Region’s future brighter than dim New York Times portrayal

An Economic Scene column in Tuesday’s edition of The New York Times, “Why Big Cities Thrive and Smaller Ones are Being Left Behind,” led with the Steubenville-Weirton area as the example of small cities that have failed to recover quickly from the Great Recession.

Local business and economic development leaders were incensed by the choice of the area as the lead for a column based mainly on statistics found in a Brookings Institution report suggesting small cities cannot recover for a variety of reasons. The column, by Eduardo Porter, a well-known journalist, author and lecturer, was based on research by Mark Muro of the Brookings Institution’s Metropolitan Policy Program. Brookings is a Washington-based think tank.

The column led into the research with a depiction of the Steubenville-Weirton area as a dismal former coal and steel town that is ill-suited to thrive or recover, then went on to outline several reasons the nation’s small cities won’t recover, including a lack of a depth of the talents needed in today’s economy, a lack of size that creates inefficiency, a lack of job opportunities and low wages. The article concluded saying that “the future for small-city America looks dim. Perhaps the best policy would be to help them move to a big city nearby.”

The narrow academic terms fail to give credence to any local signs of the future economy, including a big one right across Main Street in Weirton from those long-cold blast furnaces in the column’s featured photo -- the investment by Bidell Gas Compression of Canada in the repurposing of the 100,000-square-foot machine shop that formerly served the mill. The $4 million investment will include 60 jobs to start with as many as 40 more to come.

The pictures and words also failed to note the blast furnaces and the basic oxygen plant (in the background of a dismal shot of Weirton’s extreme North End, not downtown) are being torn down for future economic redevelopment.

The column further states that areas such as Steubenville-Weirton voted for President Trump out of frustration, which is not good policy. It points out geographic inequality as the latest divisive phenomenon in the economy.

Steubenville Mayor Domenick Mucci was instrumental as executive director of the Jefferson County Regional Planning Commission at obtaining brownfield reclamation grants to clean environmentally compromised former industrial sites and prepare them for re-use. He said while statistics can lead the writer to his conclusions, they ignore the investments in brownfield rehabilitation, redevelopment, job retention and job retraining being done in the area.

“We recognize those challenges ahead of us, but just looking at the economy and reaching the conclusion to simply say smaller cities throughout the U.S. should be written off and join larger cities is ludicrous, and I don’t agree with that philosophy,” said Mucci, who is concluding nearly 40 years as an elected Steubenville city official this year. “We have a proud tradition and history here and we continue to look for economic opportunities.”

Brenda Mull, president of the Weirton Area Chamber of Commerce, was angered.

“I am puzzled why the New York Times continually wants to make Weirton its poster child,” she said. “We have had a decline, as have other small cities across the country. But why not mention the upside: The new businesses like Bidell Gas Compression from Canada or Pietro Fiorentini from Italy that looked at Weirton as the place they knew they could thrive in and have set up shop here.

“We do have growth here. Some journalists just choose not to notice,” she said.

Evan Scurti, executive director of the Jefferson County Port Authority, also was perplexed by the choice of Steubenville-Weirton.

“I get it. He is citing statistics. What he is missing is the strong interest and what is in the pipeline right now. Sure, there has been decline and lost jobs with the decline of industries like steel and coal. But, we’ve had several recently announced projects and recently purchased properties that aren’t reflected in those statistics,” Scurti said.

“It’s too bad that they look over middle America and don’t give us credit for who we are, trying to work together, especially as a metropolitan area. It’s two different states, but we work together on marketing and redevelopment initiatives.”

Scurti said the statistics in the story do not reflect the restart of part of the Mingo Junction steel plant, or investments being made in other former steel properties to put them to new uses, such as the former Yorkville Wheeling-Pitt facility.

He noted there are more than 70 new jobs at River Rail on the Ohio River at the former Weirton Steel site at Steubenville, and major investments have been made by the Franciscan University of Steubenville.

“Obviously, large metropolitan areas have more employers. There are plenty of ‘Steubenvilles’ around the country and they singled us out. We do have to work harder in some ways to prepare sites, but we are getting the investments. It’s very unfair,” Scurti said.

