Forging Ahead 7: Lands of Opportunity

At Steel Stacks, the former Bethlehem Steel blast furnace acts as a back drop to the arts venue at night with artists such as Joan Osborne. John Rennison The Hamilton Spectator

At Steel Stacks, the former Bethlehem Steel blast furnace acts as backdrop to the arts at night with artists such as Joan Osborne. John Rennison, The Hamilton Spectator

 

“You want to be in control of your future. You don’t want to be pushed into responding to potentially what might be the lowest common denominator rather than reaching.”

Former Pittsburgh mayor Tom Murphy has run Hamilton’s Around the Bay Road Race. When asked what he thinks of it, he doesn’t mention how flat the first two-thirds are. He doesn’t remark on the waterfront scenery. He doesn’t even curse Heartbreak Hill.

“I was struck by the amount of opportunity,” he says. “The amount of underused land.”

He’s not the only one who’s thrown that “o” word around recently.

In mid-May, commercial real estate organization Colliers International released a study calling Hamilton “a city of opportunity.”

The idled U.S. Steel lands have the potential to bring as many as 24,000 jobs to the city, says Sydney Hamber, senior vice-president with Colliers.

Stelco was bought out by U.S. Steel after declaring bankruptcy in 2007. Last September, U.S. Steel Canada went under creditor protection. It’s working to sell assets including 813 waterfront acres.

Hamber says it’s impossible to predict what will end up there, but he suspects manufacturing is most likely. Maybe some small businesses, agricultural outfits or research facilities. With good design, proper cleanup and additional roads, it would be attractive to various industries.

Ex-mayor Murphy’s advice is to worry about quality. Don’t adopt a policy of “for-now” fixes.

“You want to be in control of your future. You don’t want to be pushed into responding to potentially what might be the lowest common denominator rather than reaching.”

In his experience, developers tend to have an eye toward developing land in a transactional way rather than a strategic one.

That’s why the city of Pittsburgh bought up so much of its own land rather than waiting for someone else to step in. Murphy didn’t want the city to take what it was given. He wanted the city to make something out of what it had.

It ended up with recreational trails and shopping centres, developed through private partnerships, that are integrated with the neighbourhoods surrounding that surround them. The city worked with the local football team to build a sports complex, and with post-secondary institutions to put up research facilities.

Hamber says Colliers thinks the U.S. Steel site would be a great location for a McMaster centre.

And the university does have a record of investing in brownfields — it turned the old Camco plant on Longwood Road into the 22-acre McMaster Innovation Centre for research and startups.

Murphy says someone needs to be thinking about how everything fits together — land, employment, the city, residents. Don’t deal in parcel-by-parcel; come up with an overriding vision that will give your city a wow factor, he advises.

“With 800 acres, what would be, for me, really important, is understanding how (those acres) connect and how you’re going to create value with a big strategic vision rather than incrementally do these little developments that might create some value but not do a whole lot.”

In Buffalo, this was Steel Winds, a 14-turbine wind farm that powers 9,000 homes with alternative energy. On another steel site across town is SolarCity, a solar panel site that will provide 3,000 jobs. It’s another example of the kind of public-private partnership that Pittsburgh focused on.

Hamilton does have some experience with this.

In 2001, the Environmental Remediation and Site Enhancement (ERASE) Community Improvement Plan was launched to give developers rebates on tax increases that resulted from the development of contaminated properties.

Since then, there have been 44 applications for redevelopment grants. Half of those projects have been completed or are underway.

The Lowe’s home improvement store on Woodward Avenue received an $850, 800 grant. Edible oil-producer Bunge Canada got $1.1 million to expand into an unused Sunoco tank farm. Beach Community Real Estate used $271, 000 for townhomes and condo apartments. ERASE also helped build the Starsky Foods grocery store at Nash and Queenston roads, although there was some question as to whether the former car dealership and service centre site was actually a brownfield.

The U.S. Steel lands would be a candidate for the funding outlined by ERASE guidelines.

