Illinois ; Federal Reserve District, 8th ; Economic development

Susan C. Thomson

English

Research Papers in Economics

T
hrough the 1980s, a railroad bridge, 
a two-lane highway bridge and a lock 
and dam, all decrepit with age, dominated 
the riverfront at Alton, Ill.  After the various 
agencies in charge slated all three eyesores  
for demolition, the city—25 miles north of  
St. Louis and across the Mississippi—set to 
work on a master plan to re-create the 
riverfront along lines that were more 
image-enhancing.  
In 1991, the plan was done, and the river-
front got its first new attraction—the Alton 
Belle, Illinois’ first floating casino.
Arriving as the city was fast losing its 
longtime industrial base, the boat came 
as a welcome shot of economic adrenalin, 
bringing the city hundreds of new jobs and 
a wellspring of new revenue from its local 
shares of state casino taxes.  To build on 
those gains, the city imposed its own sepa-
rate per-person tax on boat customers. 
Although the casino was privately  
financed, the next big riverfront improve- 
ment—a marina—received a hand from 
the city in the form of $5 million in bonds, 
repayable in part from marina revenue.  
Since opening in 1996, the facility has been 
expanded three times; nearly 300 boats can 
dock there now.
The latest and most ambitious riverfront 
projects yet are a $4.4 million amphitheater 
and a $2.5 million pedestrian bridge.  The 
amphitheater, which seats 4,000 under a 
canopy, opened in May with a Miles Davis 
jazz festival, named for one of Alton’s favor-
ite sons.  The bridge will span the railroad 
tracks and four-lane highway that separate 
the riverfront from Alton’s downtown; it is 
slated for completion in November.
The city financed the bridge and amphi-
theater with a combination of tax increment 
financing (TIF) money on hand and $5.5 
million in TIF-backed bonds, all made pos-
sible by a TIF district consisting of the city’s 
downtown plus some other commercial and 
industrial properties.  The city earmarks for 
development all real estate taxes collected in 
excess of the amounts in effect when the city 
enacted the district in 1994.
The city has used TIF money to spruce up 
several downtown blocks with new lights, 
sidewalks and plants.  Developers can also 
C O M M U N I T Y   P R O F I L E
Alton, Ill. by the numbers
PoPulation  ...................................................... 29,393
labor Force  .................................................... 13,968
unemPloyment rate ............................10.3 percent
Per caPita Personal income
        madison county ...................................... $33,585
  *  u.s. bureau of the census, estimate July 1, 2008
  **  HaVer (bls), June 2009
  ***  bea/HaVer, 2007
Top EmployErs
st. anthony’s Health center  ................................... 851
alton memorial Hospital ........................................ 842
alton community unit school District no. 11  ........ 835
argosy casino ........................................................ 549
american Water ..................................................... 530
sources: self-reported. 
     †  includes part-time 
*
**
**
***
†
†
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Alton Comes to Grip 
with Industrial Decline
Article and photos by Susan C. Thomson
The Argosy Casino brings not only a lot of cash but a lot 
of color to Alton’s riverfront.  In 1991, the casino became 
the first attraction since a master plan was drawn up to 
redevelop the stretch of the city along the Mississippi River.
get TIF grants of $7,500 for each new busi-
ness or residential unit created in downtown 
buildings, which are up to 150 years old.  In 
the past four years, 30 new apartments or 
condos and 10 new offices have resulted.  A 
number of new shops and restaurants have 
also opened in an area that fell on hard 
16   the regional economist  |  october 2009times after Alton Square Mall opened on the 
edge of town in 1978 and became the go-to 
local shopping place.
The city’s investments have turned the 
once run-down downtown and unsightly 
riverfront into what Brett Stawar, president 
of the Alton Regional Convention & Visi-
tors Bureau, describes as a string of pearls 
for tourists.
The necklace also includes the 15-year-old 
Clark Bridge, whose swooping yellow cables 
shine in the sun, making a photogenic 
background for the riverfront.  The four-
lane highway bridge was funded by the state 
and federal governments.  Another “pearl” 
is the new lock and dam, erected two miles 
downstream from the riverfront by the U.S. 
Army Corps of Engineers.  The complex, 
which includes a river-themed museum, 
logged 61,791 visitors in just the first six 
months of this year.
The convention and visitors bureau, 
which gets the biggest share of its funding 
from cuts of the city’s taxes on hotels and 
restaurant food and drink, also promotes 
Alton’s longtime historic and natural assets.  
These include the spot where Lincoln and 
Douglas last debated in 1858, several signifi-
cant Civil War-era sites, three picture-book 
19th-century residential neighborhoods 
on the National Register of Historic Places, 
and scenic river bluffs where American 
bald eagles come to feed every January and 
February.  The birds have grown into an 
industry, luring 10,620 tourists to eagle-
related events this year—more than double 
the number of two years ago.
As a measure of tourism’s growth, Stawar 
cites the 70,700 room nights Alton’s three 
hotels sold last year, a 9 percent uptick from 
2007.  He says they were quite often com-
pletely booked.
No count exists of the tourism jobs cre-
ated, and they are too dispersed for any 
single tourism employer to make the city’s 
list of top employers, now led by Alton’s 
two hospitals.  Both are expanding—Alton 
Memorial Hospital with a $45 million addi-
tion and St. Anthony’s Health Center with  
a $70 million one. 
“Health care has been great for the local 
economy,” says Philip S. Roggio, the city’s 
director of development and housing these 
past 20 years.  “Health care is generally 
recession-proof.” 
Many remnants of Alton’s industrial heyday mark the city.  
As in downtown and along the riverfront, the city is prepared 
to use TIF to redevelop these vacant sites.
Alton was a manufacturing town for most 
of the 20th century, but no more.  Glass-
maker Owens-Illinois shut down in 1983, 
Smurfit-Stone Container Corp. closed its 
paperboard mill in 1998 and Laclede Steel 
liquidated three years later.  From thousands 
at their peaks, the plants were down at the 
end to hundreds of jobs each—all lost.
After the state of Illinois declared the 
glass company’s 153-acre property a brown-
field, the city contributed $6 million in 
TIF-backed bonds to a private developer’s 
$18 million cost of cleaning up the site, tear-
ing down old buildings, installing utilities 
and turning it into a modern business park.  
In 2001, New Jersey-based American Water 
opened a call center in the park, choos-
ing it for its central U.S. location over five 
other sites in different states.  The center, 
which operates around the clock serving 
the utility company’s customers in 32 states 
and Ontario, has been steadily adding 
employees.
In 2003, a group of local investors bought 
Laclede’s former 400-acre site and, on part 
of the parcel, opened Alton Steel Inc., a 
maker of specialty steel bar products. 
Even with the new company and busi-
ness park, Alton has been left with acres of 
the regional economist  |  www.stlouisfed.org   17The Beall Mansion, built in 1903, is located on Millionaire’s 
Row in Alton.  The mansion is now a well-known bed and 
breakfast. 
 
