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Bethlehem Steel’s Redevelopment: Winners and Losers in Public-Private Partnerships
Mark Byrnes / The Atlantic / January 17, 2013
When asked if anyone could save Bethlehem Steel, Jack Welch, former CEO of General Electric, famously said, “I don’t think Christ could have.”
The industrial giant died slowly over decades, leaving sprawling facilities behind in municipalities around the eastern United States. Not even the company’s hometown plant in Bethlehem, Pennsylvania, was spared, closing for good in 1995. Bethlehem Steel’s demise meant the city was left with over 1,500 acres of vacant railroads, offices, and factories along the Lehigh Canal.
Re-imagining that much industrial land isn’t easy for any city, let alone one whose population (currently 74,982) remains almost unchanged since 1960. But the city found an unlikely redevelopment partner in Las Vegas Sands. The company bought 124 acres of the former Bethlehem Steel site in 2007, opening Sands Casino Resort Bethlehem in 2009. A hotel, conference center, and outlet mall followed soon after.
The move was controversial, to say the least. The city council approved Sands’ land purchase by a razor-thin 4-3 vote. And even today, the casino has critics who argue that their involvement comes at a steep price. Labor groups are not allowed to meet on the site, and protests are not technically allowed to gather.
The casino has certainly been a boon for the rest of the parcel, leading to $900 million in infrastructure investments and 2,400 jobs being created. In its most recent financial quarter, it brought in $113 million in revenue; another $15 million came from Sands’ other facilities on site. Pennsylvania requires casinos to pay a 55 percent tax on all revenue. Four percent of that goes directly to the gambling center’s host community. Being in a zoned Tax Increment Financing (TIF) district, that revenue then subsidizes other infrastructure projects on the Bethlehem Steel site.
“When we were looking for other cities that did a great job integrating a casino into their city we couldn’t really find any,” says Bethlehem Mayor John Callahan. “I decided that Bethlehem was going to be the city that did it right.”