The worst option would be for the U.S. Steel land to sit vacant, says Marvin Ryder, an assistant professor of marketing at McMaster University.

Empty land provides no employment and no tax revenue.

The second worst option, he says, would be to use the lands for warehousing space. Warehouses tend to employ small staffs of only 20 to 30 people.

Ryder has the same jobs-first focus held by former Youngstown mayor Patrick Ungaro, who located industrial parks on various former steel lands — the kind of industrial parks Hamilton is running low on. Ryder wants to see manufacturing move in.

He knows there are people who would be against that — people who want walking paths and parks rather than industry, but he doesn’t believe it’s an option.

If we want to turn brownfields into people-friendly places, Ryder points to the former Rheem site on the west harbour. That would work. But U.S. Steel? No way. For the simple reason that steel’s not gone.

ArcelorMittal Dofasco isn’t leaving any time soon, Ryder says.

In recent years, it has increased employment, added shifts and invested capital in its site, which is adjacent to the U.S. Steel lands. The company recently recorded its highest ever quarterly earnings, and, in February, paid out $22 million in profit-sharing to full-time employees. (ArcelorMittal Dofasco declined comment for this series.)

Background: ArcelorMittalDofasco thrives as US Steel topples off a cliff

In 2015, the company’s first quarter earnings before interest, taxes, depreciation and amortization were its highest on record.

“The problem here in Hamilton is we don’t have all of those lands,” he says, referencing the miles of industry along the waterfront. “Dofasco’s still operating there. And even though you want to rejuvenate … the U.S. Steel lands, you’re not going to put condos there because no one is going to want to live next door to an active blast furnace.

“So our redevelopment of those brownfields will be, in essence, to put them back into use for either commercial or industrial purposes, not really that much of a people-friendly purpose.”

 A running/cycling trail runs behind the Steel Yard Commons shopping centre along the railway yard with ArcelorMittal in the distance.  John Rennison The Hamilton Spectator

A running/cycling trail runs behind Steeyard Commons along the rail yard with ArcelorMittal in the distance. John Rennison The Hamilton Spectator

Cleveland, though, has found a way to combine a blast furnace with a shopping complex and recreational trails. Its Steelyard Commons shopping centre is located beside the still-operational ArcelorMittal.

The development brought needed services closer to Clevelanders, the same way Nations Fresh Foods brought a much-needed grocery store to downtown Hamiltonians.

And while no one is getting rich from Hamilton’s recreational trails, they generate economic activity. In 2012, more than 315, 000 walkers and cyclists used paths at Bayfront Park, Princess Point, Confederation Park and other locations.

Jordan Yin, author of Urban Planning for Dummies, says it’s important to understand that land redevelopment and re-employment are not necessarily related.

Abandoned land is never good, he says. Restoring it to active use, whether that’s commercial, civic or residential, whether that’s on or off the tax records, is more significant.

Yin says businesses and philanthropists tend to get excited when individuals and communities are excited too. They want to see someone else digging in and getting involved.

This could even be manufacturing, but not the way it once was.

“The old big industry model is not really how urban manufacturing areas work anymore,” Yin says. “And steel? Steel in particular just has these massive economies of scale. There is really no industry that can replace it. There’s nothing like steel.”

That’s why it’s still being made.

The three rivers that meet in the core of Pittsburgh were once lined with steel production as far as the eye could see. John Rennison, The Hamilton Spectator

The three rivers that meet in the core of Pittsburgh were once lined with steel production.  John Rennison, The Hamilton Spectator

Pittsburgh has the only remaining vertically integrated steel mill in Pennsylvania. Allegheny Technologies put $1 billion into a world-class rolling mill in Brackenridge, Pa. U.S. Steel sank $600 million into its Clairton, Pa., coke plant.

So people need steel, but steel doesn’t need people anymore … not as many, at any rate. There was a technological revolution, says John Smith, chair of the department of history at Bethlehem’s Lehigh University.

