Steel Magnolia

HOW BETHLEHEM TRANSFORMED from its second-verse position in “Allentown,” Billy Joel’s doleful anthem of industrial decline, to an emerging haven for the supple Lululemon crowd is a complex tale. Fully told, it would include huge international economic trends, small-town politics, shifting demographics, elaborate state tax incentive programs, the rise of high tech and e-commerce, clashing egos and old-fashioned avarice. Plus a little dash of coincidence.

Bethlehem Steel had long played a patriarchal role in its home city, packing local government with approved operatives and simply paying for amenities it desired. (Golf courses were a favorite; the longtime chairman loved to golf.) Even in its death throes, the company created a master plan to rehabilitate the former plant site and performed some important cleanup work. It proposed a $400 million Rouse-ian Inner Harbor-like festival marketplace anchored by a tourist magnet called the National Museum of Industrial History — Disney meets dynamos. Seemingly without irony, Steel called the idea “Bethlehem Works.”

After the bankruptcy, The Steel’s non-working Bethlehem assets ended up in the hands of a corporate scrap collector named Wilbur Ross, who wanted to unload that giant shuttered plant site. The key 139-acre parcel was purchased by new owners who talked of a redevelopment plan not radically different from what Steel had proposed.

Replacing manufacturing with gambling had become a possibility a few months earlier after a claque of state legislators produced Pennsylvania’s now-infamous July Fourth midnight casino legislation. It became very obvious, very quickly, that Bethlehem would be a strong candidate for one of the first round of casino licenses, since redevelopment and urban renewal were prime criteria in the selection process. And someone among the new owners had a connection to Sheldon Adelson, the billionaire who has built casinos in places like Macao and Singapore and Las Vegas, owned by the Las Vegas Sands Corporation.

“Our company came in,” says Sands Bethlehem president Robert DeSalvio, “with the premise that if we were going to open a casino operation in the state of Pennsylvania, we wanted it to be in the Lehigh Valley. Philadelphia’s a great location. But there was going to be competition there. This area is so close to New York and North Jersey, it made sense to go it alone in the Lehigh Valley.”

DeSalvio is a friendly guy with an uncanny ability to sound frank while staying safely on point. Asked about the seemingly unlikely premise of building a destination resort casino on a former iron-ore pit on one of the largest EPA-designated brownfield sites in the country, he nonchalantly shifts to message: “This was really something more than a casino project. We became the stewards of a site that has a tremendous legacy. The basic story here is the building and defending of America, a story that goes back well over a hundred years. … Talk about a script with a beginning, middle and — who knows where the end goes?”

It almost never began. Perhaps predictably, there was a tough and often bitter fight in Bethlehem over whether a casino was the best steward for the Steel site. (John Callahan vividly remembers his favorite high-school teacher lacerating him in a public meeting for his pro-casino position.) A crucial city council vote for new local zoning to allow a casino passed by only one vote, four to three.

In the five years since the Sands Bethlehem opened, with a newly built 145,000-square-foot casino floor that DeSalvio describes as “stylized industrial,” more than 30 million visitors have come to Bethlehem, leaving behind $1.5 billion. Casino employment now stands at 2,200, with another 800 people working at partnered establishments like the small mall of 25 high-end outlet stores, the 300-room hotel, and an events center that presents 100 concerts a year programmed by Live Nation, from Incubus to the Backstreet Boys.

The minimum starting wage for hourly casino workers is $10, plus benefits that kick in at 30-hour weeks. The average salary is $38,600, and some dealers, who receive tips, can earn several thousand more. By contrast, in the last days of Steel production a top plant worker could earn $60,000 in 1990s dollars, with full benefits. But it’s a new day.

It’s very difficult to quantify how much casino money drips into the local host community. But it’s easy to quantify a figure that is really rebuilding the old Steel site: the property tax dollars paid by the Sands, an estimated $11 million a year. Most of that money doesn’t end up in the city’s general fund (an annual state-mandated site fee of $9.5 million does), but rather is circulated back through a redevelopment authority to pay for more infrastructure improvements on the Steel site. The television studios and arts center couldn’t have been built without it.