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Hometown company move helps Gary, Indiana’s economic turnaround

Ron Stang
Hometown company move helps Gary, Indiana’s economic turnaround

The move by century-old and hometown Indiana Sugars to a new headquarters complex on the Gary, Indiana waterfront might herald a major turnaround in the hard-pressed city’s fortunes.

The move, announced in March, will see the company, which started out as a candy shop but now refines sugar in bulk and has facilities in several states, move from its longtime east side location to eight miles northwest on Buffington Harbor on the Lake Michigan waterfront. The move encompasses the company’s offices, manufacturing and shipping facilities and will be built in stages, beginning this quarter.

It’s also a major coup for new Gary Mayor Eddie Melton, who had an election vision for the waterfront, which was desperately in need of new development following the collapse of the onetime Majestic Star casino and hotel.

Indiana Sugars will take up 55 acres of the site and says it will add an additional 22 acres. It’s the second such major announcement for the area, the first being California-based Fulcrum Energy’s decision to build a biofuels plant, converting municipal waste into transportation fuels.

Th company declined an interview as did the mayor. But in joint releases the firm praised the mayor’s “engaging and thoughtful” efforts to retain the company, which had considered a move out of the area.

“Mayor Melton and his team were passionate about our project and transparent that they didn’t want us to leave,” fourth generation family-owned business president John Yonover said.

“This move was a top priority for my administration’s first 100 days in office,” Melton also said.

Majestic Star closed in 2021. Its history is significant, bringing casino gambling to the state of Indiana in 1996, the brainchild of Detroit entrepreneur Don Barden. But the casino, which had suffered financial problems and one time bankruptcy, was a victim of a market shift to an inland competitor, the Hard Rock Casino, the state’s largest and with a hometown Jackson Five theme and performance space.

Redeveloping the deep-water port was a priority for the mayor, with observers saying it could well kickstart expansion not just of the harbor but the city of Gary generally.

“I believe this project is proof that Buffington Harbor and the adjacent footprint will provide Indiana Sugars and future businesses the opportunity to maximize their operations due to Gary’s unique transportation infrastructure,” the mayor said.

That includes the confluence of three interstates, two Class One railroads and a recently expanded Gary/Chicago International Airport, which specializes in cargo. Piggybacking on metropolitan Chicago, with the Windy City’s downtown only 25 miles away, is also a motivator.

Chuck Hughes, a former city councillor and now president of the chamber of commerce, says the city could capitalize on Chicago’s economic disadvantages.

“We’re trying to attract people from Illinois which has one of the highest tax rates in the country,” he said.

He called the announcement a further “building block” to reinvent the harbor.

Hughes said Gary has been hampered not just due to population flight and urban decay, but because of state mandated municipal balanced budgets, based overwhelmingly on property taxes.

Whereas neighboring Chicago might “just go into debt” to facilitate development Gary has to balance its budget.

“You can see the kind of strain that’s putting on a community that’s not getting a wealth of property tax revenue,” he said.

Even major onetime tax providers like US Steel’s Gary Works significantly downsized and appealed for a major tax break. The impact was huge since the company had paid almost 50 per cent of taxes. At the time, in 2002, the city’s budget was $68 million; 10 years later it was $47 million and facing a $15 million deficit.

Micah Pollak, who heads Indiana University Northwest’s Center for Economic Education and Research, said Indiana Sugars’ move is symbolic of a turnaround already in the region, ironically treated by the rest of the state as part of metropolitan Chicago yet seen by Chicago as definitely in Indiana.

“The rest of Indiana thinks of northwest Indiana as Chicago’s realm and Chicago is ‘No no no’ that’s Indiana’s realm,’” he said.

In fact, the area has seen a “dramatic rise” in new businesses with surrounding Lake County “adding a net of 1,585 new business establishments (+11 per cent) in the last 10 years, while over the same period Cook County, Illinois lost a net of 9,091 (-6 per cent) business establishments,” Pollak said.

He explained this may finally represent an awakening on the part of investors and developers. With railway and freeway access and a deep harbor, “I think people are starting to realize, ‘hey, this region is a potential major source of growth.’”

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