Over a decade, a 100-year-old economic foundation crumbled
By Larry Dale
Daily Courier Staff Writer
Part 3 – July 9, 2009
FOREST CITY – Ten years ago this month, Stonecutter Mills in Spindale closed, delivering another body blow to a municipality built almost entirely on textiles.
Some 10 years later, Hanesbrands closed its plant in Forest City, and the town had to lay off some 35 people in response to the loss of revenue.
For more than 100 years, textile mills had been at the heart of the Rutherford County economy, so the closing of almost all of them has been a nightmare for county residents.
The textile mill seemed to be a permanent fixture on the landscape. Young men and women could go into the plants from high school and spend their entire working lives there.
County Manager John Condrey said recently, “In the early 20th century people like the Tanners and the Hayneses and then Cowans and Reynolds and a lot of families were very involved in introducing textiles to Rutherford County. And particularly setting up textile plants on a river where they could harness the water power that they needed to run those plants.
“And it basically industrialized Rutherford County to where we were very heavily dependent on textile manufacturing. So if you look back at that hundred years of the 20th century, it was extremely important what it did and the number of people it employed, literally generations of families worked in the same plants oftentimes.”
Little could those workers have known that a catastrophic economic storm that was brewing in Central America and Asia would one day descend and destroy their means of making a living.
Glenn West, a 47-year veteran of Stonecutter Mills, expressed to a Daily Courier reporter what many people in the county were feeling when the plant announced its closing in June 1999, “There’s been a lot of bread and butter here.”
Likewise, municipal and county governments found themselves missing a major portion of their “bread and butter,” too.
Spindale Mayor Mickey Bland said recently, “After Stonecutter finally closed down their operations, we lost about $600,000 in sewer revenue. Historically, Spindale was able to keep its tax rate lower because of the sewer fees, because of the water usage by all the textile plants. But once that dried up, the only solution for Spindale other than cutting basic services, was to go up on sewer fees to accommodate.
“Now, of course, you can’t make up on the residents all the money we lost. You’ve got to seek a balance, and that’s what we tried to do. I think after Mastercraft left, we lost approximately $200,000 when they finally closed. That was the last big, textile plant to close.”
Bland said that textiles-provided perhaps 25 percent of the town’s revenue. “But when you’re talking about a small budget to begin with, 25 percent is a big chunk,” he said.
Forest City, in its February 2008 application for the NC STEP (Small Town Economic Prosperity) program, noted that Rutherford County had lost 7,500 jobs since 1999, and has consistently struggled with double-digit unemployment.
The county’s jobless rate was 15.5 percent in May of this year … and that was a decline from the 16 percent rate in April.
The NC STEP proposal also noted that Forest City had a 14 percent population increase from 1990 to 2000, but added that that increase was because of taking in Alexander Mills: If not for that merger, the proposal said, the town would have had an 11 percent decrease in population in the 2000 Census.
The recent Hanesbrands closing was an economic blow to Forest City.
Chuck Summey, town manager, said, “Well, we didn’t have the electric load to that plant; but we had the water and sewer. They were our biggest water users. At one time, when they first started, they started running I guess what they said, full speed, they were using sometimes over three million gallons of water a day.
“And then they went to some pretty high priced dye machines. And they used less water and dropped down to about 2.6 million with that new equipment that lowered their water cost. But gosh, at one time, they were using about 3.2 million gallons a day.
And then, of course, sewer, we treated their water and wastewater. Revenue-wise that contributed about $3 million to our budget every year. So it was a huge hit on the town. It’s not hard to figure out, but that’s the reason last October and November, the economy and them going out, that we laid off about 35 people.”
Other plant losses hurt, too, Summey added.
“Cone Mills (the former Florence Mills) out here, we had the water and sewer to them,” he said. “We didn’t sell them near as much water as we did Hanes, because they were more of a weaving operation. But it was jobs.
“And the unusual part about that is, it was almost downtown. That is why the city is so interested in maybe getting it where it looks nice; it is really part of our downtown. That was a huge hit on the town because it was one of the oldest employers in the town. In fact, that’s, why the town of Forest City grew, because of the mill right there.”
The town is in the process of redeveloping the old mill site to make it an asset to the downtown area.
Forest City continues to work to bring in new industry.
“We’re trying all kinds of stuff,” said Summey. “I’m sure the economic development people are working on it. We work every day on trying to attract people in here.”
Summey cited a success story in attracting new industry.
“We have been successful in attracting Plastic Packaging, over on Piney Ridge Road,” he said. “They sort of outgrew their place in Hickory. They were looking for a place to expand. I guess that’s been 10 years now. We courted them heavy. I went over there for a while every day. And they liked Forest City, and we really struck up with the owner. He really liked what we were trying to do. So they moved here.”
Bureau of Labor Statistics data for the county for the third quarter of 2008 reflects that shift in manufacturing in Rutherford* County. Textile mill employment is down to 1,012, while plastics and rubber products manufacturing employs 663 in the county. In total, manufacturing of all sorts accounted for 3,400 jobs in the third quarter of 2008.
Summey noted that Forest City has infrastructure in place to attract industry.
“I think the thing that I concentrate on, and I’ve concentrated on since I’ve been here,” he said, “is we try to do what we do best. We provide services as far as electric, water and sewer the best we can.”
And he added that the town tries to make a good first impression.
“I try to keep this town as clean and as pretty as I can,” he said. “Maybe, hopefully, somebody will look at all that and say, just like Plastic Packaging did, ‘I’d like to be in Forest City; it’s a pretty place.’ And I think that’s what you have to do every day. You have to prepare, whether they come or not. You just try as hard as you can every day and hope something good comes out of it.”
