A City Built on Steel Tries to Reverse Its Decline

A City Built on Steel Tries to Reverse Its Decline

Gary, Ind., was once a symbol of American innovation. The home of U.S. Steel’s largest mill, Gary churned out 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 prominent along Lake Michigan’s sandy shore, starkly juxtaposed between the eroding dunes and Chicago’s towering silhouette to the northwest. But now they represent a city looking for a fresh start.

More than 10,000 buildings sit abandoned, and the population of 180,000 in the 1960s has dropped by more than half. Poverty, crime and an ignoble moniker — “Scary Gary” — deter private investors and prospective homeowners.

As U.S. Steel stands at a crossroads — a planned acquisition would put it under foreign control — so does the city that was named for the company’s founder and helped build its empire. A new mayor and planned revitalization projects have rekindled hope that Gary can forge an economic future beyond steel, the kind of renaissance that many industrial cities in the Midwest have managed.

In theory, the potential is there. Gary sits in the country’s third-largest metropolitan area, astride major railroad crossings and next to a shipping port. A national park, Indiana Dunes, is a popular destination for park-loving tourists and curious drivers.

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

A minor-league ballpark and a casino are among the construction projects that city officials point to as success stories. But they’ve failed to generate the sort of lasting, spillover economic effects that were hoped for, said James B. Lane, a history professor at Indiana University Northwest and a historian of Gary.

“The problem with all of these projects is that they didn’t lead to a multiplier effect of shops and businesses around them,” Dr. Lane said.

Other efforts have come up short. The city agreed to a sale of its convention center to a tech company that promised thousands of jobs, but later sued the firm after the company defaulted on its contracts. A multibillion-dollar plan to create a theme park capitalizing on Gary’s renown as the birthplace of the Jackson Five was scuttled in the 1990s.

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

U.S. Steel’s presence in Gary is greatly diminished. Gary Works, U.S. Steel’s largest plant, employs around 3,700 people, down from more than 30,000 at its peak. But local businesses still rely on the economic activity generated by the plant, which remains one of the city’s top employers.

One such business is Great Lakes Cafe, a diner right outside the gates of Gary Works. Every morning, steelworkers donning orange overalls stop in the restaurant, which has signs expressing support for the United Steelworkers union, to enjoy plates of hash browns and biscuits and gravy before starting their workday.

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

Economic research doesn’t point to one clear solution for Gary’s renewal, but suggests crucial elements like investment in infrastructure and making the city a more physically appealing place to live.

Mr. Melton’s election was celebrated by many as a new step. Kia Smith, a small-business owner who has lived in Gary her whole life, said the mayor’s focus on transparency was a positive sign for business in a place that has long dealt with corruption. Ms. Smith, whose grandfather worked in the steel mill, said the city needed to diversify its economy beyond steel.

“Nobody owns Gary,” said Ms. Smith, 43, who owns and operates a health food shop and catering business. “We all own Gary.”

Beautification and restoration efforts are underway. Mr. Melton’s administration has begun demolishing old buildings to attract developers who can put new housing and other structures 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 had started working with the new administration, razing 15 buildings recently.

Mr. Wiseman’s own childhood home, in the hard-hit Aetna neighborhood, is among those set to be torn down. “The demolition is one 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 that connects Chicago with cities in northwest Indiana, is set to open a second set of tracks between Gary and Michigan City to the east. The Gary/Chicago International Airport received $6 million in federal funding and added more cargo capacity in 2023, with the aim of serving as a logistics hub for tenants like United Parcel Service. In December, Gov. Eric Holcomb announced a $127 million grant to improve Interstates 80 and 94, which run through Gary, with funding from the Bipartisan Infrastructure Law.

Still, the challenges are steep.

Growing up in Gary, Kamal Minkah knew it as a thriving city. Things started to change in the late 1960s, when many white residents left, and continued with the first widespread layoffs at Gary Works in the early ’70s.

Mr. Minkah left to join the Air Force in 1980, returning in 1991. Gary was unrecognizable.

“It was like a sense of emptiness,” Mr. Minkah, 60, said. “It’s like the city just crumbled.”

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

Political isolation is another difficulty. Gary’s demographics — the city is more than 80 percent Black and heavily Democratic — put it at odds with Indiana’s majority Republican legislature. Lawmakers have blocked initiatives that would have allowed Gary to expand its tax base and offered it little state funding, citing concerns over corruption. At the same time, the Illinois government has 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 Indiana state tax law had helped his city, but not Gary, recover from the decline of manufacturing. Gary was a smaller, majority Democratic city within its larger, more conservative county, which by Indiana law controlled its ability to manage its taxes. It couldn’t grow its tax base without the county’s approval.

“Gary was held captive to what the other cities in its county wanted to do,” Mr. Helmke said.

Other cities provide contrasts and possible lessons.

Some 450 miles to the southeast, Pittsburgh’s steel legacy remains a core part of its identity, even as the city hardly resembles its days of heavy industry. Chic bars, co-working spaces and university hospitals stand where steel mills once lit the night sky.

Unlike Pittsburgh, Gary doesn’t have a major research university, a key driver of economic transformation. Mr. Melton said his administration had worked closely with Detroit’s mayor to understand how that city had worked to revitalize its economy after losing much of the nation’s auto manufacturing.

A useful template for Gary may be Erie, Pa., said John Lettieri, a co-founder of the Economic Innovation Group, a nonprofit research organization. Like Gary, Erie was heavily reliant on manufacturing — and suffered when those jobs were shipped overseas. But a combination of business and political leadership and the investment of 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. That project was spurred on by a federal program that offers tax breaks for the development of distressed areas. The company also added a $147 million building to its campus in 2021.

But more important for Gary, Mr. Lettieri said, is a continued focus on making the city safe and livable. “When you have declining population and high crime, those are prerequisite issues that the public sector has to address first before private sector buys in,” he said.

Though Gary has long been associated with decay, the residents who stayed, white and Black alike, see a chance at renewal.

Mr. Wiseman is among the hopeful. His mother worked in the steel mill in the 1940s and ’50s and felt loyal to the city, staying put when many other whites left, a migration that occurred around the 1967 election of Richard G. Hatcher, one of the first Black mayors of a large American city. Before she died, she made her son promise to help bring Gary back to where it was: a place where people want to live.

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