Built to last, bought to bulldoze

How centuries of tension between haves and have-nots led to a battle to preserve a neighborhood's soul.

By Sara K. Satullo and Nick Falsone

Published May 31, 2022

old bethlehem new Bethlehem
Library of Congress, Prints & Photographs Division and Saed Hindash | For lehighvalleylive.com

South Bethlehem’s never been mistress of its own destiny.

Founded in 1865, the borough, tucked between South Mountain and the Lehigh River, exploded to meet the industrial demands of Bethlehem Steel Corp. and the Lehigh Valley’s massive garment industry. The gritty town merged with north Bethlehem to form the modern city of Bethlehem in 1917, losing much of its agency after an aggressive consolidation campaign led by Steel Chairman Charles M. Schwab.

Today, South Bethlehem has risen from its industrial ashes — it’s the funky younger sibling of the more staid, historic Moravian northside. But still its fate is wedded to a greater power. The ambitious expansion of Lehigh University increasingly threatens the neighborhood’s history and legacy as an affordable first stop for immigrants and newcomers.

At the heart of the conflict is housing: Lehigh’s growth has spurred a boom of student housing investors, who gobble up blocks of residential housing, inflating real estate prices and leaving fewer homes for locals.

Yet to fully understand the tensions currently playing out — and the high stakes of preserving the neighborhood’s core — we need to journey back nearly three centuries. It’s a story of paradise gained and lost, again and again.

And it’s a story playing out in communities like this one all across the country, where history and ethos are so often the first things to be steamrolled in the nonstop rush into the future.

“This is something special we should fight to hold onto down here,” said Matt Hengeveld, who owns Lit Coffee Roastery and Bakeshop, an eclectic coffee shop frequented by locals in the heart of South Bethlehem’s business district.

this is an invisible spacer

Bethlehem’s story starts in 1741 when Moravian missionaries establish a closed religious commune in north Bethlehem. Short on cash in the 19th century, the Moravians sell land south of the Lehigh River to the Southside’s first settlers, who discover the zinc that will alter the region forever. In 1861, Bethlehem Iron Co., the predecessor of Bethlehem Steel Corp., breaks ground on its first blast furnace and the first iron is puddled in 1863. Unskilled laborers will soon descend upon the area, seeking out the promise of work and stability.

map of Bethlehem 1873 Photo courtesy of Bethlehem Area Public Library

It’s now 1865 and we’ve zeroed in on 57 acres at the foot of South Mountain — land that industrial pioneer Asa Packer donates to establish Lehigh University. Believing an educated workforce crucial to the economy, the railroad and coal tycoon gives $500,000 for the school. The original borough of South Bethlehem, first known as Augusta, incorporates the same year, with more than 1,500 residents.

Christmas Hall in 1880 Special Collections, Lehigh University Libraries

Lehigh’s first class is held in Christmas Hall, a retrofitted Moravian Church on Packer Avenue. Packer Hall opens as Lehigh’s first building in 1868. In 1875, Packer donates another 52 acres to the school. The same pattern will play out repeatedly over the next 150 years, as Lehigh continues to absorb more land to meets its ever-expanding ambition.

Aerial view of campus from 1886 Special Collections, Lehigh University Libraries

It’s the late 1870s. Industry is booming. Immigrants from around the world are pouring into the United States. The first Slovaks and Hungarians arrive in South Bethlehem. The Southside population grows from 3,556 people before the mass migration to nearly 20,000 by 1910.

todo Courtesy of Lehigh University

South Bethlehem’s melting pot comes to a rapid boil as Irish, Slovaks, Magyars, Wends, Poles, Italians and Germans – all living in isolated communities and working together among the 4,000 employed at the Steel – move in. They share a common interest as boosters of Lehigh’s sports teams after Taylor Field opens in the 1913-14 school year.

aerial view of campus Courtesy of the Hagley Museum and Library

With World War I being waged, the demand for workers in South Bethlehem keeps increasing. The latest wave of immigrants arrive from Russia, Ukraine and Greece. New areas of the city are developed for housing to accommodate them. The new arrivals, like those before them, center their communities around churches.

women working from 1918 Courtesy of Lehigh University
old bethlehem new Bethlehem
Walker Evans, photographer, Library of Congress, Prints & Photographs Division and Saed Hindash | For lehighvalleylive.com

They’re not the last immigrants, though. By 1924, the community continues to evolve — Steel turns to Mexico for workers after the U.S. curtails European immigration. After the Great Depression, Puerto Ricans first come to the Lehigh Valley as seasonal contract farm workers. Many of them eventually take jobs in the Steel’s blazing coke works and in garment mills. The roots they put down go deep. Today 42% of Southside residents identify as Latino.

