried on between the two agencies. Additionally, the historical commission dispenses restoration money to the private owners of those buildings deemed historically significant.''It's really a carrot-and-stick type of incentive'' says commission development director Armand Mercier, a stubby man who somewhat resembles the Wizard of Oz. ''Yes,'' cuts in executive director Fred Faust, a former aide to Senator Tsongas and one of the writers of the original park legislation. ''The genius of the Lowell approach is that nobody has forced anybody into anything. The collective efforts of the state, federal, and private sector have provided enough incentive for voluntary participation.''The ''carrot'' of the commission is a kitty of grant and low-interest loan money available for private restoration - the main goal of the commission. ''We're not interested in acquisition,'' continues Faust, ''we're trying to encourage the private sector.'' The ''stick'' of that encouragement is architectural restrictions on the buildings that become written into the property deed. Out of its $6 million budget for private restoration, the commission has dispensed some $700,000 in its first two years of existence.''We've reached the point of no return,'' says Mercier, a hometown boy who worked in the mills himself. ''Even if one (financial) segment is missing, the momemtum can be carried forward.''With such banner-waving going on over the city's back-from-the-brink success - a national magazine just voted Lowell one of the top 11 communities in the country - one might expect the dissident voices to be few and far between. But some observers are voicing some hesitations, if not outright criticisms, of Lowell's priming of their own pump.One woman in a recently opened bookstore who lounged by such titles as ''How to Build Shaker Furniture,'' said, ''I know about the Newsweek article, but there's a lot the town doesn't have. I don't think they'll ever get people downtown to shop when they have the luxury of free parking outside the city.''Parking is the least vitriolic complaint being voiced about Lowell's recovery. As in any renovated neighborhood, the most ballyhooed criticism concerns that evil of displacement - gentrification. And while development director Mercier hastens to reassure a visitor that ''Lowell is being restored for the residents of Lowell,'' other residents of multiethnic Lowell aren't so sure.''Low-income families are being forced out,'' says community organizer and lifelong Lowell resident Charles Gargiulo. ''Gentrification is taking place, rents are being raised abnormally, forcing some families out.''City manager Tully happily growls out a Lowell subsidized housing statistic of 18 percent - far above HUD's recommended 5 percent mark. He intones ''I don't want to turn this city into a subsidized housing situation, and I'm not going to do it.''But community critics argue that the majority of that subsidized housing is for the elderly. Raymond Pere, housing co-ordinator for the Hispanic community action group UNITAS, says, ''The shortage of family housing in this town is bordering on the ridiculous.'' The Lowell Housing Authority reports at least 800 families on a subsidized housing waiting list.Why is so much of Lowell's housing assistance for the elderly? ''The answer is purely political,'' says Gargiulo, himself a resident of The Acre, Lowell's infamous slum that is now largely populated by Puerto Ricans. ''Developers prefer the elderly (rather than minority families). There are fewer hassles. It's a subtly racist way of dealing with things.''The Acre, a five-block neighborhood of derelict clapboard homes, has become the flashpoint in a debate between city officials and community organizers. The site of a serious arson problem several years ago, the Acre has settled into a state of dull stagnation controlled by absentee landlords. Certain city officials admit they're stumped as to how to improve the controversial neighborhood. A new program of neighborhood rehabilitation, some of which falls within the Acre confines, is currently being studied.As in all municipal disputes, it is a question of power. ''Up until now the city hasn't realized its own success,'' says The Rev. Terry O'Connell, a priest at one of the two parishes serving the Hispanic community. But now that the city seems to be coming into its own, ''they don't want to dilute their power. Lowell is a very political town. Unless you have power or connections, you have no input.''And it's not only Hispanics who have complaints with city officials. Cleotha Jackson, president of the Merrimack -Valley NAACP chapter, says ''Lowell is a tough nut to crack.'' Critics cite a less than 1 percent figure of minority hiring for city employment. They also criticize the newly appointed affirmative action officer, Patricia Sullivan, an appointment long delayed by the city council. She is a former employee of a city council member.However, the condition of Acre housing and the lack of minority hiring are less important than their symbolic importance as testimony to the lack of communication between the Hispanic population and the heavily Irish city management. Ironically, it was the Irish immigrants, the second labor force in the mills after the farm girls returned home over wage disputes, who were the first ethnic minority to dwell in the shantytown of the Acre. As they gradually moved up in the city's ranks, a sizable Greek population followed, which was replaced with the migration of Puerto Ricans nearly 10 years ago. They have stayed at the bottom of the economic ladder.Why the lingering Hispanic problem? For O'Connell the answer comes down to community commitment and simple economics. ''The Puerto Ricans are very mobile population,'' he says. ''The Greeks and the Portuguese have developed a good economic base in Lowell. But the Hispanics are always going back to Puerto Rico - maybe next week, maybe next year. They've yet to make any long-term investment in the community.''Long-term investment is exactly what the city movers and shakers are after. For the most part, they seem to have gotten it from the federal government, the state, and from themselves. Says another life-long Lowell resident and boyhood chum of city manager Tully, Mayor Robert Maguire, ''Our motivation isn't personal gain, it's pride in the city.''Echoing the mayor's sentiments is Pat Mogan, Lowell superintendent of schools and the man whom many consider the original visionary for Lowell's rebirth. A smallish man with white hair and bright blue eyes, Pat Mogan stands outside the brick Lowell Heritage State Park building in the waning October sun. He is trying to describe his vision for the city.''We're an ethnic, industrial city, and conventional wisdom says shed both those labels. But no matter how hard we scrub , that's what we are,'' he says with no trace of rancor in his voice. ''Our greatness comes from our adaptive use,'' he continues, oblivious to the chill wind whipping off the canal.Pat Mogan's goal is to re-create Lowell as ''that vital city with a purpose''; to help Lowell residents erase the negative view of their city they have so long held. ''I wanted people to have a positive association with their environment,'' he adds. ''People without a past don't have any future.'' The physical restoration of Lowell is only symptomatic of the larger restoration of the people's spirit. ''We had to do this,'' he concludes. And with the wind off the Merrimack at his back, he turns and crosses one of his cobblestone streets.

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