Our Towns: Beloit's renaissance a well-kept secret

The president of Beloit College may have thought he was offering a simple endorsement, but actually he was communicating volumes about the experience of place and the importance of making an investment. In a letter written to bolster Beloit’s chances of winning a Great American Main Street award (which it did), Scott Bierman told the story of how he came to accept the position as president of the private college, and how a simple walk downtown helped seal the deal with wife Melody.

“What Melody and I discovered in Beloit was that rarest of things – a thriving city center,” he wrote.

The city, which is celebrating its 175th anniversary, is still in the process of a reinvention that has been unfolding for 20 years, but the progress is evident. Through a combination of adaptive reuse, historic preservation, and deft use of economic development tools, the city that calls itself the Gateway to Wisconsin – 38% of the traffic that enters Wisconsin enters through the I-90 corridor – offers a good first impression of the Badger State.

The perception of Beloit as a rough-and-tumble industrial town – the municipal equivalent of a tough, brawling sidekick – has been difficult to shake, but once people actually pay a visit, they see a community of intellectual pursuits and culture that is continually modernizing and actively recruiting the creative class.

Beloit is a state line town of nightly music along a river walk, a surprisingly strong arts scene that includes the Beloit International Film Festival, and the revival of that staple of Wisconsin nostalgia – the supper club.

And it has benefited from remarkable philanthropy from the likes of the late Ken and wife Diane Hendricks, who built ABC Supply Co. into the largest wholesale distributor of roofing and siding materials in the United States, and Henry Knueppel, former CEO and still chair of Regal Beloit, whose annual revenues grew from $38 million in 1979, when he joined the company as a division general manager, to nearly $3 billion in 2010. Knueppel is the new president of Beloit 2020, a program to direct the next wave of redevelopment.

“We have multiple billion-dollar businesses,” noted Stephanie Klett, state secretary of tourism, Beloit resident, and the former host of Discover Wisconsin. “We used to be an old industrial town. Now we’re a revitalized industrial town.”

Comeback trail

As a business community, Beloit has absorbed some blows, including the demise of Beloit Corp. in the late 1990s, the loss of businesses like Freeman Shoes and Alcoa aluminum, and more recently, the closing of GM’s plant in Janesville, which employed residents of Beloit. However, the community that has emerged remains reflective of Wisconsin’s core industry strengths – food processing, agriculture, and manufacturing – and is seeing more expansion than contraction, in part because its central location and access to the Interstate help make it a warehouse and distribution hub.

Another Beloit native, Kurt Bauer, president of Wisconsin Manufacturers & Commerce, said Beloit is a case study in how the local economies throughout the industrial Midwest have been permanently altered by global competition, particularly cheap labor costs in emerging economies. “Beloit should be reeling, but city leaders have shown tremendous creativity, as well as fortitude and resolve in rebuilding the local economy after each plant closure,” Bauer said. “The result is that Beloit is as competitive as any other city in the state and, indeed, in the upper Midwest in what it can offer to industry.”

Beloit launched its bootstrap effort in the late 1980s, and now the talk is mostly about business expansion. While there is still work to be done in the state line area as part of the Turtle Creek Corridor Redevelopment plan, a partnership with South Beloit, Ill., the city has made tremendous strides in economic development. A sampling of recent expansion projects includes, but is not limited to, the following:

Diamond Foods, Inc. recently expanded its Beloit Kettle Chips plant, adding 45,000 square feet to the facility and adding 100 new jobs as part of a $38 million investment. Supporting the project was an incentive package pieced together by the city and state, including tax credits and training grants.

Genecor International, which makes enzymes used in converting corn to ethanol, is only creating three new jobs, but its $30 million capital investment will add 128,500 square feet, and modernize and improve the efficiency of its plant, which means it will stay put. The project was made possible with tax credit assistance from the former Wisconsin Department of Commerce, and a $100,000 loan from the Greater Beloit Economic Development Corp.

Kerry Ingredients & Flavours will expand its Beloit headquarters by 29,000 square feet, adding 47 jobs, with funding assistance from the city and the Wisconsin Economic Development Corp. The WEDC will issue a $1.5 million “forgivable” loan to support $20 million in Kerry expansion investments across the state, including $8 million for improving operations at the 264,000-square-foot facility in the Gateway Business Park.

ABC Supply Company’s main headquarters, as viewed from a lagoon on the Rock River.
ABC Supply Company’s main headquarters, as viewed from a lagoon on the Rock River.

“These companies are investing, and that’s a good sign,” said Andrew Janke, economic development director for the city of Beloit. “When you see disinvestment, that’s reason to worry.”

Beloit also is attracting businesses. FatWallet attracted much of the attention when its move from Illinois brought 50 jobs, but NorthStar Medical Radioisotopes is building a $136 million plant here that will produce radioisotopes used in medical imaging, initially add 100 high-paying technical jobs to the tax base, and perhaps scale up to 300. Beloit still is in the running as the home of SHINE Medical Technologies, a direct competitor of NorthStar.

With help from the state in the form of Assembly Bill 13, a development opportunity zone has now been established citywide, not just at Gateway Business Park, the site of a previous zone, and not necessarily to lure businesses here, but to accommodate existing firms that want to expand. Under the program, businesses receive state tax credits if an expansion meets certain criteria.

