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Famed Steel Plant Undergoing Radical Transformation

Bethlehem Steel was once the second-largest steel company in the U.S. Economic troubles and foreign competition forced it to close its doors a decade ago. But now, as VOA's Susan Logue reports, the plant is undergoing a major transformation.

The blast furnaces have been cold for a decade and the buildings that remain at this site are eerily quiet. It's difficult to imagine today that this was once home to the second-largest steel manufacturer in the United States: Bethlehem Steel. This plant, the company's first of many, operated for nearly a century and at one time employed more than 30,000 people.

Bethlehem steel helped build US

"They were the best," says Richard Check, senior, who went to work for Bethlehem Steel after his father and seven older brothers did. He worked for the company for 44 years and still speaks of it with pride.

"They just got better, and better and better, because that's all they knew how to do, was to make the best materials used in the world."

Materials made by Bethlehem Steel were used to build much of the U.S. infrastructure, including the Golden Gate Bridge in San Francisco and many skyscrapers in New York. Bethlehem was also a major supplier of steel during the First and Second World Wars, and helped build the sprawling interstate highway system in the 1950s and 60s.

Plant closes

But in March of 1998, all production at the Bethlehem plant ceased. Steve Donches, who was Bethlehem Steel's Vice President of Public Affairs at the time, says, "Reasons for the failure were complex."

"This plant was famous for the large beams for major construction," he says. "Markets changed; suppliers changed; and steel is a very capital intense industry. Demand became lesser and that put the squeeze on. In the late '80s imports took almost 50 percent of the market."

When the steel mill closed, it not only meant a loss of jobs for this community of 73,000 people, it also left a polluted site known as a brownfield, measuring more than seven square kilometers on the banks of the Lehigh River.

"In the steel site, you have the largest brownfield in the United States," says Bethlehem mayor John Callahan.

Turning a liability into an asset

But Callahan says what was a liability is now becoming an asset. "We are rebuilding on that site and bringing thousands of family-sustaining jobs back to this community in a way that represents every possible use you can imagine."

Bethlehem Steel initially took the lead in transforming the site from industrial to commercial use, with plans to put in facilities for recreation and entertainment, a conference center, and a museum of industry.

"They did a lot of demolition and a lot of investment to make the site more developable," Callahan says. "Unfortunately their vision never came to fruition."

That was due largely to a lack of available funding. Bethlehem Steel declared bankruptcy in 2001.

Casino enters picture

That left the site in limbo once again… until 2006, when a new vision was proposed for the site. This one carries over much of the previous plan, but at its center is a hotel and casino, because funding for the transformation comes from a company based in the gambling capital of the U.S., Las Vegas, Nevada.

"The idea of being part of this historic rejuvenation of the site really interested us," says Robert DeSalvio, president of Sands Bethworks. "The story of the Bethlehem Steel Corporation and the building and defending of America is a piece of history that we want to make sure we keep as a part of this operation."

DeSalvio says the company plans to save 22 structures on the site, including the huge, iconic blast furnaces, which will be re-painted and illuminated with architectural lighting.

The Sands' dedication to preserving much the former Bethlehem Steel site is one of the reasons many in Bethlehem, including Mayor Callahan, welcomed its participation.

A city steeped in history

"It was important for us not to tear those buildings down," Callahan says. "We are a 265-year-old city. We have buildings from the colonial era, so while we respected our colonial history, I thought it was important to pay homage to our industrial history."

Bethlehem was founded in 1741 by a Christian sect, the Moravians, from what is now the Czech Republic. Their community grew up on the north side of the Lehigh River. There is a college here and shady streets with stately homes. The commercial area is home to fashionable shops and restaurants.

The south side of the Lehigh River grew up with the steel mill. The immigrants who came here in the early 20th century lived in row houses in the shadow of the plant and its blast furnaces.

A city divided

When residents of Bethlehem heard a casino was coming to town, they began to take sides, says Steve Donches, now president and CEO of the National Museum of Industrial History. "In the beginning there was a split, almost 50-50 pro and con, to gaming," he says. "Over time people have come to believe the development will proceed in an orderly fashion with good planning and have the best impact economically for the community."

Indeed, this reporter could find no one who was willing to speak on the record in opposition of the new development, even among those who had been vocal opponents before ground broke on the new casino.

Mayor Callahan firmly believes the site could not be preserved as it is without backing from the Sands. "It really did take a company that had tremendous ability to drive capital investment and that had a shared vision for repurposing the buildings."

The full economic impact of Sands Bethworks won't be known for a while. The hotel and casino are scheduled to open in June 2009. The company says they are anticipating over 5 million visitors during their first year.