Sunday, October 14, 2001

Middletown finds its way

Industrial town grapples with change

By James McNair

The Cincinnati Enquirer

a MIDDLETOWN �It's Sunday-morning quiet downtown on Main Street. Stoplights change for carsnowhere in sight. The Sorg Paper mill, shut more than a year ago, standssolemnly like a penitentiary wall at the west edge of town. Ben Ligon's 76Service is servicing nothing.

 What makes the sceneso contradictory is that this is a Friday, not a Sunday. Banks, governmentoffices and stores are open. But the real Main Street, with businesses teemingwith customers, is 10 miles away �at the city's lone link to Interstate 75.

Mr. Ligon, a wiry 66, doesn't seem to mind the lulls betweendoing oil changes. The gas pumps are long gone, and his two bays are empty, asis the Snack-Rite machine inside the propped-open front door. Still, Mr. Ligonstays open from 8 to 5 and works Saturdays.

 �It's just something to getaway from home,� heshrugged.

 Many cities and townsshare the dilemma of stagnant downtowns and suburban flight. Middletown,though, has a more fundamental problem at its doorstep: Trying to make itselfover as a diversified business center after a century of dependence on steeland paper.

 The effort stemspartly from the recognition that Middletown, perched squarely between Cincinnatiand Dayton, has a future as a regional business hub and commuter haven. Butthere's another factor beyond the city's control: The continuing unraveling ofits primordial manufacturing sector.

 In May 2000, SorgPaper called an end to a 148-year run and laid off its last 200 employees.Square D, an electrical devices maker, is dislodging 250 workers through thephased shutdown of its 101-year-old Middletown operations. And AK Steel � the successor toMiddletown's longtime corporate benefactor, Armco � has said that a slumping steel market and newenvironmental-compliance mandates could force it to halt raw steel productionand eliminate 2,000 local jobs.

 The upheaval inmanufacturing goes back several decades and has made Middletown lessself-contained and less certain of its identity. More and more, natives aregoing elsewhere for work.

 �The aim of most of myclassmates in 1951 was to get a car and get a job at Armco,� said City Council memberFred Sennet. �But today,it's tough to keep a kid in town because there are fewer jobs in the steelmills and paper mills. It's tough to keep his parents in town.�

 To this day, the cityof 51,000 owes its economic vibrancy to steel, paper, airplane parts and otherassembly-line industries. AK Steel, Middletown's biggest employer with 4,000local workers, is the steel industry's most profitable producer. More than adozen factories chug away in the unglitzy business of making corrugated boxes,industrial toilet paper and other paper goods.

 �There are a lot of businessesin Middletown that don't get a lot of play,�said Larry W

Jobs abundant

 If there's anythingwrong with being a factory town in 2001, it isn't readily discernible.

 The unemployment ratefor the Hamilton-Middletown market was a nearly invisible 3.3 percent inAugust, a big improvement over the 7 percent of 1993. Plant workers at AK Steelearn an average of $60,000 a year. AK's Web site advertises jobs starting at$45,000 with all the benefits one would expect of a Fortune 500 company.

 Middletown has come along way in toning down its blue-collar image. With its borders now stretchingto I-75 and into Warren County, the economy includes a greater base ofretailing, service industries and construction.

 As of August, 16.7percent of Middletown-Hamilton's nonagricultural work force toiled inmanufacturing, down from 20 percent in 1993, according to the U.S. Bureau ofLabor Statistics. At the same time, manufacturing accounted for 18.6 percent ofthe state's work force, 19.1 percent of Dayton-Springfield's. Cincinnati was at15.3 percent.

 City income taxcollections also shed light on the shift away from manufacturing. Business andindustry contributed 7 percent of income tax receipts in 2000, down from 11.6percent in 1989. The rest comes from individuals and sole proprietorships.

 Andy Haney, presidentof Local 2258 of the International Brotherhood of Electrical Workers, said theSquare D closing will send even more residents out of town for work.

