Mayor John Callahan's State of the City Address

The full text of the mayor's annual speech to the Greater Lehigh Valley Chamber of Commerce at the Musikfest Cafe, ArtsQuest Center at SteelStacks, Feb. 14, 2013.


In 2003, I decided to run for mayor because I saw the potential in this community.

Bethlehem was in the infancy of its renaissance and the opportunities here were boundless.

There was also much uncertainty. I knew that this would be a period of enormous transition and change. Our success – or failure – over this last decade would in large part determine the trajectory of this community for decades to come.

This was not a time of status quo.

So in preparation for this – my last state of the city, being billed as the kickoff of the “farewell tour” by my friends in the Chamber of Commerce – I found myself re-reading my 2004 address.

I said during that first state of the city:

“Now, as we look into the future, our challenge goes beyond just saving the town, our goal must be to accelerate our progress and make Bethlehem a great city, not only in Pennsylvania, but also one of the best places to live in the whole United States.”

I said very boldly, and perhaps naively at the time, that, “During the next two years that will be my goal – and I will not settle for anything less.”

In April 2004 – just a month after that first state-of-the-city, Fortune magazine published an article about the “sinking” of Bethlehem Steel.

The reporter called the corporation’s main number and heard on the other end of the phone an automated female voice after navigating the extensive phone tree to reach accounts receivable, personnel, etc. The call ends with the rather ominous statement, “We have no one to answer questions."

For 125 years, the answer to most questions in Bethlehem was “Bethlehem Steel.”

But in 2004, both literally and figuratively, we were left to find those answers for ourselves.

Today, I can say that over the last decade, we found those answers.

Bethlehem is a national example of a successful midsized city, a prosperous place where success can be achieved by every resident.

The state of our city is strong in many ways. And it continues to get stronger.

In only one way is the state of our city poorer today – and that is because of the loss of two of Bethlehem’s best friends: Linny Fowler and Priscilla Payne Hurd.

These two women were great humanitarians who gave much to this community and its people.

While their contributions will stand forever, the best way we can honor their memory is to individually and collectively take their lead.

They taught us that each of us in our own way, in our own capacity should try to make our community better.

I think they would both agree that we must always keep our eyes toward the future.

Most of you know I am not one for a great deal of retrospection.

I am generally focused on what’s in front of me and always trying always to move forward, but being as this is our last state of the city together, I feel it’s appropriate that we take a chance to look back on how far Bethlehem has come.

So with a tinge of nostalgia, I would like to share with you a short video I prepared with my Community and Economic Development team.

These projects, these initiatives, these new office building and condominium complexes – these became Bethlehem’s answers to the question of what we would become after the loss of Steel. These pictures tell a tangible bricks mortar story of our evolution from old steel town to a modern urban community. 

In 2012, the Federal Reserve Bank of Philadelphia, which covers Delaware, southern New Jersey and the eastern two thirds of Pennsylvania, embarked on a 13-city study of cities in Philadelphia’s shadow.

The study set out to provide a picture of the condition of these cities as they seek to find their way in a post-industrial economy and evaluates the future of these cities.

All the cities had a population over 50,000 in 1950 where 25% of the workforce worked at once in manufacturing related areas.

In 1950, 60 percent of Bethlehem’s population worked in manufacturing – by far the highest percentage of any of the cities in the study.

No City on that list lost more than Bethlehem.

They studied these cities and measured their vitality based on a number of economic and social conditions.

While all these cities faced challenges, the report ranked Bethlehem number 1 and clearly showed that we were in fact a rebounding city. Serving as a third party objective fact driven validator of how far we have come and that should bring a great measure of pride to us all.

These results were not achieved by accident.

We recognized that in order to survive we had to remake ourselves, both as a City and as a government, in order to ensure our economic survival.

The plan was simple enough, deliver good basic City services as cost-effectively and efficiently as possible, maintain a well funded public safety operation and aggressively pursue economic development opportunities. 

It's not been all smooth sailing. We have led, governed and managed tax dollars during an historic economic meltdown. We have had to make tough calls to make sure our fiscal house was in order and our fiscal house is in order  

Bethlehem is in its strongest financial position in decades, with a bright future.  We have eliminated the deficit. We have $90 million less debt today then when I first became mayor. We ran back to back surpluses, including a million dollar surplus this year. Few municipalities can say that.

Not only have we dealt with the fiscal issues challenge the City today, we have also tackled perhaps our toughest challenge – our legacy costs. Nationally we hear about the fiscal cliff and entitlements. At the state and local level, we understand how pension costs severely limit our ability to balance budgets, forcing many municipalities to make some very difficult and unpopular decisions.

To give you some perspective on the impact of pensions in the City, in 2003 our pension payment was $1.3 million, about 3% of the budget. Today our payment is $11 million, almost 16% of the budget.

Continuing at that pace was not sustainable. We had to make a change. Here is what the system is now.

The changes that we made to the pensions system alone will save the City approximately 30 million dollars over the next 20 years.

We’ve addressed the pension problem for future administrations. More importantly, we’ve addressed this problem for future generations of Bethlehem taxpayers.

Getting to this point wasn’t always easy and it required strong leadership and tough choices.

Bethlehem’s reputation of being a well-managed city is important to me. It was not earned by accident. We at city hall take pride in doing more with less.

