econscius

A “Blue” Economy: 12.2% Unemployment & Vacant Storefronts in Rockford & Freeport, Illinois

In Economy, Illinois, Unemployment on February 5, 2012 at 3:22 am
 

Remember when gas was $1.86? Long vacant gas station on main drag (Bus'n US Route 20), one block from county courthouse, Downtown, Freeport, Illinois.

Vacant storefronts in downtown Freeport, Illinois.  Read the homemade sign on the left: 3 story commercial building for sale for $30,000.
 
Today, we get behind the numbers to see what a high unemployment, dying “blue state” city looks like.  The unemployment rate in very ‘blue’ Illinois is 9.8%, [1] more than a percent above the national rate.  The Illinois economy is dire, no question.  The Rockford-Freeport-Rochelle Metropolitan Statistical Area had one of the highest unemployment rates in the entire United States at 12.2%. [2]  Freeport is located 25 miles due west of Rockford on the busy four-lane, limited access highway U.S. 20. 
 
On Forbes’ annual list of the most miserable cities, Rockford is usually there.  “Rockford has unusually high violent crime rates for a city of its size. Most notably, the city has the fourth highest rate of aggravated assault in the country, with 10.5 cases for every 1,000 citizens in 2010. During the same period, 20 murders occurred, almost double the number in 2000.” [3] “Property tax rates were fifth highest in the country in 2010. The median tax bill was $3,234 on home values of $136,000 for a rate of 2.4 percent.” [4]  Freeport is smaller and included in the greater Rockford unemployment data above. 
 
I was in Freeport today and took a few pictures downtown.  Most old cities have a ‘bad side’ of town.  I did not cherry pick bad areas for pictures.  The pictures are not taken in one of the far-worse looking slums of Freeport (most cities have a slum), but rather, these pictures are all in the downtown area.  In fact, on the southeast edge of downtown are two square blocks of hulking, long vacant factories, the one-time home of the manufacturer Rawleigh, which left some 45 years ago.  Companies come and go; what is concerning is when companies that left a half century ago are never replaced.  The main drag, Business US 20 has no less than four abandoned gas stations spread through various neighborhoods, including national names like Mobil and CITGO; this is a bad sign about the local economy.
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Freeport is a county seat (Stephenson County), which guarantees a certain amount of economic stability with the offices of courts, sheriff and other administrative government bodies.   Unfortunately, there are few prosperous commercial areas in Freeport.  Like most cities, there are some big box stores on the edge of town (Wal-Mart, Menard, K-Mart, Shopko, Staples) but even the retail edge of town has a surprising number of vacant retail properties.
 
The chart below shows how Freeport has been in decline, though it briefly turned around its population declines in the 1990s, before more recent declines.
 
 
Year Freeport Population
1970 27,736
1980 26,266
1990 25,840
2000 26,443
2010 25,638
  Chart by Author [6]
 
Freeport is located on a busy highway that runs to Rockford, before allowing one to take either I-39 or I-90 to Madison, Bloomington or most importantly, Chicago.  Freeport is about 110 miles from Chicago, but less than 80 miles from Chicago’s northwest suburbs.  Both Rockford and Freeport are located reasonably close to Chicago with good expressway access, which could be an economic selling point.
 
I should point out I do not mean to pick on Freeport, but rather to use it as an example of what has been happening in hundreds of small cities in high tax, pro-union “blue” states.  Freeport and its eastern neighbor, Rockford, Illinois have the unfortunate distinction of also being part of politically corrupt and ineptly governed Illinois, where the last two Governors reside in jail, at the same time both cities are a very short drive from more business-friendly Wisconsin and only an hour from right-to-work Iowa.  The unemployment rate in Wisconsin is much lower at 7.1% and Iowa even lower, just 5.6%! [1]
 
Those state comparisons mean something.  Certainly when you drive just 20 miles north of Freeport into the small city of Monroe, Wisconsin, the differences are great.  Monroe is more prosperous, has newer industrial plants and lacks the vacant buildings of a Freeport.  Iowa is a bit further, but there is a contrast between, say, similar sized Clinton, Iowa, on the Illinois border.  Clinton has several large, new industrial facilities, especially a newer complex from ADM. 
 

More vacancies, downtown Freeport, Illinois

I think people in Illinois need to be honest and ask themselves why the Illinois economy is so bad.  I know liberals who love to make excuses for Illinois.  They say Illinois is too cold.  Except Iowa, Indiana and Wisconsin are no warmer!   Lots of ‘cold’ states have better economies than Illinois.  Then they say Illinois is a better place culturally (meaning Chicago) than Wisconsin or Iowa or Indiana and companies should want to open up in Illinois because of, say, the wonderful Lyric Opera in Chicago.  The cultural benefits may be real but are not winning the race for jobs.  These same liberals are then stuck essentially telling people in Freeport and Rockford they are better off unemployed because Illinois is a very blue state and if companies won’t locate in Freeport or Rockford because of Illinois’ adversarial attitude toward commerce, so be it.  Live ‘blue’ or die.
 
Freeport’s people are friendly and I have no reason to think they are any less hard-working than anyone else.  I have known many, many people over the years from Freeport and Rockford and think well of them.  The area was long respected as a home to many highly skilled blue-collar workers.  There is some history there and a sense of civic involvement.  So why is the local economy so poor now? 

