For state’s Gateway Cities, a long-awaited rebound
FALL RIVER — Blount Fine Foods, which supplies soups and other prepared dishes to retailers and restaurants, is undergoing its second expansion in seven years, a period that has seen its full-time staff more than double to 350 from 150. Nearby, John Matouk & Co., a maker of bed and bath linens for high-end department stores, recently completed a $10 million expansion, adding 24 employees to bring its workforce to 110. Any day now, the city of Fall River hopes to hear from Amazon.com Inc. that it will commit to building a $50 million distribution center that would employ more than 500 people and create at least as many jobs in ancillary businesses, such as trucking firms and restaurants.
This activity is an example of what the state’s older industrial cities have long been waiting for: the economic recovery. From New Bedford to Lawrence to Holyoke, sky-high unemployment rates are falling as the benefits of the six-year expansion finally reach these struggling communities, known as Gateway Cities.
Their struggles are far from over — unemployment remains well above the state average of 4.5 percent in these cities — but they are finally seeing progress. In New Bedford, for example, the jobless rate has fallen 2.1 points over the past year, nearly twice the 1.2 point decline statewide. In Brockton, where more than $100 million in public and private money is being invested downtown, unemployment is down 1.8 points from a year ago, according to state labor statistics.
In Lawrence, the most recent unemployment rate was 8.8 percent, nearly double the state average, but down sharply from 11.1 percent a year earlier. Among the success stories: MultiGrains Bakery, which supplies artisanal breads to restaurants, hotels, and grocery stores. The company now employs 250, up from about 200 two years ago, according to chief executive Joe Faro.
In Fall River, the jobless rate has dropped 2 percentage points over the past year. “Fall River is mimicking trends taking place in the state and nationally,” said Kenneth Fiola Jr., executive vice president of the Fall River Office of Economic Development. “We’re seeing a lot of growth in the health care industry, the construction trades, service sector.”
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Gateway cities are called that because their once-thriving manufacturing industries offered their heavily immigrant populations gateways to the American Dream. They were hardest hit in the last recession, with unemployment rates soaring well into the double digits. In early 2010, unemployment in Fall River topped 17 percent — 1 in 6 workers.
While buoyed by the national upswing, these cities all face the long-run task of rebuilding and reshaping industrial bases that eroded over decades and left behind poverty, unemployment, and infrastructure inadequate to compete in a technology-driven economy.
A century ago, Fall River was among the nation’s leading textile centers, with a population of about 120,000. Today, with fewer than 90,000 residents, the city is pinning its hopes on a diversified mix of businesses, from niche manufacturers and distribution centers to medical centers and biotechnology companies.
Blount moved its headquarters from Rhode Island to Fall River in 2004, attracted by its pool of millworkers, said Todd Blount, the firm’s president. “You’ve got that deep ethic of hard work, skills, and pride,” he said.
The food company doubled its size with a $10 million, 60,000-square-foot expansion in 2008 and will soon complete another expansion of similar size and cost. With more people dining out and buying prepared foods as the economy improves, the company has plans to expand again.
If there is a symbol of a rebound in Fall River, it’s a 19th-century mill building on the Taunton River. In 2007, not long before the national recession began, the textile maker Quaker Fabric shut down the plant housed in the building, throwing nearly 1,000 people out of work.
Today, the first floor of the building, known as Commonwealth Landing, is filled with shops and restaurants. Plans are in the works to convert its top floors into market-rate apartments.
Headquartered on the second floor, Bristol Community College’s Center for Workforce and Community Education is teaching English as a second language and basic workforce skills; offering certificate training for such promising fields as health care and the green industry; and partnering with Fall River companies to sharpen employee skills.
“We’re not very good about telling about our successes,” said Robert A. Mellion, president of the Fall River Area Chamber of Commerce. “This has been a turnaround in six years.”
Mellion cited another example of the improving economy. When he arrived in Fall River eight years ago, the industrial park was so underused that the City Council nearly voted to create an adult entertainment zone there to keep a strip club from opening downtown.
Today, the industrial park is 95 percent full, with more than 65 companies — including Blount and Matouk — employing 6,000.
With the help of the state and federal funds, Fall River has attracted companies through tax incentives, pre-permitted land, and major infrastructure improvements. The most visible example is a $200 million project revamping the interchange of Interstate 195 and Route 79 to remove a tangle of ramps that effectively cuts the downtown from the Taunton River and Battleship Cove, a tourist attraction featuring decommissioned Navy ships.
The city also hopes to become a player in biotech with its new Life Science and Technology Park. Its first tenant, MassBiologics SouthCoast, a division of the University of Massachusetts Medical School, moved there early this year. It aims to use gene therapy to develop drugs for Parkinson’s disease and other illnesses.
Future businesses are hatching on the site where Kerr Mill went up in a massive inferno two decades ago. There, the Advanced Technology & Manufacturing Center, part of UMass Dartmouth, is incubating startups, with products ranging from drones that could serve as precision crop dusters to equipment for underwater Internet links.
After six months in the incubator, Aquabotix moved out, but kept its headquarters in Fall River. The company, which designs and sells remote-controlled, camera-equipped underwater vehicles, employs 12 and subcontracts manufacturing to local machine shops. So far, it’s sold 350 vehicles worldwide, according to chief executive Durval Tavares.
Another incubator program is ramping up in Fall River. Entrepreneurship for All, which has helped 90 people start businesses in the Merrimack Valley over the past two years, just launched a South Coast operation to offer training, mentoring, seed money, and networking opportunities for budding businesses.
Joan Medeiros, vice president for commercial lending at Bristol County Savings Bank, said another bright spot is health care. From her downtown office, she overlooks an old mill complex now home to PrimaCARE, a multispecialty medical group that in 2010 doubled its size by expanding in an old mill complex.
“That place is a beehive of activity,” she said.
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Ultimately, city leaders say, Fall River’s success hinges on raising and attracting educated workers. But the city has a long way to go. Of its residents 25 and over, only 70 percent are high school graduates, compared with 89 percent statewide. Just 14 percent have at least a college degree, compared with 39 percent statewide.
“The real challenge for Fall River and other Gateway cities is to make sure that the workforce has the necessary skill sets to meet the demands of the workplace,” said Fiola, the local development official. “That’s no longer a high school degree. At a minimum an associate’s degree, preferably a college degree.”
When Meg Mayo-Brown accepted her post as superintendent of schools in late 2008, the system was headed into state receivership. Released from state oversight last year, the district is making steady gains in closing the gap between its MCAS scores and state averages.
Mayo-Brown credits the business community for providing equipment and supporting programs to encourage students to go to college, but resources remain tight in a city that is barely able to make its state-mandated minimum contribution to schools. Median household income in Fall River is just $33,000, half the state median. Nearly one in four residents lives in poverty, twice the state rate.
These are deeply ingrained problems that a cyclical upturn in the economy is not going solve, local officials said. They help explain why Fall River’s unemployment is still 7.4 percent, nearly 3 points higher than the state average and well above the US rate of 5.1 percent.
Addressing poverty, education, and infrastructure here and in other Gateway cities will require years, if not decades of commitment by local officials, businesses, and residents, as well as support from state and federal governments, according to economic development specialists. Without it, said Fiola, there will continue to be two Massachusetts.
“You can’t have a state unemployment at 4.5 percent and core Gateway cities almost double that,” Fiola said, “because what happens is that when the state average goes up to 6 or 7 percent, the spike in the core cities goes to 14 or 15 percent.”