A REBIRTH IN BETHLEHEM
August 8, 2001

A report on efforts in one town to redevelop a steel mill that was once at the center of a company's power and a town's survival.

 

July 19, 2000: A look at the changing design of America's neighborhoods. June 22, 1999: The Senate fails to pass new protections for the steel industry. March 16, 1999: A closer look at the troubled U.S. steel industry. Browse the NewsHour's coverage of business   Bethlehem Works: New Proposed Downtown Homepage Bethlehem Steel Corp. Bethlehem Online	RAY SUAREZ: This is the Bethlehem Steel Mill, once home plant of the Bethlehem Steel Corporation, the nation's second largest steel producer. It stretches four and a half miles along the Lehigh River and covers one-sixth of the land area of the city of Bethlehem, Pennsylvania, smack dab in the center of it. At its peak, "The Steel," as it is simply called around town, employed 30,000 men. Ed O'Brien was a steelworker. ED O'BRIEN: Bethlehem Steel then was Bethlehem. They were Bethlehem. They owned everything in the city. Everything just revolved around Bethlehem. RAY SUAREZ: For most of the 20th century, the plant was good for Bethlehem. But beginning in the early '80s, it closed down gradually over a period of 15 years. ED O'BRIEN: Everyone knew in their heart that Bethlehem Steel was going to be gone, but it's just something you didn't want to accept-- a Bethlehem without Bethlehem Steel.
	After "The Steel"
	RAY SUAREZ: Bethlehem's story is not unique. In the decades since the Second World War, a lot of American industrial cities have seen its major employer move away or its bread and butter industry become obsolete and shut down. The question for Bethlehem and for the corporation that bears its name is, how much of the past do you carry into your future? "The Steel" is now the nation's largest single industrial Brownfield site. When we were at the plant, a demolition company bulldozer with giant claws was pulling apart the enormous coke ovens. For the past five years, the company has been busy cleaning up and recycling the abandoned plant. When the last part of "The Steel" closed in 1998, a site like this was not the legacy Bethlehem Steel's management wanted to leave behind. Bethlehem Steel's Vice President for Corporate Affairs, Steve Donches. STEVE DONCHES: It's such a large part of the community that if the city of Bethlehem were going to prosper, something had to be done with this 1,800 acres. RAY SUAREZ: But what? The site proved too costly for other heavy industries to use, and far too contaminated for housing or schools. So Bethlehem Steel Corporation made plans to develop a mixed use site including an industrial and office park, a technology district, plus a family-oriented entertainment and retail complex with a Smithsonian-affiliated museum of industrial history. STEVE DONCHES: It will give in one place the opportunity that doesn't exist anywhere else in the United States, and that is to present the full story of industrial development in America from the early 1800's. This will be a very serious venture as well as venture to have some fun at. RAY SUAREZ: Duane Dunham, Bethlehem Steel's chief executive officer, explained the plant's role in the nation's history. DUANE DUNHAM: This plant was a major force, really, in building the United States, transporting people throughout the United States, and defending America. RAY SUAREZ: The mill dates to the 1870s, but its golden era began when gilded age entrepreneurs built a revolutionary new rolling mill that produced the structural steel that built the skyscrapers of America's urban landscape. DUANE DUNHAM: We literally built New York City with the "I" beam that was started right here at this facility. RAY SUAREZ: It also made steel for the Golden Gate and George Washington bridges, along with a good portion of the nation's ordnance in both world wars.
	The changing demographics of Bethlehem
	RAY SUAREZ: With its constant expansion, the steel became a magnet for wave after wave of immigrants from across Europe, including John Wadolny's parents. JOHN WADOLNY: We referred to them, when I was going to school, as the hunky south side-- the Polacks, the Hungarians, the Slovaks, the Windish -- the Lithuanians... We -- included in there was the Irish. ( Laughs ) FORMER MILL WORKER: Let's throw a few of them into the mix. RAY SUAREZ: Guillermo Lopez's father was part of the Puerto Rican migration to Bethlehem and to the mill after World War II. Lopez remembers his first day of work in the steam, water, and air department. GUILLERMO LOPEZ: If I was ever to paint you a picture of what hell should look like, that's what the place was. I was 18 years old and there was these railroad tracks in this dungeon, and all you saw was fire and steam and smoke. RAY SUAREZ: Nevertheless, after the war the workers at the steel earned good money, money that bought homes in Bethlehem's South side neighborhoods and sent their kids to college. DON CUNNINGHAM: I started with the steel in 1964 at ingot mold foundry. I spent all my 31 years in that foundry. You just went to work every day because the guys were there and the work was there, and you just made the best of it. RAY SUAREZ: But it didn't last. Competition and new markets finally sealed the aging plant's fate. Next to the plant, the south side is now populated by a new wave of Latino immigrants, and Guillermo Lopez has become a community activist. He says the proposed Bethlehem Works could have enormous economic and social implications for the neighborhood. GUILLERMO LOPEZ: As the steel mill was developing, these homes would just crop up and develop. And as things got better, those that lived in them would sell them and get something better. Someone else would move in, and before you know, they had country clubs and all those things. I think we need to continue that ripple effect of that 1,800 acres now continues to develop this neighborhood here, also. RAY SUAREZ: Amid such expectations, the first phase of Bethlehem Works should open next summer. There will be a multiplex cinema, specialty shops, restaurants, an ice hockey rink, and museum preview center. By 2005, the museum will be housed in machine shop number two, one- third of a mile long. When it was built in 1889, it was the largest industrial building ever built. The old headquarters will be a hotel. The blast furnaces will be painted and preserved. The gas blowing engine house and the 250,000 square-foot open-hearth shop will become an iron and steel showcase. The old steel rail mill will become a swimming and diving center. An old ore bridge will serve as a gateway to the entertainment complex with the ore pits as a parking lot. STEVE DONCHES: We're going to convert the ore transfer cars to people movers. You park in that regional lot, you get out, you get in the ore transfer car, and you come down the trestle. RAY SUAREZ: And that will be your introduction to the place.