More vacancy on main drag (US Bus'n 20), Freeport, Illinois

Surely there are many reasons.  Not only Rawleigh but many other companies have left Freeport.  Newell-Rubbermaid company moved its corporate headquarters to Atlanta last decade, taking some good jobs away.  But, in the end, discussing why such and such a company left does not really do justice to the numbers.  People can make excuses.  But why is unemployment so much higher in Illinois, especially in small cities like Rockford and Freeport? 
 
One reason has to be how rarely anything new moves in.  A city like Freeport or Rockford seems to be focused on a sort of whack-a-mole battle to keep what it has from leaving; Illinois does this at its state level with tax incentives for whichever big Illinois employer is asking for them.  If economic development were a sport, Illinois would be accused of playing defense with no game plan for offense.  Driving around Freeport you see some sizable manufacturing operations: a tire plant, several Honeywell locations and a Vitners potato chip plant.  But you see nothing of note that has been added in recent years. 

Blue Economy, Downtown Freeport, Illinois

 
When you look at Freeport or Rockford, you see a once proud city of good citizens stuck in a deep economic rut.  Freeport keeps losing residents, which only makes a bad situation worse as city infrastructure stays the same but there are fewer taxpayers to support it.  I think the solution to Freeport’s problems lies largely outside of the city’s control.  The issue is the Illinois business environment.  It is fascinating how much better off nearby Wisconsin and Iowa are.  It is as if there are invisible “Do Not Cross” lines at the Illinois borders that tell employers to stay away.
 
I sincerely think one of Illinois’ greatest problems is Chicago’s political domination of the State.  Chicago can muddle through high levels of taxation and anti-business legislation because it has two of the world’s elite private universities (Northwestern & University of Chicago), cultural amenities that people will pay extra for, and Chicago is a services economy.  All the computer programmers or other young professionals at consulting firms or Groupon in Chicago are not impacted at all by pro-Labor Illinois rules.  But, the rest of Illinois does not have Lake Michigan as its front yard and lacks the universities, services sector, airports and the cultural amenities Chicago has.  The rest of Illinois simply cannot compete with other states.  Downtown Freeport and a sad number of other Illinois places show the result.  It impacts people like the owner of the three story Freeport commerical building who is asking only $30,000 for his vacant building (see second picture from top).  As do the legions of unemployed in Freeport, Rockford and other Illinois cities outside of Chicago. 

Another vacant storefront in downtown Freeport

 
[1] December 2011 state unemployment rates from http://www.bls.gov/lau/, retrieved 2/5/12.
[2] December 2011 data retrieved 2/5/12 from http://data.bls.gov/timeseries/LAUCA17466003
All pictures by author.
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  1. A commenter, Bill, posted on my “About” page, so I’ll repost it, and my reply, here:

    “Who told you that Rawleigh left Freeport 45 years.ago? They left in 1989-90. Exaggeration doesn’t help sell your thesis.”

    Submitted on 2012/12/22 at 1:17 am | In reply to Bill.

    “Bill, thanks for reading and for commenting.

    I had read of Rawleigh operations leaving in the 1960s for the South, but, after hunting around, I find they left that 400,000 square foot complex “in the 1980s” (see links below). If your 1989 date is right, that’s 23-24 years now. As one of the largest buildings in the center of Freeport, it shows how rough the local economy has been. That’s still a generation sitting vacant. It still is consistent with the thesis that Freeport, and towns like it, have faced difficulty replacing large employers that fail or leave.

    No exaggeration was intended, so thank you for placing the closure to the 80s, rather than the 60s. I appreciate your clarification.”

    http://www.wifr.com/home/headlines/Freeports-Rawleigh-Building-Proposed-Amtrak-Station–164220946.html http://www.wifr.com/home/headlines/Freeports-Rawleigh-Building-Proposed-Amtrak-Station–164220946.html
    http://www.rrstar.com/news/x1782334897/George-Gaulrapp-to-seek-third-term-as-Freeport-mayor

    What’s left of Rawleigh appears to be located in Rogers, Arkansas:
    http://www.superpages.com/bp/Rogers-AR/Rawleigh-Products-L0090617060.htm

  2. You say you do not cherry pick photos, but the last picture you took was a vacant storefront literally next the the Historic Hampton Inn of Freeport. The owners bought this 90 year old building in 2006 and developed it into one of the nicest Hampton Inn buildings by Hilton in the country. It was done for a price of $4.7MM in 2007. It is ranked in top 100 Hampton inns in a chain of 1,200.

    Also ‘right next’ to your picture was Main Street Bistro, a new high end restaurant in downtown Freeport that was a complete renovation and opened in March of 2013. You can get fancy food such as pork belly and local brewed beers there.

    Certainly seems to me that you picked only the examples that supported your theory of gloom and doom.

    • Sanjeev,

      Can you seriously look at downtown Freeport and consider it prosperous? You have cherry-picked because, yes, there is one operating hotel, the Hampton Inn, there. There isn’t much activity in downtown Freeport; what percentage of the storefronts are vacant? My article was written in March 2012, thus, it could not include your restaurant that opened a year later. Nor could it, for that matter, include the other side of the equation, including recent closures such as the K-Mart or the Sensata plant. Obviously, it was written at a point in time.

      My piece aimed to demonstrate what a “blue” economy looks like and, sadly, the picture is not pretty. You are just one of many who have taken exception to it. New restuarant or not, the unemployment statistics in Freeport, the Rockford-Freeport metro area and the state of Illinois are worse than the national averages. That is simply a fact, and one which was true when the article was written and remains the same today. Freeport is just one of many small Illinois cities that have suffered economically.

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