Our Continuous Improvement initiative has helped us do just that. CI in the City is an innovative public-private partnership with Air Products that eliminates waste, increases efficiency and empowers employees to do their jobs better.

We have the smallest work force in our history. Yet, I’m proud to say, we continue to deliver services at the highest level they have ever been.

However, in all the right-sizing of our government we never sacrificed public safety for short term financial relief. In fact we increased our spending in public safety. In 2003, public safety spending represented 41% of the budget, today it represents 53%. Investments in public safety are some of the most important any City can make and the results speak for themselves.

We have been the safest City in the Commonwealth for 9 years running, a remarkable accomplishment and I want to take a moment to acknowledge the leadership of our Police Chief, the dedication of our officers and the trust and partnership they’ve formed with our community.

There is no more important indicator of a city’s livability and ability to attract more economic growth than safety.

Without a sense of safety, people will not live in, invest in or visit Bethlehem.  We can’t be the setting for the American dream if our city isn’t safe.

We have enjoyed over 2 billion dollars in economic investment since 2004.  You can see just how far we have come looking at what has become one of my favorite charts.

The TIF has provided us with $28 million of improvements to this very site – the Levitt Pavilion, the Visitors Center and all the infrastructure necessary to compliment this new building.

This year, we will be focused on the next wave of public investment on this site will be projects like the restoration of the Hoover-Mason Trestle, the elevated rail line directly behind me.

This administration is making investments for the future and practicing a great deal of delayed gratification – concerned more with the next generation than the next election.

And speaking of that next generation, Bethlehem’s future leaders are already here.

A fact you may not know is that 22% of the City’s population – in fact, our largest population group – is between the ages of 20 and 34.

These young people are highly educated and highly employable.

In Bethlehem they find opportunities, a place to start a career and a place to raise a family.

We continue to target the technology sector as we continue to grow Bethlehem as a City of Innovation.

Last year, with the grand opening of Pi: Partnership for Innovation, our latest post incubator space we put out a call to every entrepreneur, inventor, scientist, developer, hacker, mathematician, student, professor and thinker: Bethlehem wants you.

And they responded. Almost overwhelmingly so.

Pi’s 8,000 square feet is filled to capacity and the demand for office space in the Keystone Innovation Zone remains high.

As we move from a post industrial era and build an economy with jobs for the 21st century, we must again reinvest in technology centers, facilities where we can attract and grow the best and brightest companies and individuals.

We recognized the ever expanding need for our next tech center location and we answered that with .

Tau will recast the former Bethlehem Steel General Office Building East Annex as a fully integrated technology center which attracts companies in every stage.

As an administration, we’ve worked hard over the last decade because we want to be the last to say that Bethlehem is still struggling from the loss of Steel.

We’re no longer the community with the largest brownfield site in the country.

Today we’re the community with the largest shovel-ready opportunity for investment, growth and new jobs.

In my first state of the city address, I said:

“This City’s future holds endless possibilities. Our only limitations are self-created … that I was elected to keep Bethlehem moving forward, to build upon the success that was started and to lead us to a brighter tomorrow.”

I believe today, as I said then, that the continued success of Bethlehem rests not with one person or one mayor, one company or one institution but with the collective efforts of all residents, all of its businesses and all of its institutions.

Ten years ago, I said:

“In the next decade, Bethlehem will become the benchmark for livable urban communities, where people can live, work and play all in walking distance.”

That’s exactly what Bethlehem is today. We are the safest, most prosperous and fastest growing city in Pennsylvania. And we should all be very proud to have achieved that goal together.

But there’s always more to be done.

So as I conclude my final state of the city address as your mayor, and embark on what the Chamber has described as the “kick-off to my farewell tour,” rather than bid you a fond farewell, allow me to say, “until we meet again.”

Benjamin Cole February 15, 2013 at 04:15 PM
Having lived in similar 'mid-sized' cities with manufacturing backgrounds,and having lived in Bethlehem for 5 years, I can say that I'm truly impressed with it's reinvention. I'm an admitted skeptic, and have heard too many negative things about Mayor Callahan. That being said, I will continue to support his career, as well as those in the various organizations that have nurtured this little town into a place where I feel truly comfortable and at-home. Thank you, your honor, for all of your hard work. I know that it wasn't easy, and certainly not always much fun, but from my perspective, you've done a fantastic job at showing all of us that the reward is worth the risk. I look forward to your bright political future. And,no, I'm not a paid endorser :-)
Patriot2 February 15, 2013 at 05:11 PM
Callahan will be forever remembered as the Mayor that brought casino gambling and all of its ills to our beloved community. Now it looks like the Sands will be moving on at about the same time as he leaves office and look for Johnny Casino to end up with a cushy job somewhere working for Sheldon. The casino complex will make a nice discount store mall.
GOGS1997 February 15, 2013 at 06:49 PM
Balderdash! Sands-Bethlehem isn't going anywhere. Check the financials!
Craig Kapilow February 16, 2013 at 08:00 AM
Our Mayor is awesome! He has redeveloped and remade the city into a growing community with so many achievements! I can not think of a better place to live because of the leadership Mayor Callahan! Onward and upward we continue to see plans developed and new jobs, better quality of life and a bright future for all residents and businesses!


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