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Oct. 15, 2001

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Sunday, October 14, 2001

Middletown finds its way

Industrial town grapples with change

By James McNair
The Cincinnati Enquirer

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

        What makes the scene so contradictory is that this is a Friday, not a Sunday. Banks, government offices and stores are open. But the real Main Street, with businesses teeming with customers, is 10 miles away — at the city's lone link to Interstate 75.

Employment facts

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

        “It's just something to get away from home,” he shrugged.

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

        The effort stems partly from the recognition that Middletown, perched squarely between Cincinnati and Dayton, has a future as a regional business hub and commuter haven. But there's another factor beyond the city's control: The continuing unraveling of its primordial manufacturing sector.

        In May 2000, Sorg Paper 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 the phased shutdown of its 101-year-old Middletown operations. And AK Steel — the successor to Middletown's longtime corporate benefactor, Armco — has said that a slumping steel market and new environmental-compliance mandates could force it to halt raw steel production and eliminate 2,000 local jobs.

        The upheaval in manufacturing goes back several decades and has made Middletown less self-contained and less certain of its identity. More and more, natives are going elsewhere for work.

        “The aim of most of my classmates in 1951 was to get a car and get a job at Armco,” said City Council member Fred Sennet. “But today, it's tough to keep a kid in town because there are fewer jobs in the steel mills and paper mills. It's tough to keep his parents in town.”

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

        “There are a lot of businesses in Middletown that don't get a lot of play,” said Larry W

Jobs abundant

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

        The unemployment rate for the Hamilton-Middletown market was a nearly invisible 3.3 percent in August, a big improvement over the 7 percent of 1993. Plant workers at AK Steel earn 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 a long way in toning down its blue-collar image. With its borders now stretching to I-75 and into Warren County, the economy includes a greater base of retailing, service industries and construction.

        As of August, 16.7 percent of Middletown-Hamilton's nonagricultural work force toiled in manufacturing, down from 20 percent in 1993, according to the U.S. Bureau of Labor Statistics. At the same time, manufacturing accounted for 18.6 percent of the state's work force, 19.1 percent of Dayton-Springfield's. Cincinnati was at 15.3 percent.

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

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

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

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

Two Middletowns

        Middletown's growth to the east and I-75, meantime, has essentially created two Middletowns, one with the factories and dormant downtown, the other with the mall, restaurants and middle-class subdivisions. The differences will be even more pronounced in a matter of years.

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

        “The population outside of Middletown proper has been growing at double-digit rates,” said Larry James, vice president and chief marketing officer for Middletown Regional Health Systems. “We want to make ourselves more accessible as possible to patients from those areas.”

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

        Somehow, downtown boosters are optimistic.

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

        Earl Back, a retired iron worker who has lived 60 years in Middletown, is skeptical that downtown will 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 and put a casino in there,” Mr. Ligon said.

Leaving the past

        Like many Rust Belt burgs, Middletown is learning how to wean itself of old, patriarchal industries.

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

        Paul Sorg, one of the richest men in America in the late 1800s, was Middletown's biggest employer and benefactor as the owner of a tobacco plant, the paper mill and a hotel. He also built the city's opera house, where locals can treat themselves to classics such as Babes in Toyland and Bizet's Carmen. Sorg's 35-room Romanesque mansion still anchors a row of elegant Victorian homes.

        George Verity took it to the next level. His American Rolling Mill Co. began steel-making operations in 1901 and made the city a nucleus of world trade. Armco helped bankroll the construction of public buildings, schools, parks, swimming pools and community centers. It sponsored countless events and civic initiatives.

        In 1961, Armco employed more than 50,000 people in 139 countries. In Middletown, its payroll approached 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 school levy passed, they'd get the troops out. They built the Armco Recreation Center in the south end of town. They had a hand in expanding the hospital. They sat on boards. Every group that was worth anything in town was created by Armco.”

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

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

Not company town

        But industrial leadership and profitability — and pleasing shareholders — are what make AK tick.

        “We recognize as the largest employer in town that we play an important role in the economic engine of the area,” said AK spokesman Alan McCoy. “We choose to play an appropriate role in civic direction. We're involved, but not hired to drive. We don't intend to run this town; we intend to run this company.”

        AK Steel also operates 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 of air, water and solid-waste pollution. It didn't come as news to residents of the Oneida neighborhood on AK's southern perimeter. They say soot from AK smokestacks coats their cars and homes. Not only that, they say, it stinks.

        “The siding on my home is practically ruined,” said Raymond Agee, a retiree who lives on Navaho Street. "I've taken to washing 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, whose house on Seneca Street is less than a mile from the nearest AK mill, said he wears a respirator when he mows his lawn or blows leaves. He said his air-conditioning intake filters are black.

        “Basically, if you live in or around AK you expect some odors, some minor fallout or soot, but it's clearly gotten increasingly unbearable in the past five years,” said Mr. Thompson, general manager of a specialty machine company in Middletown. “People in Middletown realize that AK Steel is vital and don't want it to suffer, but they have to be held accountable.”

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

        Mr. Wood, of the Middletown Economic Development Corp., said he knows of no instances of companies spurning Middletown because of foul air. Still, in the organization's promotional 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 the city's underperforming public schools and nagging crime rate.

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

On the upswing

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

        "I think — and I hope — that the future brings some higher-tech sort of organizations to the area,” Mr. Ashworth said. “I can see that happening with Butler County and I do think that Middletown is in a good position for that.”

        Seizing on the city's geography, Mr. Wood has resorted to pillaging companies from Cincinnati and Dayton. His agency's radio spots, touting Middletown as “the heart of Southwest Ohio,” beckon on stations in those cities.

        “We're sitting in the middle of 2.8 million people, and there are businesses that can strategically serve their customers better from here,” Mr. Wood said.

        Several companies have made the move, he said. One was Terminix International, which closed offices in Cincinnati and Dayton and consolidated its 60 employees in Middletown, said branch manager David Joles. The company provides commercial pest control in a 120-mile area from Northern Kentucky to Wapakoneta, Ohio.

Subdivisions appear

        Home buyers are buying into 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 asset is its location,” said John Sawyer, a home builder and owner of Sawyer Realtors in Middletown. “The wife might work in Dayton and the husband in Cincinnati. You can be in Fountain Square in 40 minutes from Middletown, easy.”

        New residents might be surprised by the amenities of their new home. Middletown has a symphony orchestra and a fine arts center, a championship golf course and a branch campus of Miami University. On the first weekend of October, it again hosted its Middfest International, a celebration of the culture and food of a different country every year, this time that of Greece.

        “There are still people in Cincinnati and Dayton who perceive us as being a grimy and industrial town,” Mr. Sawyer said. “It isn't.”


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Oct. 15, 2001
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