REGIONAL REPORT / BOOM IN THE MIDWEST : Once-Sleepy Cities Wake Up to New Prosperity : Three urban centers illustrate the benefits of a diversified economy while more industrialized areas falter.

Each morning, Sara Weidman drives an hour and 15 minutes from her home in the small industrial town of Muncie, Ind.--past countless cornfields and a blur of suburbanshopping malls--to her secretarial job in downtown Indianapolis.

But Weidman’s cross-country commuting days won’t last forever; soon, she will be moving to one of the outer suburbs of Indianapolis, where the drive-times are shorter and the jobs more plentiful for her husband.

“The opportunities are much better here than in Muncie, and the pay is a lot better too,” says Weidman. “And I’m used to the amenities of the big city now. It’s so much easier to shop here.”

Today, Weidman’s Indianapolis really is a big city, with an international reputation as an amateur sports center and a gleaming, newly developed downtown that has become a hub of regional economic activity.

A NEW MIDWEST

But Indianapolis is hardly alone among Midwestern cities that have wiped away the rust. Throughout the region, medium-sized cities ranging from Columbus, Ohio, in the east to Des Moines and Minneapolis in the west, have transformed themselves from sleepy fly-over towns into some of the hottest new metropolitan areas in the nation.

Unlike the Midwest’s older, more heavily industrial cities--places like Cleveland and Detroit, which suffered horrendous losses in jobs and population during the 1980s--these cities, centrally located and with more diversified economies and large service and governmental work forces, grew steadily throughout the last decade.

They also reaped enormous benefits in new investment and construction during the national recovery of the mid-1980s, especially after developers began to shy away from overbuilt Sun Belt markets. In addition, corporations searching for a way out of sky-high costs in New York and other big cities began to move more and more operations and jobs to these Midwestern towns.

The result has been growth rates that have far outstripped the national average.

More than other cities, Indianapolis, Columbus and Des Moines--all state capitals and regional business hubs--seem best to exemplify the new Midwestern urban centers. Here is a quick look at how each of the three cities has been transformed:

INDIANAPOLIS

With the Indy 500 in its back yard each Memorial Day, Indianapolis has always been a sports mecca for one weekend a year.

But now, Indianapolis has found that its efforts to expand its base in sports beyond the 500 has led to a new reputation as an amateur sports capital, enhancing economic recruitment efforts and providing a new focus for downtown development.

The city’s risky gamble on sports--it built the Hoosier Dome downtown before Indianapolis had a football team to play in it--also shows how dramatically the new Midwest is moving away from heavy industry to shore up its economy.

“We had some half-baked ideas that actually came to fruition,” jokes Mike Higbee, Indianapolis’ director of economic development. “Ten years ago, when we said we wanted to be a center for amateur sports, who would have thought we could really do it?”

But with an average jobless rate of just 3.9% in 1989, it’s hard to argue with Indianapolis’ successful drive to recast its economy.

To be sure, sports has played only a small role in job creation. Local banks, the state government, and, most notably, expansion at Eli Lilly, the big pharmaceutical company based downtown, have done more to fuel growth in the city center.

But sports have still provided the city with a new spark that didn’t exist before. The nonprofit Indiana Sports Corp. first hit it big in 1987, when it lured the Pan American Games to downtown Indianapolis. The city has also built downtown ice rinks and a bicycle track, and has lured seven national sports associations, including those governing track and field and rowing, to move their headquarters to town.

COLUMBUS

For decades, Columbus never seemed like much more than home to Woody Hayes and his Ohio State football team. Yet today, Columbus has spawned an entirely new service economy, one based on specialty retailing and franchising, two of America’s hottest businesses in the 1980s.

Columbus has long been considered an ideal consumer test market, because it is so typical of the rest of America. So it’s no wonder that retailing entrepreneurs have emerged from the city. In fact, Columbus is now a sort of Silicon Valley of retailing: It is home to, among others, the headquarters of The Limited department store chain, Consolidated Stores, a large close-out retailer, and Wendy’s, Sisters Chicken, Racks, and Bob Evans Farms restaurant chains.

The growth of new food and retailing industries have offset losses in the local defense industry; Rockwell International was forced to shut down a major B-1 production operation here. Now, The Limited has a local work force of 3,700, while Wendy’s employs another 2,000, and the unemployment rate has declined to just 4.8%.

Another boost has come from Columbus’ successful campaign to lure corporate headquarters from bigger cities, arguing that Columbus had the easier lifestyle that executives crave. The city’s biggest trophy: the headquarters of American Electric Power Co., a big utility holding company that moved from New York City with 2,100 jobs.

Another new and unexpected force has come from Japanese investment. Honda has its massive U.S. manufacturing operations right outside Columbus, and, with 9,000 workers, is the largest private employer in central Ohio.

DES MOINES

Few states suffered more than Iowa from the economic shocks of the 1980s. The postwar era’s worst farming depression, coupled with a slump in manufacturing, took a devastating toll on incomes, jobs, and most importantly, the psyche of the entire state. Iowa was one of the only states in the nation that actually lost population during the decade.

Yet throughout it all, Des Moines, Iowa’s capital and largest city, remained virtually untouched. And today, with a metropolitan population of about 400,000 and an unemployment rate of just 3.7%, Des Moines has an urban economy that is doing as well as any area in the nation.

“We’ve been pretty much distanced from the farm economy,” says Scott Stricker, head of economic development for the city government.

With $1 billion in new downtown development over the past decade and a sky-walk system that allows downtown office workers to avoid the worst of winter, Des Moines today reminds many of a smaller version of Minneapolis.

Des Moines’ role as a center for the insurance industry has helped divorce it from the Farm Belt’s problems. It is home to 60 insurance companies--more than any other town in America except Hartford, Conn.--and many of those firms are right downtown. In addition, the state government’s presence has protected the local economy.

But some economists believe that Des Moines’ success has largely come through profiting from rural Iowa’s woes. The near collapse of many of the state’s smallest towns over the last decade prompted more and more rural residents to look to Des Moines for shopping, medical care and entertainment, buoying Des Moines-area businesses.

OUTLOOK

As the Midwest becomes dominated by cities with high growth, low unemployment, clean looks and frenetic construction activity, the flip side is the well-documented decline of the rural economy in the Great Plains and Midwest.

“Cities like Des Moines and Indianapolis are draining the outlying areas of people and services,” notes Mort Marcus, director of the Indiana Business Research Center at the University of Indiana.

The booming mid-sized towns, meanwhile, are becoming the focus of growth for entire states, powerful magnets that are luring more and more service jobs and people and gaining all the attributes of Sun Belt cities. All, that is, except as much sun.