Plant in northampton heights 1931 Courtesy of the Hagley Museum and Library

Employment at the Steel’s flagship plant hits an all-time high of 31,523 in 1943 as the company serves as the nation’s top military contractor during World War II. The GI Bill causes a nationwide boom in university enrollments that fuels Lehigh’s latest expansion efforts. Yet questionable development practices abound. “Lehigh began its expansion by purchasing land in the neighborhood using ‘straw buyers’—for example, the secretary at the university’s law firm—to obscure the university’s interest in acquiring land for expansion and keep property-owners from raising prices,” a historical account published by the university says.

old neighborhood street view Courtesy of Lehigh University

The local government also plays a role in absorbing what would become known as the Lost Neighborhood. Bethlehem Redevelopment Authority agrees to request federal money to buy still more properties. Nearly 700 residents are displaced. Another major displacement of residents is on the horizon, though this one has little to do with Lehigh.

old neighborhood Courtesy of Lehigh University

Like other American cities, Bethlehem in the 1960s buys into urban renewal — the federally funded leveling of properties to modernize, improve infrastructure and revitalize commercial districts. Steel and the city start a campaign to “eliminate slums” around its plant as the advent of the automobile allows workers to move further away, South Bethlehem Historical Society archives show. Northampton Heights, where many people of color who work at the plant live, is erased to make way for a new basic oxygen furnace. Nearly 500 residents are displaced.

Kids in Northampton Heights Courtesy of South Bethlehem Historical Society
old bethlehem new Bethlehem
Walker Evans, photographer, Library of Congress, Prints & Photographs Division and Saed Hindash | For lehighvalleylive.com

Tension builds between Lehigh and South Bethlehem’s residents in the years after the Lost Neighborhood land is developed in another era of expansion that includes the university becoming coeducational in 1971. City officials pressure Lehigh to build the six-story Brodhead House apartment building in 1979, rather than lease 36 homes as student housing. Lehigh also renovates homes in Warren Square to accommodate more students. Yet Lehigh draws criticism from community leaders for its isolationist philosophy, most clearly signaled in its decision to site all its new buildings toward South Mountain.

South Mountain backdrop PennLive.com file photo

While Lehigh is growing, South Bethlehem is changing. The decades-long exodus of ethnic white communities into the city’s new suburbs coincides with a second wave of Puerto Ricans. Jobs, however, are no longer plentiful as the industrial decline accelerates. Steel sells Homer Research Laboratories on South Mountain to Lehigh in a move that doubles the size of the campus. In 1987, Lehigh admits its largest freshmen class ever. The university celebrates the dedication of the Rauch Business Center on the site of the former Taylor Stadium.

Rauch Business Center Lehighvalleylive.com file photo

A community is in crisis. In 1995, Bethlehem Steel halts steelmaking at its flagship plant. Steady union jobs are replaced by low-paying retail and service jobs. Meanwhile, Lehigh pivots in its approach to town-gown relations after the 1999 inauguration of President Greg Farrington, who expresses a belief that the health of South Bethlehem and Lehigh are inextricably linked. His first major project in 2002 is Farrington Square, which is designed as a campus gateway. The development includes several shops and aims to blur the campus and community border.

the last cast Saed Hindash | For lehighvalleylive.com

Welcome to the post-Steel era, South Bethlehem. It looks better than many anticipated. Northampton Community College opens a campus in 2005 in a former Steel office building. In 2009, Las Vegas Sands opens a casino at the former plant site. SteelStacks opens in 2011 and becomes a community hub. The Hoover Mason Trestle, an elevated linear park, opens in 2015. The city builds a skatepark and the South Bethlehem Greenway — a rail-to-trails park.

sands neighboorhood sign Lehighvalleylive.com file photo

The revitalization effort is widely seen as a success, but it comes at a cost — residents who have lived here in South Bethlehem soon find themselves priced out. In 2016, Lehigh announces plans to boost enrollment by 1,800, creating a real estate boom. Bethlehem’s affordable housing stock makes is an easy target for out-of-town investment. City data tracking regulated units — places where three to five unrelated people live — shows 87% of its nearly 700 regulated rental licenses were approved in the last six years.

todo Saed Hindash | For lehighvalleylive.com

It’s 2019, and Lehigh breaks ground on its $145 million Health, Science & Technology building, the largest academic building on campus — and the first with a main entrance facing into the community. The 190,000-square-foot building is meant to continue Lehigh’s efforts to blend its borders with the surrounding Southside. But its 10-foot LEHIGH sign alienates some residents and city leaders. It’s a reminder that despite Lehigh’s efforts to be a better neighbor, tensions remain.

Lehigh sign Kurt Bresswein | For lehighvalleylive.com
old bethlehem new Bethlehem
Walker Evans, photographer, Library of Congress, Prints & Photographs Division and Saed Hindash | For lehighvalleylive.com

Where does South Bethlehem go from here? Like so many communities across America, South Bethlehem now finds itself a victim of its own success. Its revival now threatens the essence of what’s drawn waves of immigrants to this working-class neighborhood for 157 years. South Bethlehem’s next challenge: How does it retain its history as a welcoming, working-class community while embracing its future?

About the authors

Sara K. Satullo is the former Bethlehem City Hall reporter for lehighvalleylive.com and The Express-Times.

Nick Falsone is editor of lehighvalleylive.com and The Express-Times.

Saed Hindash is a multimedia specialist for lehighvalleylive.com and The Express-Times.

Development and design by Carl Roberts, Arjun Kakkar and Seth Vincent.