Developing an economic powerhouse
The untold story about 1,000 acres of the former Bethlehem Steel property
When people think of south Bethlehem today — specifically the land once owned by Bethlehem Steel Corp. — thoughts invariably turn to entertainment.
People flock to ArtsQuest, the Wind Creek Bethlehem casino, an adjacent events center, hotel and retailers.
An industrial history museum and a Northampton Community College branch campus also have contributed to the transformation of about 200 acres between East Third Street and the Lehigh River — beneath the remnants of Bethlehem Steel’s giant blast furnaces — a destination site for people in the Lehigh Valley and beyond.
But an untold story, at least an undertold story, is the much larger, 1,600-acre portion of former Bethlehem Steel land, east of the Minsi Trail Bridge and along East Fourth Street and Route 412. It has become a giant economic engine that was resurrected from a brownfield site before the term “economic stimulus package” became politically fashionable.
“What has happened today is simply outstanding, and there is much more that is possible,” said Curtis “Hank” Barnette, the former Bethlehem Steel chairman who has remained in the Lehigh Valley.
Twenty years ago this month, Lehigh Valley Industrial Park Inc. began the groundwork for what has become LVIP VII — 1,000
acres of development. Once part of the massive, 4.5-mile Bethlehem Steel campus, LVIP VII today has 32 business tenants employing some 4,200 workers. The remaining portion, owned by Majestic Realty, houses giant warehouse operations that include Walmart.com and QVC.
The 20 years spent building LVIP VII, according to proponents, highlight an amazing accomplishment of infrastructure, marketing and more. The work is the culmination of a public-private partnership involving executives from Bethlehem Steel and its successors, businesses, local, state and federal officials, and perhaps most importantly, a nonprofit in LVIP. Its name, Bethlehem Commerce Center, remains today.
Together, they quietly and singlehandedly saved the city from the brink of financial ruin.
When Bethlehem Steel went bankrupt and died, local and statewide leaders were faced with an enormous challenge: How does a community take nearly 20% of a city’s land and revitalize it?
How does it replace such a significant job provider and tax revenue producer?
“When I heard they had closed Bethlehem Steel, I thought, ‘How do you do that? What do you do when it’s in the middle of a town?’ ” asked June West, a University of Virginia business professor who uses the Bethlehem Steel transformation as a lesson in brownfield redevelopment.
In an era when the Lehigh Valley has drawn national attention for its staggering growth in e-commerce warehousing, LVIP VII is showing how it’s possible to reclaim the land for a project that benefits the regional economy.
What follows is the story of how LVIP VII went from brownfield to business park, based on excerpts of interviews from key players who lived through it.
The prime mover: LVIP
Kerry A. Wrobel joined LVIP on June 4, 2001. A week later, Bethlehem Steel contacted the nonprofit about developing 300 acres along Route 412.
Former Bethlehem Steel executives, including Barnette, had a vision to preserve the company’s historical importance with a National Museum of Industrial History. But that was a very small piece, and the challenge of redeveloping 1,600 acres of the site was the ultimate goal.
As a result, Bethlehem’s elected officials approved a favorable zoning designation to help encourage development, and state lawmakers, though not with Bethlehem Steel specifically in mind, passed legislation making it easier to put “brownfields” back into productive use.
Enter LVIP, a nonprofit formed ironically enough during a difficult period of several labor strikes that hit the steel industry, including Bethlehem. The Bethlehem Chamber of Commerce in May 1959 created Lehigh Valley Industrial Park Inc., which then opened its first park on about 225 acres north of Route 22 off Schoenersville Road.
LVIP eventually built six business parks — all on undeveloped, or “greenfield” land in Lehigh and Northampton counties.
This project — turning a brownfield into a revenue- and tax-generator — was starkly different, said Wrobel during a recent tour of LVIP VII. Not only did it involve demolishing buildings and cleaning up contaminated ground, Bethlehem Steel eventually would file for Chapter 11 bankruptcy protection, leading to a successor company, International Steel Group, or ISG, to follow through on company officials’ pledges.
“There was certainly initial apprehension,” Wrobel, now LVIP’s president and chief executive officer. “Would businesses that had alternative options relocate onto a brownfield site?”
