A City Built on Steel Tries to Reverse Its Decline

A City Built on Steel Tries to Reverse Its Decline

Gary, Indiana, was once a symbol of American innovation. Home to the largest U.S. Steel plant, Gary produced the product that built America's bridges, tunnels and skyscrapers. The city reaped the rewards with a prosperous downtown and vibrant neighborhoods.

Gary's smokestacks are still clearly visible on the sandy shores of Lake Michigan, contrasted sharply between the eroding dunes and the towering silhouette of Chicago to the northwest. But now they represent a city looking for a new beginning.

More than 10,000 buildings stand abandoned and the population of 180,000 in the 1960s has fallen by more than half. Poverty, crime and an ignoble nickname – “Scary Gary” – deter private investors and potential homeowners.

As US Steel finds itself at a crossroads – a proposed takeover would bring the company under foreign control – the city named after the company's founder and helped build his empire is also at a crossroads. A new mayor and planned revitalization projects have rekindled hope that Gary can create an economic future beyond steel, the kind of renaissance that many Midwestern industrial towns have achieved.

Theoretically, the potential is there. Gary is located in the third largest metropolitan area in the country, right next to major railroad crossings and next to a shipping port. Indiana Dunes National Park is a popular destination for park lovers and curious drivers.

“We have the recipe for success,” said Eddie Melton, the newly elected mayor. “We need to change the narrative and make it clear to the world that Gary is open for business.”

A minor league stadium and casino are among the construction projects that city officials are calling success stories. But they failed to produce the lasting economic spillover effects they had hoped for, said James B. Lane, a history professor at Indiana University Northwest and a Gary historian.

“The problem with all of these projects is that they have had no multiplier effect on the surrounding businesses and businesses,” said Dr. Lane.

Other efforts failed. The city agreed to sell its convention center to a technology company that promised thousands of jobs, but later sued the company after the company defaulted on its contracts. A multibillion-dollar plan to create a theme park that would capitalize on Gary's reputation as the birthplace of the Jackson Five was foiled in the 1990s.

“We certainly missed the opportunity to make it a Dollywood, a Graceland,” said Chuck Hughes, president of the Gary Chamber of Commerce.

US Steel's presence in Gary has declined sharply. Gary Works, US Steel's largest plant, employs about 3,700 people, down from more than 30,000 at its peak. However, local businesses still rely on the economic activity of the plant, which remains one of the city's top employers.

One such business is Great Lakes Cafe, a restaurant located just outside Gary Works. Every morning, steelworkers in orange jumpsuits stop by the restaurant, which has signs expressing support for the United Steelworkers union, to enjoy plates of hash browns, biscuits and gravy before the start of their workday.

“We love US Steel,” said Cindy Klidaras, the owner of the restaurant, which opened in 1994.

Economic research does not point to a clear solution to Gary's regeneration, but suggests crucial elements such as investing in infrastructure and improving the city's physical attractiveness as a place to live.

Mr Melton's election was hailed by many as a new step. Kia Smith, a small business owner who has lived in Gary her entire life, said the mayor's focus on transparency is a positive sign for the economy in a place that has long struggled with corruption. Ms. Smith, whose grandfather worked in the steel mill, said the city needs to diversify its economy beyond the steel industry.

“No one owns Gary,” said Ms. Smith, 43, who owns and operates a health food store and a catering business. “We all own Gary.”

Beautification and restoration efforts are underway. Mr. Melton's government has begun demolishing old buildings to attract developers who can build new apartments and other buildings on the many vacant lots. One idea is to make Gary a viable alternative to Chicago, where rents have skyrocketed. Jim Wiseman, a lifelong resident who has worked in local construction for more than 40 years, said his company has begun working with the new administration and recently demolished 15 buildings.

Mr. Wiseman's own childhood home in the hard-hit Aetna neighborhood is also scheduled to be demolished. “Demolition is a way to change the community forever,” he said. “I hope to see a renaissance of new growth and housing for the community as we change things for the better.”

The South Shore Line, a commuter rail line connecting Chicago with cities in northwest Indiana, is set to open a second rail line between Gary and Michigan City to the east. Gary/Chicago International Airport received $6 million in federal funding and expanded its cargo capacity in 2023, aiming to serve as a logistics hub for tenants such as United Parcel Service. In December, Gov. Eric Holcomb announced a $127 million grant to improve Interstates 80 and 94, which pass through Gary, using funding from the bipartisan infrastructure bill.

Nevertheless, the challenges are great.

Kamal Minkah grew up in Gary and knew the city as a thriving city. Things began to change in the late 1960s, when many white residents left the company, and continued with the first mass layoffs at Gary Works in the early 1970s.

Mr. Minkah joined the Air Force in 1980 and returned in 1991. Gary was unrecognizable.

“It was like a feeling of emptiness,” said Mr. Minkah, 60. “It's like the city just collapsed.”

Today, Mr. Minkah is a police officer assigned to Gary's school system and runs a karate teaching school. He cited Gary's proximity to Chicago and low housing costs as selling points.

Another difficulty is political isolation. Gary's demographics—the city is more than 80 percent black and heavily Democratic—is at odds with Indiana's majority-Republican legislature. Lawmakers have blocked initiatives that would have allowed Gary to expand his tax base and offered him little state funding, citing concerns about corruption. At the same time, the Illinois government had little incentive to better connect Chicago to a city in Indiana.

Paul Helmke, the former Republican mayor of Fort Wayne, said a quirk of the Indiana state tax code helped his city, but not Gary, recover from the decline of the manufacturing sector. Gary was a smaller, majority-Democratic city within its larger, more conservative county, which used Indiana law to control its ability to manage its taxes. The tax base could not be increased without the county's approval.

“Gary was caught up in what the other towns in his county wanted to do,” Mr. Helmke said.

Other cities offer contrasts and possible lessons.

About 450 miles southeast, Pittsburgh's steel heritage remains a central part of its identity, even as the city bears little resemblance to its heavy industrial days. Chic bars, co-working spaces and university hospitals are located where steel mills once lit up the night sky.

Unlike Pittsburgh, Gary does not have a major research university, which is a key driver of economic change. Mr. Melton said his administration has worked closely with Detroit's mayor to understand how that city has worked to revive its economy after losing much of the country's automobile production.

A useful template for Gary could be Erie, Pennsylvania, said John Lettieri, co-founder of the Economic Innovation Group, a nonprofit research organization. Like Gary, Erie relied heavily on manufacturing—and suffered as those jobs moved offshore. But a combination of business and political leadership and investment from one of the city's largest employers, Erie Insurance Group, led to a significant turnaround.

There, Erie Insurance worked with a cadre of local business owners, development organizations and others to revitalize the waterfront, investing $50 million with outside partners in 2020. This project was spurred by a federal program that provides tax breaks for development in distressed areas. The company also added a $147 million building to its campus in 2021.

More important to Gary, Mr. Lettieri said, is the continued focus on making the city safe and livable. “With population decline and high crime, these are fundamental issues that the public sector needs to address first before the private sector joins in,” he said.

Although Gary has long been associated with decline, the residents who remain, white and black alike, see an opportunity for renewal.

Mr. Wiseman is one of the hopefuls. His mother worked in the steel mill in the 1940s and 1950s and felt loyal to the city. She remained there as many other whites left the city, an exodus that occurred around the election in 1967 of Richard G. Hatcher, one of the first black mayors of a major American city. Before she died, she made her son promise to help bring Gary back to where he was: a place where people want to live.

“It is my absolute dream to see Gary succeed again in my life,” said Mr. Wiseman.