 �I would say that's going tohappen because Middletown is not really that big a place,� Mr. Haney said. �Other than AK Steel, it'sgoing to be hard to find a job in town right now with the kind of wages andbenefits we make here.�

 Hourly workers atSquare D earn an average of $35,000 to $40,000 a year, he said, and about threequarters of them live in the city. For every worker who finds employment wherethe local income tax rate is the same or higher, Middletown will lose a trickleof revenue.

Two Middletowns

 Middletown's growthto the east and I-75, meantime, has essentially created two Middletowns, onewith the factories and dormant downtown, the other with the mall, restaurantsand middle-class subdivisions. The differences will be even more pronounced ina matter of years.

 Both Bishop FenwickHigh School and Middletown Regional Hospital plan to relocate toward the I-75corridor. The moves would boost Fenwick's draw as a regional school and enhancethe 310-bed hospital's ability to serve a broader market.

 �The population outside ofMiddletown proper has been growing at double-digit rates,� said Larry James, vicepresident and chief marketing officer for Middletown Regional Health Systems. �We want to make ourselvesmore accessible as possible to patients from those areas.�

 With the hospitalalone spending $125 million and moving 1,500 employees, the city aims to movein lock step. Plans call for the annexation of nearly 400 acres near I-75,including what would become the hospital and Fenwick sites.

 Somehow, downtownboosters are optimistic.

 Central Avenue, thetown's historic shopping venue, is being disinterred from a mall structure thatentombed the street in 1973. A commercial disappointment, the City Centre mallwound up costing the city $500,000 a year to heat and cool. The price tag torenovate the four-block downtown sector: $13 million.

 Earl Back, a retirediron worker who has lived 60 years in Middletown, is skeptical that downtownwill ever amount to much. So is Mr. Ligon, the service-station owner. To him,the abandoned Sorg Paper plant is a huge liability.

 �They need to tear it down andput a casino in there,�Mr. Ligon said.

Leaving the past

 Like many Rust Beltburgs, Middletown is learning how to wean itself of old, patriarchalindustries.

 For about a century,the city practically owed its existence to the factories who employed itsablest men and created a flotilla of local contractors and suppliers.

 Paul Sorg, one of therichest men in America in the late 1800s, was Middletown's biggest employer andbenefactor as the owner of a tobacco plant, the paper mill and a hotel. He alsobuilt the city's opera house, where locals can treat themselves to classicssuch as Babes in Toyland and Bizet's Carmen. Sorg's 35-room Romanesque mansionstill anchors a row of elegant Victorian homes.

 George Verity took itto the next level. His American Rolling Mill Co. began steel-making operationsin 1901 and made the city a nucleus of world trade. Armco helped bankroll theconstruction of public buildings, schools, parks, swimming pools and communitycenters. It sponsored countless events and civic initiatives.

 In 1961, Armcoemployed more than 50,000 people in 139 countries. In Middletown, its payrollapproached 8,000. To many generations, it was said, Middletown was Armco.

 �You name anything in town,and Armco and its employees had something to do with it,� said Mr. Sennet, the city councilman. �You wanted to get a schoollevy passed, they'd get the troops out. They built the Armco Recreation Centerin the south end of town. They had a hand in expanding the hospital. They saton boards. Every group that was worth anything in town was created by Armco.�

 Today, therelationship between the city and the company is more arm's length.

 Through a series ofownership changes, Armco became AK Steel. Maintaining an active philanthropy,AK accounts for about $500,000 in corporate and employee United Way givingevery year and it pledged $500,000 to Middletown Regional Hospital last yearfor a cardiac emergency room. It threw a 100th anniversary party for 40,000people last year. It committed $250,000 toward the construction of soccerfields and other facilities at Jacot Park.

Not company town

 But industrialleadership and profitability �and pleasing shareholders �are what make AK tick.

 �We recognize as the largestemployer in town that we play an important role in the economic engine of thearea,� said AK spokesmanAlan McCoy. �We chooseto play an appropriate role in civic direction. We're involved, but not hiredto drive. We don't intend to run this town; we intend to run this company.�

 AK Steel alsooperates in a much different regulatory environment than Armco did.