But Summey is also a realist who understands that economic redevelopment is a difficult task in today’s economy.
“It’s hard to get industry now with any jobs,” he said. “That’s what’s wrong with the whole economy. They say this thing’s going to be over in September, but where are the jobs? I don’t understand how it’s going to get better. I’m not being pessimistic; I’d rather be optimistic, but I don’t know how it’s going to change. I wish it would. It would make my job a lot easier. It would make everybody’s job a lot easier. It’s just a lot of pressure on everybody.”
Spindale, too, has looked for replacements for lost textile revenue.
“Well, first of all, we tried to offer some incentives for residential development'”. Mayor Bland said. “And we’ve achieved that somewhat in Sparks Crossing because it has added $4 million to our tax base.
“And then we’ve concentrated on trying to improve the downtown area by bringing in varied businesses such as restaurants. And the town voted in liquor by the drink. That was accomplished in the last 10 years to help achieve that goal of improving the downtown area.”
Part of the legacy of textiles in Spindale was that the town has the ability to treat large amounts of wastewater.
“Right now we are able to process approximately 6 million gallons a day and we’re only processing maybe one and a half to two a day,” he said. “So we would be able to accommodate some industry. In fact, that was one of the reasons that Rutherfordton and Spindale were attempting to join their sewers at one time, because the flow from both of them into one plant would naturally help each of us, economically. It just never worked out; we couldn’t come to an agreement.”
Bland said Spindale has a prospect for a new industry, but he added that “I am not at liberty to give any information at the present time” because of the sensitive nature of the recruiting process.
An indicator of Spindale’s improving economic condition, he said, is the fund balance.
“We did not dip into our fund balance again this year,” he said. “In fact, last year we were able to put $50,000 into our general fund balance, which is a major accomplishmen in my opinion because we have been taking out of it for years.”
Bland said another incentive package may help the town.
“Now I am proposing an incentive to increase our tax base on residential, that if you build a new home in Spindale , of $179,000 or greater tax value, we will rebate your taxes for three years. That’s going to be on our agenda for July for the, board to consider.
“And that’s to help kick start some housing development and increase our tax base. What people don’t understand is, it may be giving something away now, but if that helps your tax base in the long run, it keeps your taxes lower. That’s the objective.”
He said residential development is needed “because of losing one of our prime spots in Ellington Heights because of the (U.S.) 221 widening project.”
The Spindale mayor said of the town’s future, “I see a changing economy from textiles to smaller businesses of varied types, restaurants, service industry. I don’t think we are ever going to see in Spindale 500 and 600 employee plants with textiles, as we did in the past. I think that’s gone.” In contrast to its municipal neighbors, Rutherfordton was not as heavily impacted by the decline of the textile industry in the county.
“The only industry that we have in Rutherfordton is Allied Die,” said Town Manager Karen Andrews, “which is not textiles, and we have part of Reeves Brothers–it’s split by Ruth and the town of Rutherfordton. And that’s really not textiles either. And we’ve got 3 Tex, which is a textile weaving process, but it’s not fabric. So we never had textile mills in the town of Rutherfordton. We are strictly a bedroom community.
“So with the closing of the textile plants, what that did for the town was, some of the folks lost their jobs, and they had to find jobs elsewhere. And there were some houses, I don’t know if they were foreclosed upon or people just moved. But that’s basically what happened to the town. And I’m sure that we lost some tax revenue as far as sales tax because of people not having income to purchase items in our stores and purchase meals and those kinds of things.”
County Manager Condrey said the effort to recover from the textile job losses has been an up-and-down process.
“Just to give you one idea how your strategy, changes, or how quickly things can change,” he said, “several years ago the county bought the former Burlington property. We leased that to Mako. They were building boats. We looked at opportunities to attract some boat-making suppliers. And then there was another boat facility in Cleveland County and another one in McDowell County. And it appeared to be an up-and-coming opportunity in a different market. And then what happens? In the last year and a half all three of those plants have now closed.
“We’re looking at another opportunity we have now. We were fortunate to have the state backup data center locate here. We’re looking for other opportunities that might present itself because of that.”
Condrey said Rutherford County was slammed in more ways than textile losses.
“I used the analogy we were almost like a perfect storm, what happened in Rutherford County,” he said. “We had so many textile jobs that we had a lot to lose. And then, on top of that, we go out and work to put ourselves in a position with another industry, such as the boat-building industry, and then you have the worldwide economic problems that made discretionary spending on boats go away.
“Then we know what’s happening in the country as far as automobiles. People talk about Forest City in terms of Little Detroit. Car dealers and the used car business have taken a tremendous hit. We had well over 200 licensed car dealers who were in it some way. A lot of people from Rutherford County went up and down the East Coast buying used cars and bringing them back here and refurbishing and selling. So it wasn’t just for the Rutherford County market, it was for a larger regional sale. I’m sure there’s an impact there too.
“And then we were seeing tremendous growth in the building sector. Building contractors, all the subcontractors, grading contractors, everybody who probably a year and a half ago had tremendous amounts of work. And we know what has happened overall with building.
“Start looking at trends that are happening across the country, and we seem to reflect a portion of it here. That’s why I used that analogy, the perfect storm. We do seem to have parts of all of the markets that are suffering right now.
“We felt like we were kind of chipping away and coming back to a point and then this, the last year or so … unemployment a year ago vs. today.”
In Part 4: Agriculture has gone through many transformations over the years, but it has always remained a part of the economic mix.
Reprinted with permission from The Daily Courier. Copyright owned by The Daily Courier.