As GE continues to fade, Schenectady moves on Efforts to reduce reliance on city's former economic anchor started in 1960s

As GE continues to fade, Schenectady moves on Efforts to reduce reliance on city's former economic anchor started in 1960s

Sunday, Oct. 21, 2018

SCHENECTADY – The concrete structure near where Lower Broadway dead-ends at the railroad tracks is something of a historical marker for the General Electric Co., which at one time was the largest single employer in the region.

Now cemented shut, this underground tunnel once siphoned blue-collar employees between the GE's sprawling River Road main plant downtown and what was then Kruesi Avenue, where many enjoyed a cold beer after work at one of the bars that lined the block.

The tunnel and three pedestrian bridges that span Route 890 and Edison Avenue are vestiges of more prosperous times when the energy manufacturing giant with the iconic GE sign boasted upwards of 40,000 employees during World War II and was recognized globally for its ingenuity. Schenectady became known as "The City that Lights and Hauls the World" thanks to GE and the American Locomotive Company.

Today, GE is down to roughly 4,000 employees in Schenectady.

The conglomerate recently fired CEO John Flannery after 14 months in that post and replaced him with Larry Culp.

Todd Alhart, a GE spokesman, said in a statement that "GE is proud of its innovation legacy and heritage in the Capital Region."

"We have launched a number of products in wind generation and energy storage and continue to set new records in power plant efficiency to meet the needs of a rapidly changing energy landscape," he said, adding that many of the fundamental technologies supporting these platforms were developed at GE's Global Research Center in neighboring Niskayuna. "GE is a 126-year-old company that through all its ebbs and flows, has always found ways to adapt and thrive."

Adapt and thrive — for the city of Schenectady, that meant not totally relying on GE. City leaders had the foresight in the 1960s to start heading in that direction. Chris Hunter, vice president of collections and exhibitions at the Museum of Innovation and Science (miSci) said Schenectady county leaders in 1960 started a program that was designed to attract new businesses and reduce their reliance on GE and Alco. Many development programs were established in the ensuing years, with the latest being Schenectady Metroplex Development Authority, the county's main redevelopment arm.

The city now is seeing significant results of those 50 years of development programs, business owners and elected officials say.

Schenectady Mayor Gary McCarthy is among those who point to the revitalized downtown with a variety of restaurants and a casino with a residential-retail waterfront building project on the former Alco site as proof that the city has rebounded from GE's downsizing and the closing of many retail stores downtown.

"We've diversified the base here so that it's again not relying on GE," said McCarthy. "It's still a significant employer, but if you look at the total workforce within Schenectady or the Capital Region, it represents a small portion, so these incremental adjustments that GE is making now they don't have the dramatic impact they had 15 or 20 years ago."

GE's heyday

The rise and fall - and what many see as the rise again of the city of Schenectady - started with a city within a city.

"The plant was almost like a city in itself," said Hunter, adding that the roughly 316-acre facility had an employee store, hospital, fire and police department.

Another 320 acres of GE property are located in neighboring Rotterdam. The GE Global Research campus in Niskayuna sits on about 550 acres.

Albert P. Jurczynski, who grew up on Wylie Street in Schenectady's Hamilton Hill neighborhood not far from the plant and was later elected mayor in 1996 after serving three terms on the City Council, recalls GE's heyday well.

His father and two older brothers all retired from GE.

"I can remember when the GE whistle would go off and you would have droves of GE employees that would walk down Erie Boulevard and go into the downtown for their lunch hour," said Jurczynski. "There'd be so much traffic that they would actually have to utilize these pedestrian bridges to bring them over the traffic."

In those days, Jurczynksi, now 62, said it wasn't uncommon for the parking lot at GE, which he recalled extended near the edge of Route 890, to be filled with cars.

On the business side, Hunter said GE was both a major manufacturing facility churning out everything from medium- and large-size motors to large steam turbine generators and gas turbines.