 A year ago, the U.S.Environmental Protection Agency filed suit against AK Steel, accusing it ofair, water and solid-waste pollution. It didn't come as news to residents ofthe Oneida neighborhood on AK's southern perimeter. They say soot from AKsmokestacks coats their cars and homes. Not only that, they say, it stinks.

 �The siding on my home ispractically ruined,�said Raymond Agee, a retiree who lives on Navaho Street. "I've taken towashing it by hand with an SOS pad. You can't just take a hose and wash it off.I was raised in this neighborhood, and it was never this bad.�

 Clark Thompson, whosehouse on Seneca Street is less than a mile from the nearest AK mill, said hewears a respirator when he mows his lawn or blows leaves. He said hisair-conditioning intake filters are black.

 �Basically, if you live in oraround AK you expect some odors, some minor fallout or soot, but it's clearlygotten increasingly unbearable in the past five years,� said Mr. Thompson, general manager of aspecialty machine company in Middletown. �Peoplein Middletown realize that AK Steel is vital and don't want it to suffer, butthey have to be held accountable.�

 AK asserts that, ifanything, it has eliminated emissions substantially over the years. If thecourt sides with the EPA, the company could have to pay million of dollars infines. Either way, the government is getting stricter in governing steel millpollution, and AK Steel is looking at spending $80 million to comply.

 Mr. Wood, of theMiddletown Economic Development Corp., said he knows of no instances ofcompanies spurning Middletown because of foul air. Still, in the organization'spromotional brochure, little mention is made of the town's lifeline from steel.The brochure contains not a single picture of the sprawling AK Steel plant.

 It also sidesteps thecity's underperforming public schools and nagging crime rate.

 According to the OhioDepartment of Education, Middletown schools failed to reach the bar on 17 ofthe state's 27 performance standards in the 1999-2000 school year, mostlyproficiency test scores. Meanwhile, FBI statistics show the city racked up 64.3serious crimes per 1,000 residents in 1999, or 50 percent higher than the urbanOhio and national average, yet lower than Hamilton's 78.3 per 1,000 andDayton's 95.1 per 1,000.

On the upswing

 But city eldersbelieve Middletown's fortunes are on the upswing. Sam Ashworth, executivedirector of the Middletown Historical Society, said he would like to see thecity use its industrial heritage as a springboard to the future.

 "I think � and I hope � that the future brings somehigher-tech sort of organizations to the area,�Mr. Ashworth said. �Ican see that happening with Butler County and I do think that Middletown is ina good position for that.�

 Seizing on the city'sgeography, Mr. Wood has resorted to pillaging companies from Cincinnati andDayton. His agency's radio spots, touting Middletown as �the heart of Southwest Ohio,� beckon on stations in thosecities.

 �We're sitting in the middleof 2.8 million people, and there are businesses that can strategically servetheir customers better from here,�Mr. Wood said.

 Several companieshave made the move, he said. One was Terminix International, which closedoffices in Cincinnati and Dayton and consolidated its 60 employees inMiddletown, said branch manager David Joles. The company provides commercialpest control in a 120-mile area from Northern Kentucky to Wapakoneta, Ohio.

Subdivisions appear

 Home buyers are buyinginto the concept, too. Along I-75 on Middletown's amoeba-like eastern edge,subdivisions are springing up on what used to be farmland. Homes priced at$200,000 are marketed to urban professionals who want more space.

 �Middletown's greatest assetis its location,� saidJohn Sawyer, a home builder and owner of Sawyer Realtors in Middletown. �The wife might work in Daytonand the husband in Cincinnati. You can be in Fountain Square in 40 minutes fromMiddletown, easy.�

 New residents might besurprised by the amenities of their new home. Middletown has a symphonyorchestra and a fine arts center, a championship golf course and a branchcampus of Miami University. On the first weekend of October, it again hostedits Middfest International, a celebration of the culture and food of adifferent country every year, this time that of Greece.

�Thereare still people in Cincinnati and Dayton who perceive us as being a grimy andindustrial town,� Mr.Sawyer said. �It isn't.