A bet to turn rust into tourism gold

This is the town that helped build America.

In its heyday, 30,000 workers here tended roaring furnaces and huge foundries, making the steel used in hundreds of World War II warships, the Golden Gate Bridge, the Empire State Building and other landmarks.

But Bethlehem Steel withered and died in the 1990s under the onslaught of foreign competition, leaving the mill to rust along the Lehigh River.

Now this city of 70,000 is trying to turn the 124 acres of desolation into a tourist attraction -- complete with a casino, museum, concert hall, shopping mall and hotel.

Public and private groups have joined forces in an ambitious plan to revitalize the crumbling buildings and decrepit equipment that, depending on your point of view, are iconic or an eyesore.

The first project, the Sands Casino Resort Bethlehem, opened in late May with 3,000 slot machines and plans to add 2,000 more by Thanksgiving. Constructed atop the mill’s former ore yard, it is like no other casino.

There are no chandeliers, Roman statues or gushing fountains. Instead, the casino features raw steel I-beams, exposed brick, a gabled roof with skylights, thick chains and gears, and dangling lights that glow orange like burning ingots. The Sands sign out front hangs on a 20-ton crane once used to haul iron ore.

“We wanted the look and feel of what was here,” said Robert DeSalvio, casino president. He said he was also committed to preserving the mill’s blast furnaces and 20-story-high smokestacks.

The new facility “blends in pretty well,” said Joseph Koch, who should know. He began working at “The Steel,” as locals called the mill, when he was in high school and stayed on site for 32 years.

His father spent 42 years in the mill. Uncles, neighbors and friends worked there too.

“I can still sometimes hear them when I walk though the old buildings,” said Koch, 62, chief of construction safety at the casino. “I don’t mean there are ghosts. But I can hear them in my memories.”

Life in this traditionally blue-collar city hasn’t been easy for many residents since steel went away.

“I’ve been laid off seven times since 2001,” said David Faust, 31, who hopes he has found steady work now as a slot machine technician. “This area really needed jobs.”

Pennsylvania legalized slot machines in 2004. The Legislature is weighing whether to also permit table games like poker and craps, but that doesn’t seem likely this year.

In many ways, the Las Vegas Sands Corp. is betting its own future on Bethlehem. Overloaded by debt, the company has seen its stock nose-dive from a high of $148 a share in 2007 to single digits today.

Sands has invested $743 million here. When the economy tanked last fall, the company halted construction of a convention center, hotel and shopping mall that will adjoin the casino. For now, their steel skeletons don’t look out of place.

“We will resume construction as soon as they free up the credit markets,” said DeSalvio, who hopes to lure gamblers from Philadelphia, New York and northern New Jersey -- which are closer to Bethlehem than to Atlantic City, N.J.

One such gambler, Joe Penyak, 65, a roofing contractor from South Plainfield, N.J., nursed a beer one recent afternoon at the casino’s 133-seat Molten Bar. He was the only customer.

Penyak and his wife visit Atlantic City casinos once a month, he said, and he prefers the seaside resort’s glitz and glamour. “Here, you’re in an old steel mill,” he said. “Down there, you’re in a palace.”

Inside the Irish pub, Fred Potthoff, an off-duty police officer from nearby Easton, Pa., shared a drink with Carmen Perez, a surgical technician. They like toned-down Bethlehem more than Atlantic City, where slums abut the casinos.

“This is closer, it’s cleaner, and it’s nicer,” Potthoff said.

Jeffrey Parks, president of ArtsQuest, a Bethlehem nonprofit that promotes the arts, said he had been “all for tearing down the old buildings” when the plant first closed. But he changed his mind after he saw how cities in Germany’s Ruhr Valley found creative uses for abandoned mills and factories. His group has raised the money to start construction this fall of an arts cinema, 600-seat music hall, community theater and other facilities by the towering blast furnaces.

“The danger is the town will get known for the casino and not for the history and culture,” Parks said.

But Megan Fehrer, 22, a cocktail waitress, figures steel is in her blood. The redevelopment projects pay homage to the storied mill where her grandfather and uncles toiled, she said.

“There’s real pride here again,” she added. “The Steel was the soul of Bethlehem.”

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bob.drogin@latimes.com