Tricia Maple, president of the Jefferson County Chamber of Commerce, said the photos accompanying the column are inaccurate and seem to have been selected to support the quotes and statistics the writer had put together.

“Of course, small-town America is suffering. Of course, Jefferson County, Steubenville and Weirton have challenges and almost daily setbacks, but to insinuate that we should pack up and move to the nearest metropolitan area is both insulting and angering,” Maple said. She noted the easy travel to larger metropolitan areas such as Pittsburgh, Chicago, Cleveland, Columbus and New York City -- “Yes, our residents do travel -- even by plane,” Maple said -- is a part of the attractiveness of the region.

“Business opportunities, jobs, culture, recreation and more are literally within a day’s drive. Shorter commutes, low crime, entrepreneurship, a low cost of living, community involvement and more make small-town America a choice for many and, make no mistake, we certainly do not feel ‘left behind,'” she continued.

In a radio interview after the article was published, Porter said that cities with good highway networks tying them to larger metropolitan areas will have a better opportunity in the long run.

Maple said, “his article reads like a college term paper and doesn’t capture even a shred of the human side of things.”

Pat Ford, executive director of the Business Development Corp. of the Northern Panhandle, notes that investment is coming domestically and from places including Japan, Canada and Italy.

Even steel has international local investment. In Mingo Junction, a firm from India has resumed operations of part of the former Wheeling-Pittsburgh steel mill. Japan’s Nisshin Steel has a plant dating to the 1980s in Follansbee. It is ArcelorMittal, a worldwide steel giant based in Luxembourg, that runs portions of the “ruins of the steel mill in Weirton, W.Va.,” as the Times said in a photo caption, producing tin with several hundred employees and making large swaths of the “ruins” available for the redevelopment effort.

Mingo Junction’s income tax revenue is up 10 percent this year so far, village officials reported in September.

“Don’t give me this stuff that we are inconsequential and we are dying. We are coming back, and we are coming back strong,” said Ford.

“We have had our tough spots and dips in unemployment, investment and job opportunities, but that is the natural ebb and flow of living in a capitalist society. We are back, and we have been back. We are one of the strongest Standard Metropolitan Statistical Areas in the country during the last seven years. We have seen $370 million in private investment, a growth of $100 million in payroll and we are on the cutting edge of the country in terms of repurposing brownfield sites,” Ford continued.

The U.S. Economic Development Administration has used the BDC’s efforts as an example in a training video for other areas.

The Times column failed to note the billions of dollars that are being invested in the wider region, with the Royal Dutch Shell ethane cracker at Monaca, less than a half hour north, and the potential PTT cracker in Belmont County, a 30-minute drive to the south, and the potential spinoff industries and jobs they will bring.

Ford, who worked in economic development for three Pittsburgh mayoral administrations before coming to the BDC in 2009, said the article indicated smaller cities are not able to respond as well as larger areas during periods of economic upheaval.

“The advantage we have is that there is a shorter ladder to decision makers. Someone like me has the phone number of the mayor and the county commissioners and the governor’s phone number and can call a U.S. senator. And that puts us two calls away from the president of the United States,” Ford said. “Because of our smallness, we can turn the ship on a dime. If a prospect wants to locate here, we can put together a team and implement policies and procedures and programs and training programs and put together incentive packages within days. To do so in a big city can require years of decisionmaking.”

Ed Looman of the Appalachian Partnership for Economic Growth noted his eight-county area has massive investments under way.

“I wonder why the national media seems so eager to fixate on us in our region and lead with Steubenville, Ohio, and not talk to anybody from Steubenville, Ohio. I don’t understand,” Looman said.

In the wider region, the investment totals in the billions:

• The Royal Dutch Shell cracker, Monaca, Pa., $8.7 billion.

• PTT Global Chemical Cracker, Dilles Bottom, $5.7 billion.

• A potential ethane storage hub for the region, $10 billion with WVU estimates that 100,000 permanent jobs and an additional $36 billion in investment could result.

• Southwestern Energy purchased Chesapeake Energy’s regional shale assets for $5.4 billion in 2015 and has deployed energy rigs to the region.

• Ergon has invested more than $125 million in improvements at its refinery in Newell.