First tenant, first private developer
Larry Alderfer doesn’t mince words. “We’re here to feed the nation, not get accolades,” said Alderfer, president of United States Cold Storage, which operates a refrigerated warehouse in south Bethlehem.
But how it got there is possibly a microcosm of the massive LVIP VII project.
Cold Storage, based in Camden, New Jersey, was looking to gain a foothold in the Northeast when a company official heard of the redevelopment plans. The company became the first tenant of LVIP VII, opening in 2005, drawn there by the proximity to railroads and major highways.
Alderfer was the first employee of Cold Storage at LVIP VII, and it has since grown to about 200 workers.
“We were able to do that because of LVIP and Kerry’s work, and the state of Pennsylvania,” Alderfer said.
For example, improvements to Emery Street, where Cold Storage is located, had not received approvals but needed to be completed before the company could open, he said.
“If not for [Wrobel] specifically, it wouldn’t have happened,” he said. “He made it happen.”
Meanwhile, Jim Petrucci, a New Jersey developer who had been drawn to the Lehigh Valley through other LVIP business parks, was attracted to LVIP VII. His entry in the late 1980s coincided about the time workers were completing the so-called, 34-mile “missing link” of Interstate 78 through the Lehigh Valley.
“One of our specialties is brownfields, and LVIP VII is the mother of all brownfield sites,” said Petrucci, CEO and founder of J.G. Petrucci Co. He has developed about a dozen parcels on the site, with businesses lured to the park, he said, because of the proximity to I-78, leading to New York City and other Northeast cities.
“And there’s history,” Petrucci said of Bethlehem Steel’s flagship mill, which forged gun barrels for battleships and steel girders for bridges and skyscrapers. “It wasn’t that there was just a dirty site; you could make a case that it made an oversized impact on our World War II fortunes, and it was really wrapped around the community identity in the Lehigh Valley.”
Mayors’ support
Three mayors served Bethlehem since the start of LVIP VII, and all played a role in the rebirth.
“I always felt the real story was the other 1,600 acres [including LVIP]… and how the tax base has shored up Bethlehem’s budget,” said Don Cunningham, the city’s mayor from 1998 to 2004 and now president and CEO of Lehigh Valley Economic Development Corp. “Everybody talks about the [Wind Creek] casino host fees, which are significant, but if Bethlehem hadn’t redeveloped the 1,600 acres, the city and school district budgets would have been in a bad way.”
Scott Dunkelberger, a retired top administrator with the Pennsylvania Department of Community and Economic Development, recalled there was no road map on how to redevelop brownfield sites a generation ago, and for-profit developers then saw them as providing low return on their investment.
“Everybody recognizes you’re not only removing the blight that’s a constant reminder of a steel mill disappearing, but it’s to create a new opportunity of rebirth,” Dunkelberger said. “They were risking their whole existence with everything they accomplished in the previous six parks. To see it now, it’s just amazing to me. It’s great stuff.”
Robert Donchez, whose final term as mayor will expire in January and who previously served 18 years on City Council, said the city faced challenging times financially.
“But when you look at it today, [Barnette] deserves a lot of credit,” Donchez said. “He could have put a fence up . ... They spent more than $100 million tearing down, demolishing buildings, trying to clean up the site. He’s always been committed to Bethlehem, but Steel was not a developer. And LVIP has done a good job.”
Opposition to costs, traffic
Not everything went smoothly, however, and some people thought the site could never be developed, given its size and environmental challenges, Barnette said.
“It proved to be just the contrary,” he said.
LVIP, with help from city, state and federal agencies, overcame obstacles such as environmental remediation. Others were concerned about the cost overhauling the roads to accommodate increased traffic.
For example, Northampton County Republicans and a group of taxpayers opposed then-Democratic Executive Glenn Reibman’s $111 million bond in 2000 that included $13 million earmarked for the construction of Commerce Center Boulevard at the industrial park.
During Bethlehem Steel’s operating days, the road network was
rudimentary at best, and remaking the land into a business park required a major upgrade, proponents argued.
“I had a concern about the county going so far in debt with the $111 million bond issue,” said J. Michael Dowd, a Republican who was early into his first term on council. Dowd later changed his vote.
“The more I thought about it, I looked at the opportunity,” he said. “What would have happened to Bethlehem Steel land if Northampton County had not made the investment?”