Clockwise from top: Former Schenectady Mayor Al Jurczynski, shown in 2003, says "I can remember when the GE whistle would go off and you would have droves of GE employees that would walk down Erie Boulevard and go into the downtown for their lunch hour." (Steve Jacobs / Times Union) "The (GE) plant was almost like a city in itself," said Chris Hunter, director of archives and collections at the museum of Innovation and Science in Schenectady. He is standing in front of GE's first electric car. (Skip Dickstein/Times Union) Restaurateur Angelo Mazzone says of GE: "They used all our facilities, we did catering for them, it was just a whole different company back then than it is now." (Cindy Schultz / Times Union) Former Union College president Roger Hull says the GE tract is a "prime piece of real estate" that the city or another company could redevelop. (Philip Kamrass / Times Union )

The plant was also a "product incubator" where refrigerators, televisions and radios were developed and then assembled or produced in other places, Hunter said.

And business was so good that GE took over most of the Alco buildings on Erie Boulevard — now home to the Rivers Casino & Resort at Mohawk Harbor complex — when it closed in 1968.

GE at one point was so invested in Schenectady that a group of executives bought property from Union College in 1900 and created the GE Realty Plot neighborhood for company executives and engineers to live.

Slashed workforce

But over several decades, GE steadily slashed its workforce in Schenectady, shuttered some of the buildings and drastically reduced its portfolio. These business decisions forced city and county leaders and development officials to plan for a future where the city's biggest taxpayer was curtailing its operations and in some cases moving them out of state.

In 2009, GE and Metroplex, negotiated a payment in lieu of taxes agreement to set the city portion of the main campus at an assessment of $65 million for 10 years starting in 2010. There's also a PILOT deal in place at the Rotterdam site.

At its peak during the World War II era, GE had an "artificial high" of about 45,000 employees in Schenectady, Hunter said.

Those numbers gradually started to dwindle through the 1970s and accelerated during the time from 1981 to 2001 when Jack Welch served as GE chairman and CEO.

Welch was brought in by the board of directors with a mandate to change the company culture and help GE reinvent itself to better deal with overseas competition, said Hunter.

It was a continuation of a business philosophy GE had adopted in the 1950s to make it less dependent on any one manufacturing plant.

While conceding that Welch "did great things with the GE company," Jurczynski said his strategy was hard on the Electric City.

"Back in the mid-80s, GE was downsizing big time in Schenectady, shipping jobs off to Greenville, South Carolina," said the former mayor. "They were announcing layoffs of like 1,200, 1,500, and it wasn't just a onetime shot, it was like every other month."

He surmised that Schenectady's reputation of being a strong union town didn't sit well with Welch and other GE bosses.

"When he got done, the buildings were standing and the people were all gone," said Jurczynski .

Gear up for tomorrow

In 1960 Schenectady county leaders started a Gear Up for Tomorrow Schenectady (GUTS) program that was designed to attract new businesses and reduce their reliance on GE and Alco, Hunter said.

At the same time, the federal government was offering grants aimed at urban renewal and redevelopment, he added.

"A lot of the earliest ideas centered around 'Let's take something like a suburban shopping mall and let's plop it in downtown,'" he said. "There was even a plan in the early '70s to demolish Proctors and build a shopping mall in its place and they would have had an elevated walkway going across State Street from the Proctors side to the Center City side."

Ultimately it was the benevolence of a business magnate that changed the fortunes of downtown Schenectady.

Neil Golub, whose family runs Price Chopper, said "a good part of GE's decision to move away from Schenectady was a result of the labor strife."

But other factors sucked the life out of Schenectady's downtown, which was rife with abandoned and vacant buildings that could be acquired on the cheap.

Jurczyski acknowledged that "downtown looks great now but it's a different downtown," reeling off names of retail stores like Wallace's, W. T. Grant, Woolworth and Kresge that are now all gone but used to be staples of downtown.

"There was definitely an impact from GE but you also had people moving out to the suburbs and just as people are moving out to the suburbs, they built the bypass, Interstate 890, to take people around the city," said Hunter.

Golub recalled how his father decided in the late 1980s to put up $1 million of his money in hopes of bringing people and businesses back downtown and "help Schenectady get back on track" with a more strategic development plan.