	A massive investment
	RAY SUAREZ: Total estimated cost? About $1.5 billion over the next decade, from public and private sources. Jobs? Up to 10,000. Tax base? An estimated $70 million a year. But will it happen? That is the $64,000 question. Unfortunately, the answer depends on Bethlehem Steel's financial health. The company has posted continual losses; over a billion dollars in the last year. In a letter to employees in May, CEO Dunham asked that redevelopment work in Bethlehem be cut to "minimum essential levels," with emphasis on activities "that generate cash." DUANE DUNHAM: Yes, we've had to do some rather drastic steps here. But that doesn't mean that when business conditions improve that we won't continue to move back on track, because that's our commitment. It's been our commitment since day one. Not to be able to make sure that we've driven a stake in the ground in terms of our heritage, I think, would be a serious mistake. RAY SUAREZ: Bethlehem Steel says that it's beginning to recover some of its initial costs. And the city is building new roads and sidewalks and putting in streetlights. The mayor of Bethlehem, Don Cunningham, defends the city's $13 million investment in land still owned by Bethlehem Steel. MAYOR DON CUNNINGHAM, JR.: For 125 years, that land has only been used for one purpose. There is no infrastructure. There is no cityscape that exists on that land. And if we don't make that investment, we can be sure that that land is going to sit unused for a long period of time. RAY SUAREZ: While Cunningham is optimistic about new tax receipts flowing back to the city from tourism and recreation, he would rather focus the city's resources on more technology centers and their high-paying jobs. Bethlehem has absorbed The Steel's closing and has a fairly, strong, diversified economy. The mayor knows what his city needs to stay competitive and growing has changed plenty since he was a kid. MAYOR DON CUNNINGHAM, JR.: There were no restaurants in this city. It was a blue-collar city, working class. It was extravagant if you went out to eat. In the last three years the biggest development we've had has been restaurants and bars in both downtowns, on the south side and on the north side. What that's a reflection of is the economic transition. There are more high-tech businesses, there are more younger, wired workers here, and that's what they're looking for. RAY SUAREZ: Mayor Cunningham wants to expand the technology district growing up in a corner of the Bethlehem Steel site. It's home to Orasure Technologies, a biotech startup that makes testing, detection, and screening equipment, a huge new market in the age of employee drug testing and the spread of AIDS. Orasure's three founders were attracted to the area by a local business incubator program. Now the company is growing so fast they already need more space after just moving in this spring. BILL HINCHEY: There is a sweetness to it. We were three blue-collar guys that grew up in industrial areas. All of us share the same value system, and there is a real desire and kind of a feeling of paying back to areas like Bethlehem that have gone through - you know -- kind of an industrial obsolescence. RAY SUAREZ: Along with the high hopes for the site, there are reservations. Despite Bethlehem Steel's public hearings on its plans, Ed Pawlowsky, a local housing activist, says both the public and the city has had very little say in the vast project. ED PAWLOWSKY: The problem that I see that's happening here is it's being developed in a virtual vacuum without a lot of input from the community. At the same time, most people realize if not this, what? I mean, the other option is to go the route of, let's say, U.S. Steel and what they did in Gary, where when they shut down, they shut down and left a huge industrial site, and in many cases left that city devastated economically. RAY SUAREZ: And Guillermo Lopez said the Latino community wasn't asked to participate, either. GUILLERMO LOPEZ: If this neighborhood doesn't buy into it, well, what you're going to have is similar to what I've seen in Atlantic City, where you have the boardwalk and maybe a block after the boardwalk, but then beyond that there's not a whole lot of hope.
	Looking toward an uncertain future
	RAY SUAREZ: Despite the community's concerns and its own financial health, Bethlehem Steel has made ambitious plans for the future of this place. Instead of abandoning it or selling to a developer of big box shopping centers, they are trying to build a place with industries young and old, plus the museum and a classy entertainment complex. But will the company survive to see its vision completed? ED PAWLOWSKY: I think one of the strong, driving forces for Bethlehem Steel to develop this project has been their commitment to this community, that they're headquartered here in Bethlehem; that there is a large number of executives and former CEO's that still live in the community. If that goes away, if they get bought out or if they ultimately go under, what will happen, you know, if that commitment is gone? RAY SUAREZ: As The Steel moves forward with the project, there are plenty of people in Bethlehem pulling for the company and holding their breath. And despite their concerns, there's remarkably little bitterness as a piece of land that made so much money and so much history tries to do it again.