• Three gas-fired power plants are planned in West Virginia and Ohio in the region with $1.8 billion in investment and 600 permanent jobs.

• Italy’s Pietro Fiorentini has broken ground on its first permanent manufacturing facility in the U.S. The $9 million facility will employ as many as 150.

Looman said, “We all realize that we’ve lost steel jobs, that the economy is not what it used to be, that the population is not what it used to be. That is not new to us. We are fighting through it,” he said. “There was no mention of some of the economic indicators you could look at that say, maybe, we’re not doing so bad. Municipal income taxes are performing better than in the past four or five years. Most of the cities and villages in our region have seen revenue increases recently, which tells you more are working than in years past. The other thing I see from reading the newspaper is our retail tax collections seem to be doing well in Jefferson County,” he said.

Looman said oil and gas has provided income to people holding leases and to local people who have found jobs, pointing to the expansion of firms such as MPW in Mingo Junction, which has added employees.

“It’s not huge numbers, but it is stable employment. Economic development people up and down the river are working very hard to get sites ready and the work force trained for what we anticipate will come when the (PTT Global) cracker is announced,” he said.

Economic development, he noted, isn’t an overnight process, nor is it fair to ignore nearby growth and development, such as the millions of dollars that are being invested in big facilities in Harrison, Carroll and Columbiana counties that are part of the shale boom, all of which are near enough to employ local residents.

“I don’t think we are as bad off as some folks want to make us out to be,” Looman said.

As for the column’s contention that small cities lack in depth and breadth of employable talent in today’s world, Ford had a ready counter. In a recent speech to construction trades representatives meeting in Wheeling, Ford said, “Two companies who have broken ground in Weirton have said it better than I could: Bidell Gas Compression, based in Canada, is working with our local high schools and local community college to establish a steady pipeline of manufacturing workers. The local labor force and training opportunities were drivers in the decision of Pietro Fiorentini to locate in Weirton.”

Ford noted while speaking that there is a high concentration of university and technical school systems, proven work force training and development programs are used to augment the existing labor supply’s skill sets, skilled labor is being attracted from outside the area and new talent is being attracted to industry clusters in the region.

While there were 20,000 people working in two large steel mills in the area a couple of decades ago, the area has been forced to diversify. Economic studies have shown the area best suited to not just steel but also energy, chemicals, transportation, logistics and health care. Ford noted that in those five areas alone, the area has seen $370 million in private investment during the past nine years.

“We are able to diversify that quickly. Our geographic lack of concentration has not been problematic. We use it to our advantage,” he said. Ford noted rail, river and road remain assets for transportation in the region.

He said while large cities might be statistically more productive, to a region like the Weirton-Steubenville Standard Metropolitan Statistical Area, $370 million is a significant investment, while it could be “a rounding error in a New York City budget.”

The federal government continues to invest in proven economic development strategies in the area, from $1.6 million in brownfield remediation grants to redevelop former factory sites and put them back on the tax rolls, to $300,000 released last week for a master plan for the redevelopment of the former Weirton Steel properties.

“People like Ergon do not make $100 million investments if there is not a labor force to support them. People from Japan and Canada and Italy do not make millions of dollars in investments in a community without a labor force,” Ford said.

At a roundtable discussion in Wheeling regarding preparing for the cracker plant in Belmont County, Ford noted the area nationally has the second-lowest overall employee turnnover rate, and the lowest in manufacturing, some 31 percent below the national average.

The concept that population is leaving smaller areas exclusively and that larger metropolitan areas are growing is not completely borne out by statistics.

According to Census Bureau figures, while the Steubenville-Weirton area lost 2,461 residents between 2010 and 2014 based on the number of deaths compared with the number of births, the labor force grew by 402 from August 2015 to August 2016. And, a net migration of 1,408 has occurred, according to the Census Bureau in figures provided by the Brooke-Hancock-Jefferson Metropolitan Planning Commission. The new residents have largely come from Pittsburgh, Cincinnati, the Youngstown area, the Washington, D.C., area and the Atlantic City, N.J., area. In addition, 123 have migrated from outside the U.S. to the three-county area.