Among the sites promoted to tourists is this monument to 
Alton’s Elijah P. Lovejoy.  He was an abolitionist publisher 
who was slain by a pro-slavery mob in 1837. 
 
The $4.4 million amphitheater opened in May on the river-
front.  In the background is the 15-year-old Clark Bridge, a 
landmark in the St. Louis area, thanks to its unusual cable-
stay design and bright yellow cable wrappings. 
 
Downtown is getting spruced up, thanks in no small part 
to tax increment financing.  These two buildings had been 
candidates for demolition; with TIF incentives, developers 
turned them into 11 apartments and two stores.
abandoned, falling-down factory build-
ings.  As with downtown and the riverfront, 
the city stands ready to use TIF money to 
improve these properties, Roggio says.
The city also has its redevelopment 
sights trained on Alton Square Mall, where  
vacancies, declining sales and deferred 
maintenance have taken their toll.  To turn 
it around, the city created a special taxing 
district, which added a cent to the mall’s 
sales tax rate.  The city has pledged up to 
$1.5 million of the extra money to the mall’s 
Texas owner for renovations.  As those 
proceed, the city is pursuing deals to add a 
12-screen movie theater to the mall and to 
lure a new hotel/conference center to town. 
“If we’re going to grow tourism,” says  
Stawar, “we have to have more hotels.” 
Downtown and the riverfront remain 
works in progress.  Downtown is still dotted 
with empty buildings, but more TIF grant 
applications are pending. 
On the riverfront, a floating restaurant 
has been for sale since closing more than a 
year ago.
At the casino, now called the Argosy, 
business is off—enough that the boat’s 
staff is down by about half from a decade 
ago, according to the general manager, 
Rich Laudon.  He blames the economic 
downturn, competition from newer casinos 
around the St. Louis metropolitan area and 
a statewide ban on public smoking that 
went into effect Jan. 1, 2008.  Nevertheless, 
Alton’s $5.7 million share of state taxes on 
the boat added up to about 22 percent of 
the city’s operating budget last year, and the 
total $414,000 from the city’s separate head 
tax on casino customers went into a fund for 
special city projects.
Meanwhile, on the strength of a $200,000 
grant from the National Scenic Byways 
Program, plans are afoot for a new river-
front attraction—a “flood memorial plaza.”  
With a sculpture, fountain and exhibits, it 
will be dedicated to the heroics of Alton’s 
citizens in times of rising Mississippi waters.   
Construction could start next year. 
Dale Blachford, president of Liberty Bank 
and an Alton resident for only five years, 
says that, unlike some locals, he sees “more 
of the positives than the negatives” about 
the city.  Overall, he sees a city that has been 
slowly and successfully “reinventing itself” 
these past 20 years and, of necessity, contin-
ues to do so.  “It takes time,” he says. 
Alton Mayor Tom Hoechst also takes a 
long view, focused on the future.  “We’re 
still suffering from the old days when the 
industrial jobs were so plentiful,” he says.  
“Those jobs are gone, they’re not coming 
back and people have to get used to that 
fact.” 
Susan C. Thomson is a freelancer. 
18   the regional economist  |  october 2009

Alton comes to grip with industrial decline

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Alton comes to grip with industrial decline

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