US great Lakes region pins economic hopes on water

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Associated Press

Posted on May 27, 2013 at 7:00 AM

Updated Monday, May 27 at 8:01 AM

MILWAUKEE (AP) — The U.S. Great Lakes hold nearly one-fifth of the freshwater on the Earth's surface. But some of the saddest, most bedraggled urban wastelands sit on the shores of the vast inland seas sometimes called America's North Coast.

After the collapse of the region's heavy manufacturing unleashed an exodus of jobs to the sunny southern regions, one proposal after another for revival fell short.

But drought has gripped the southern Sun Belt in recent years, and federal scientists predict a worsening situation there if climate change models prove accurate. Worried southern leaders there are floating increasingly radical proposals, from billion-dollar pipelines traversing hundreds of miles (kilometers) to creating artificial lakes.

As growing water scarcity casts a shadow over the economic boom in warmer states, many in the long-scorned northlands are hoping they can finally make their abundance of freshwater a magnet for businesses and jobs that are now going elsewhere. Some say the idea is a perfect nexus of opportunity and timing, while others deride it as just another longshot attempt by a cold and downtrodden region to reverse history.

It's all part of a broader effort unfolding across the Great Lakes region to regain lost prosperity by developing a "blue economy" — a network of industries that develop products and services related to water, from pump and valve manufacturers to resorts offering vacations along redeveloped lakeshores.

In the eight states along Lakes Superior, Huron, Michigan, Erie and Ontario, organizations devoted to the venture are springing up. Universities are establishing freshwater science and engineering programs. Businesses are developing products such as advanced filtration systems for sale in countries where water isn't just scarce, but also polluted.

Milwaukee has taken a pivotal role from its perch beside Lake Michigan, with $83.5 million in public and private money budgeted over the next year to support water-related businesses and research.

One century-old former factory will soon re-open as a hive of business experimentation swarming with scientists, engineers and entrepreneurs. It will house labs and startups, including one devising a system for cultivating algae as biofuel, another producing a type of pavement that lets rainwater seep into the ground instead of flooding sewers.

"We all recognize that water has become more and more of a precious commodity," said Tom Barrett, mayor of Milwaukee. "We have to do a much better job of promoting it."

Experts said that in order for the "blue economy" to take off, the region must remake its 10,000 miles (16,100 kilometers) of Great Lakes shoreline and many rivers and inland lakes, both for tourists and for service companies that want a beautiful setting.

After the boom times of the early and mid-1900s, the steel plants, paper mills and auto factories that employed millions along the lakes left behind blight. The Lake Michigan city of Gary, Indiana, is riddled with the hulks of abandoned buildings and the Grand Calumet River bottom is caked with a 20-foot (6-meter)-deep layer of gunk including toxic PCBs.

An Obama administration initiative has pumped more than $1 billion into Great Lakes environmental cleanup, and a regional partnership has raised hundreds of millions to beautify Gary's industrial waterfront.

Great Lakes proponents say their region is overcoming its environmental problems, while water-starved southern states will only face more droughts.

"I don't like to get into an us-versus-them situation, but the drought in these other locations is going to get worse and worse and what we have to offer is going to get more and more attractive," said David Ullrich, executive director of an organization representing the Great Lakes region's mayors.

Sun Belt leaders, while acknowledging the problem, scoff at the idea of companies choosing the Midwest instead. They say they're already working on solutions. Texas voters in 2011 authorized a $6 billion bond issue for water infrastructure, including building more than two dozen reservoirs in coming decades.

Water availability is just one factor that influences where businesses locate, said Jason Morrison of the Pacific Institute, author of a report on likely economic fallout from a drier climate. Still, he acknowledged, the outlook is disconcerting.

"It's pretty certain that water-related risk for business will increase over the long haul in more places," he said.

Al Henes, who runs a brewery and pub in Flagstaff, Arizona, has waterless urinals and reuses water in his beer-making operation, but worries about the future as housing developments and golf courses keep springing up. Even so, he said, he's not ready to forsake his beloved canyon country's stunning scenery and outdoorsy lifestyle.

"You guys get a little colder up there," Henes said dryly. Recalling childhood winter visits with his grandmother in Michigan, he added: "Some of my words would just freeze in my mouth and fall on the ground and shatter."

Milwaukee reflects the grandeur of the lake region's past as well as its decline and the quest to rebuild. Some warehouses and storefronts still sit empty, and the remnants of beer giants Schlitz, Pabst and Blatz have been turned to other uses.

Though the once-dominant brewing industry is a shadow of its former self here, local leaders are newly mindful that the beer industry, which used huge volumes of water, attracted other water-related businesses that still remain vibrant. Water technology— pumps, valves and more— generates $500 billion a year worldwide and is growing rapidly, said John Austin, director of the Brookings Institution's Great Lakes Economic Initiative.

The Milwaukee-based Water Council, a research and networking organization, now has more than 100 members, including the brewer MillerCoors. The technology center is expected to host a half-dozen startups at a time, with frequent turnover as companies grow and move to bigger locations.

John Gurda, a local historian, said it's about time Milwaukee gave up chasing the same high tech medicine and computer software companies sought by every other city.

"The strength of this (water-oriented) strategy is that it's playing to Milwaukee's natural and historical strengths," he said.

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Associated Press writer John Flesher contributed to this report.

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