SOS In The News

Museum head can do Steel deal

Tuesday, November 11, 2003

By GREGG W. BORTZ , The Express-Times

BETHLEHEM -- The chairman of a proposed national industrial museum on former Bethlehem Steel property says he can work with a developer who wants to buy the land.

Steve Donches, a former Steel executive who now heads the National Museum of Industrial History, continues to try raising money and pitching the economic feasibility of his Smithsonian Institute-affiliated museum.

The property is owned by International Steel Group, a Cleveland-based company that bought Steel's remaining assets in April.

Donches and other preservationists launched a letter-writing campaign in September, enlisting more than 100 people to push for preserving the site.

Today at 11 a.m., statewide preservationists and national historic groups will join Donches at First and Polk streets to press the site's national historic value.

Donches said the event may be moved inside in case of bad weather.

Among the presenters will be Preservation Pennsylvania, a nonprofit organization partially funded with state money. The organization put Steel's property at the top of its yearly "Pennsylvania at Risk" list of historic sites in danger of falling to the wrecking ball.

Steel opted out of a South Bethlehem historic district created in the 1990s. That could have prevented what some call the inevitable demolition of some Steel buildings.

"At the time, the company owned the plant and we didn't see the need for the historic designation," Donches said. "Obviously, things changed, and in retrospect we would have done it differently."

ISG is negotiating to sell more than 100 acres of Steel's former production plant, including the blast furnaces and other historic buildings, to investor Delaware Valley Real Estate Investment Fund.

Delaware Valley, a $100 million investment arm of 42 Philadelphia-area trade union pension funds, has said it intends to develop the land into the Bethlehem Works retail-and-entertainment complex designed by Steel and Enterprise Development in 1996.

Steel went into bankruptcy in 2001, and Bethlehem Works went into limbo.

The museum has raised more than $11 million, and has an interim goal of $2 million more to complete exterior construction of the structure, Donches said.

A total of $15 million is needed to turn the 37,000-square-foot former electrical shop into Exposition Hall, the first building for the planned museum and the only one the museum currently owns.

Museum proponents plan to house artifacts of America's industrial might in the 19th and 20th centuries.

To house the large exhibits, the museum's leaders want to buy the massive No. 2 Machine Shop, which is on the tract of land Delaware Valley hopes to buy.

Preservationists also are hoping to save the blast furnaces which are attached to the former Engine House.

Delaware Valley officials said earlier this year they could save one or two of the furnaces, but Donches insists the engine house in its entirety is valuable as the last of its kind.

The machine shop became a center of controversy between Delaware Valley and proponents of the National Museum of Industrial History.

Donches estimates a $240 million renovation would be needed for the machine shop, but Delaware Valley insists the giant building would get in the way of profitable development at the site.

Some local politicians, including Mayor-elect John Callahan, have questioned the feasibility of raising that kind of money. Callahan has said he's concerned the site would remain vacant and decrepit if developers wait too long.

Donches said the project can move forward and doesn't have to wait until all the money is raised.

Donches said Delaware Valley officials told him recently they will give museum proponents some time to discuss plans for a museum complex.

"They have, it seems to me, an open mind, as to how this can be approached," Donches said. "I'm hopeful we'll be able to convince them that economic development associated with preservation will accomplish what they hope to accomplish in terms of economic development."

Neither ISG nor Delaware Valley has commented much on plans for the site. A lawsuit filed by another developer, Preferred Realty, has tied up plans to sell the property.

State Rep. T.J. Rooney has served as a go-between for Delaware Valley and local officials.

When Delaware Valley officials said in August the museum plans could interfere with profitable redevelopment of the site, Rooney championed the developer and declared the No. 2 Machine Shop concept dead.

Rooney said Delaware Valley's interest in historic preservation has been "the position all along."

"We've met and told Steve that directly now on at least three times. We're rooting as hard for him to succeed as anyone else."

Rooney said he's hopeful a deal will be reached between ISG, Delaware Valley and developers looking to build an industrial park on Steel land before the end of the year.

Reporter Gregg W. Bortz can be reached at 610-867-5000 or by e-mail at gbortz@express-times.com.