The late Bill Golub urged his son in the early 1990s to work with then-Union College president Roger Hull on what became known as Schenectady 2000.

"It was a dying community, particularly the downtown," said Neil Golub, adding that people flocked to shopping malls instead of patronizing businesses downtown. "The goal was to come up with something that would create a renaissance in Schenectady with a funding source by the year 2000."

Those efforts led to the creation of Metroplex.

"Everyone is trying to keep GE here, which is certainly understandable, but a lot's happening and that's where Metroplex comes into play where different businesses come in, but it's a hard thing to do to try and replace GE," said Hull, who resides in the GE Realty Plot and has made two unsuccessful bids for mayor. "It's great to have the restaurants and to have the activity we have downtown, that's wonderful and I support it, but that doesn't really deal with 6,000 jobs that have evaporated."

Investing in the city

Restaurateur Bobby Mallozzi, whose family owns Johnny's and Villa Italia in the heart of downtown Schenectady, echoed the mayor's sentiment.

"Schenectady is a very resilient city and very adaptive and they've done an amazing job recovering from what's been a very challenging post-GE boon Schenectady," he said. "I think that we're fortunate enough to have prominent business people who continue to invest and reinvest in the city, so I look forward to the future of Schenectady with great optimism, whether GE has challenges or not."

Restaurateur Angelo Mazzone has a different take on the job losses at GE.

He recalled that about 20 years ago Mazzone Hospitality, which owns Aperitivo Bistro restaurant in downtown Schenectady, did a tremendous amount of business with GE, most of which since then has dried up.

"They used all our facilities, we did catering for them, it was just a whole different company back then than it is now," he said. "They've cut back on everything and they're not even part of the community as far as I'm concerned. "

Despite that, Mazzone, who also owns the Glen Sanders Mansion in Scotia, said as a businessman himself he understands that certain decisions GE has made are to ensure the business survives.

Jurczynski recalled in the early 1980s that GE used to hold an annual breakfast that attracted hundreds of people in the business world and community who wanted to hear the company's plans for the upcoming year. Jurczynski said the event was eventually discontinued.

"They're just not as engaged with Schenectady as they used to be," he said.

As with most manufacturing plants, the possible impact of certain chemicals on the environment leads to debates about if a company should be held liable for pollutants even after it donates or sells that property.

Hull said the GE tract is a "prime piece of real estate" that the city or another company could redevelop.

"I believe that GE is willing to clean up that property to any standard the state wants in exchange for a hold harmless letter," said Hull, adding he feels that way because the state signed off on the chemicals GE used at the plant.

The New York state Department of Environmental Conservation said the GE facility has chemical bulk storage tanks registered with DEC, which are routinely inspected to ensure they comply with state regulations.

DEC spokeswoman Erica Ringewald said the state agency is "strictly overseeing the cleanup of this site under the State Superfund Program to protect public health and the environment."

The DEC expects the cleanup to be done in 2019 after which it will reassess the site's Superfund status.

DEC has not received any recent complaints regarding the site.

Despite the ups and downs, McCarthy said his administration is committed to maintaining a healthy business relationship with GE.

He noted that the city provides fire and emergency medical services to the sprawling facility and that GE has played an instrumental role lending its expertise and professional experts in the city's ongoing efforts to become a "smart city."

The Mohawk Harbor Marina in Schenectady is the signature element of a $480 million mixed-use development that includes 50 boat slips, amphitheater, and kayak launch. (Will Waldron/Times Union) The Mohawk Harbor Marina in Schenectady is the signature element of a $480 million mixed-use development that includes 50 boat slips, amphitheater, and kayak launch. (Will Waldron/Times Union) Photo: Will Waldron, Albany Times Union Photo: Will Waldron, Albany Times Union Image 1 of / 38 Caption Close As GE continues to fade, Schenectady moves on 1 / 38 Back to Gallery

"I want to continue working with GE to make sure that facility is globally competitive," said McCarthy. "These are cyclical trends that have happened many times before in the history of GE and other major corporations."

Neil Golub agrees.

"Schenectady can stand on its own two feet," said Golub.