In 2000, Smith toured a Baltimore plant he thought was shut down. It was operational, but the thousands of people it once took to run the place were gone.

“(Steel’s) importance peaked about 1920,” he says. “The railroad used more steel than any other industry and, really, the plight of the steel industry in some ways followed the plight of the railroad because they lost their best customer.”

People point fingers in 100 directions — rail, management, unions, low foreign wages, and cheap steel, technology replacing jobs or, in some cases, failure to keep up with new technology.

Keeping up with that technology is what mills do to keep going, says Barry Fairburn.

He started working at Stelco straight out of Westdale Secondary School. He was recruited when the company visited the school in 1962 and worked as a credit rep until he retired in 1999.

Barry Fairbain started at Stelco straight out of Westdale High school.  He was recruited when the company visited the school in 1962.  John Rennison The Hamilton Spectator 5/26/15

Barry Fairburn started at Stelco straight out of high school.  John Rennison The Hamilton Spectator

That job paid for his Hamilton home and put his kids through school. He says he was lucky to come through the business at the height of steel production, before foreign imports were a threat.

Fairburn is curious to see what happens to the land when the bankruptcy issues are sorted out for U.S. Steel Canada.

“The human aspect of the decline of the steel industry in those U.S. cities that is extremely interesting was not the devastating impact on these communities, but the fact that most of them are starting to not come back … as steel or industry, but … as other activities — cultural, recreational, entertainment and so on and so forth,” he says.

He was impressed by Bethlehem, Pa., where he visited SteelStacks, and indoor/outdoor arts venue for concerts, festivals, film and more. He was less impressed by the Sands Casino next door, and didn’t visit the 40-hectare industrial park that takes up the rest of the former steel site.

Something like this wouldn’t be out of place in Hamilton, especially given that the city is out of industrial park space. The idea of a casino has been tossed around in the past. And for years, the arts have been credited as a catalyst for downtown renewal.

Main entrance to to the site.

Main entrance to to the site, John Rennison, Hamilton Spectator.

People accept that arts and culture contribute to quality of life, says Kassie Hilgert, CEO of ArtsQuest, which operates SteelStacks in Bethlehem.

People don’t always think about the arts in terms of job creation — certainly not on the level of steel.

She wants to see Bethlehem become a cultural tourist attraction that pulls in people year-round, not just for Musikfest, the 10-day festival that draws 900,000 fans. She’d like it to be the kind of place where the arts are seen the same way health care and universities are viewed.

It’s tough in cities whose identity is tied to one thing, though, especially when so many people bristle at moving forward. To them, it’s the same as being left behind.

What’s clear is that the past is in the past.

“The days of employers off Burlington Street going to the schools to recruit kids, those days are long gone,” says Fairburn. “Even when you drive down Burlington Street now, it’s just a ghost of what it was.”

You want to keep the character, the authenticity of a place, but Murphy says it has to be a frank conversation. Plain and simple, it’s not going to be a job at the steel mill with a high school education anymore.

You have to get people to think and talk about that and come up with solutions.

“Based on the Pittsburgh experience, there is probably more than one path,” says Bill Flanagan, chief corporate relations officer for the Allegheny Conference on Community Development. “It may be possible to build on a strong sense of place and concern about the future. It helps if the powerful community leaders are natives who really care about their hometown.

“Another path is to emphasize the crisis and encourage people to work together to meet the challenge. During (Pittsburgh’s) comeback period, it helped to have good data. They benchmarked other places to better understand the competition — and the results were so striking that they motivated people here to make changes. “

Sure it’s expensive and every city is cash-strapped, but Murphy’s question to them would be “What’s your budget?” There’s always money, it’s a question of priorities.“This is an opportunity, instead of the end of the world, for you to make a smart choice about what you want to do with your life,” he says.

“You have to look around and ask yourself, what’s the opportunity that doesn’t exist that could exist?”

akenny@thespec.com

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