Bernie O’Hare, a Nazareth blogger, was among the taxpayers who led an unsuccessful lawsuit against the bond issue, arguing that public money shouldn’t be used for private purposes.
“Did it generate jobs?” O’Hare asked. “Eventually, after a very, very long period of time. Was it worth the investment? I’d say no.”
But those benefits are now being realized, Reibman said.
“I always consider Commerce Center Boulevard the greatest economic development project in the Lehigh Valley. And we said it would take about 20 years [for the benefits of LVIP VII],” Reibman said.
While one road — a major spine route inside LVIP VII that provides access to nearly all the businesses — created political controversy, leaders of two adjacent communities remain concerned about other streets.
Priscilla deLeon, a longtime Lower Saucon Township council member who is not seeking reelection this year, and Cathy Hartranft, manager of Hellertown, said trucks traveling in the area of the I-78 interchange sometime make their way along their streets.
“Overall LVIP VII has been a good neighbor,” Hartranft
said. “Some of our residents are employed at the various warehouses and many of the employees visit our local businesses. What we do deal with on a regular basis is tractor-trailers finding their way into our local roads, then not being able to maneuver. Somehow they make it into the borough.”
Other trucks that exit LVIP VII on Easton Road have caused concern among residents, deLeon said.
Wrobel said LVIP officials believe the traffic generated by the companies using Easton Road is “minimal.” He also said residents and municipal officials assumed early in the planning stages with Bethlehem Steel officials that there would be no traffic
on Easton Road.
Former Mayor John Callahan (2004-14) said today’s traffic pales in comparison with the past, when Route 412 was a two-lane road versus the fourlane highway expansion it underwent from I-78 heading into Bethlehem.
Common knowledge?
Most people might not know that Bethlehem Steel’s successor wanted LVIP to take over all its property, including the Martin Tower headquarters opened in 1972. The iconic, 21-story structure along Route 378 was imploded May 19, 2019.
It was a brief conversation, Wrobel recalled, with ISG leading the pitch to him and other officials, including Jeffrey P. Feather, who was then-LVIP chairperson.
“It was, ‘OK, Bethlehem Steel just doesn’t own 1,000 acres ... it would be great if we could get this to one person who would be responsible for these properties,’ ” Wrobel said.
LVIP officials demurred.
“We were like, it’s bold of us to look at 1,000 acres,” Wrobel said. “We know industrial parks; we know we can take the Bethlehem Commerce Center and create a world-class industrial park. We don’t have experience with large office towers. So we declined.”
Feather remembered the ISG negotiator telling Scott V. Fainor, then a LVIP board member and a bank executive, that Martin Tower would make an impressive bank headquarters.
“You need a big dog house if you want to run with the big dogs,” Feather recalled the negotiator telling Fainor.
The future
What’s next for LVIP VII? Wrobel said its board wants to develop the south side of Route 412. Wrobel sees a mix of commercial and retail development, though prospects have slowed since the pandemic.
Feather, now a board member, said the Route 412 project “will be done tastefully” with a goal of securing leases to provide LVIP with income. Elsewhere along Route 412, a planned Walmart supercenter inside Commerce Center Boulevard abruptly got canceled in 2017. But a Wawa convenience store has received city planning commission approval to be built on nearly 2 acres along Route 412 occupied by the shuttered Chris’s Restaurant, a former hot spot for dining by steelworkers.
With net assets of about $38 million — cash and land — according to its most recent IRS reporting form, anything is seemingly possible for the industrial park board, a group of more than two dozen business, government and community leaders who guide the direction of the privately run nonprofit.
“LVIP VII was a great project for us,” said Michael J. Gausling, the current chairperson, noting the organization had $3.8 million in net assets around 2001. “We hope to continue to do difficult projects that bring manufacturers and jobs.”
Wrobel said LVIP’s office building and a flex industrial building — both on LVIP VII — make up about one-third of its net worth.
Some tenants are expanding, including Reeb Millwork, a longtime distributor of building materials, Cigars International, and Ecopax, which makes recyclable products used by the food industry.
Another tenant, Bowery Farming, an indoor, vertical farming company, is scheduled to move into LVIP VII in about six months. “Our latest project might be the punctuation of LVIP VII,” Petrucci said of Bowery Farms.
“Now we are going to be growing vegetables,” he said, on land where I-beams and other structural steel products were once forged.