“The way AB 13 was written, it can extend to existing businesses within the city limits of Beloit, and that is a big change,” noted Randall Upton, president of the 330-member Beloit Chamber of Commerce. “So it’s not just about attraction, but also for those existing corporate entities that wish to expand. That was important to us, and it was drafted with that in mind.”

The credits give the city another economic development tool. “Now we have a tool that has become much more global for projects that are significant, yet geared toward small business development and new jobs to be eligible,” Janke said. “They have to be pretty good-paying jobs and the companies have to provide health insurance, but I’ve had two inquiries from downtown – and pretty cool projects, quite frankly.”

Rolling on the river

Formed at the confluence of Turtle Creek and the Rock River, local waterways were critical to Beloit’s development, and essential to its vibrant redevelopment, as music is featured along the river virtually every night of the week.

Anyone can plan a full summer weekend here, beginning with music on Friday night at Harry’s Place, Nikki’s, Domenicos, and various spots along the city’s river walk (blues and jazz are the preferred genres here). Visitors can wake up to a Saturday morning farmers market that draws upwards of 3,000 people downtown, scoot over to Pohlman Field to take in a Beloit Snappers baseball game on Saturday afternoon, and then back to the downtown for more music and dancing. If you’re looking for a more refined way to spend your Sunday, you can cruise over to a communal gem known as Beloit College, originally founded by directors of Yale University, and visit its Logan Museum of Anthropology, or make the short trek to Heritage Sunday at Beckman Mill Park, which features a restored 19th century grist mill and pioneer encampment.

Part of the city’s remodeling was to emphasize existing quality-of-life amenities, and build new ones to attract the creative class. Kathleen Braatz, executive director of the Downtown Beloit Association, said the Rock River banks once featured an industrial focus, but that has been revived as part of the Beloit 2000 and 2020 efforts. “Business leaders realized that to recruit the best workers, you have to have a sense of place so that people want to move here,” Braatz said. “We focused on the riverfront and developed districts around it because there are areas that have a distinct feel and want to be treated differently than the downtown, which is one district within the city center.”

Samantha Johnson, marketing coordinator for the Greater Beloit Chamber of Commerce, has launched a young professionals organization not only to attract and retain young people, but leverage that by getting them involved in the community. By promoting full immersion in the community, she’s after a deeper level of commitment. “It’s not just about retention, because one group on its own is not going to keep a young professional in the area,” she stated, “but if we get them to establish roots and participate in the community, we have better opportunity to not only keep them here but keep them as engaged community members.”

“I always say Beloit is a boomerang town,” added Deb Frederikson, executive director of Visit Beloit, who left the area for 20 years before moving back. “When you’re in school, it’s all about how much you want to move to Chicago or Milwaukee or Madison. As soon as they have kids, they move right back.”

The Beloit enigma

One of the reasons for Beloit’s perceived decline is the metro unemployment rate, 12.8% in August, the second highest in the state. Janke calls it the “Beloit enigma,” and partially attributed the high unemployment rate to the skills mismatch faced by local companies. While the recession enabled healthy companies to pluck the pick of the litter from failed businesses, there still are job openings going unfilled because organizations cannot find people with the right skills.

Years ago, a Beloit Memorial High School graduate could transition right into a job at Beloit Corp. or Fairbanks Morse (now a division of EnPro Industries) or GM in Janesville, but those opportunities aren’t as plentiful.
Still, about 1,200 job openings remain unfilled in Rock County. “If someone worked on a machine at Beloit Corp. for 20 years, he or she probably is not going to run a linear accelerator at North Star,” Janke noted, "but there is a lot of in-between stuff. I had a frank discussion with executives at one company who told me that call center jobs aren’t perceived as particularly fun, but you can make $40,000 year. So what’s better? Having a job at $40,000 or being on unemployment? They will do the training. You don’t have to go to Blackhawk Technical College to train to be a telemarketer. They will teach you.”

To help address the stubborn unemployment rate, Rock County is taking part in the state’s transitional jobs project. Eloise Anderson, secretary of the Wisconsin Department of Children and Families, announced in July that the program, administered in Rock County by Community Action, Inc., would help provide 4,000 people with an immediate income while giving them the opportunity to develop skills demanded in the labor market.

In addition to economic development and retention issues, Upton said the Chamber is actively involved in community issues like promoting public health, housing solutions, and higher educational attainment because they are intertwined with commerce and business retention. “We’re dealing with issues in the community that enable us to attract industry in a non-financial way,” he noted.

In Beloit, economic development stakeholders collaborate effectively enough to avoid turf wars and make genuine progress. Braatz described how a historic downtown building, once a Woolworth’s department store, almost became a parking lot to accommodate an expansion by Kerry before the company moved to its current location in the Gateway Business Park. Instead, various agencies collaborated to restore the facade and found a Chicago buyer to execute its highest and best use – a retail anchor. It would eventually become a Bushel and Pecks restaurant featuring local food and an organic food store, and it serves as a community meeting place. A “my-way-or-the-highway” approach by any single group “could have forever changed the character of an important downtown block,” she noted.

Said Bauer: “Other Rust Belt cities that have experienced similar economic hardships and job losses would do well to study how Beloit’s leaders have maintained their optimism and developed a vision for the future.”