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April 1993

State Roundups
Upper Peninsula

Sault Ste. Marie enjoys revival

After a slump of more than two decades, the eastern Upper Peninsula (U.P.) town of Sault Ste. Marie is experiencing economic growth.

In the early 1960s, Sault Ste. Marie, which sits on the border between the United States and Canada, saw the closure of several manufacturing plants, and in the 1970s the Air Force base 20 miles to the south shut down. Both took big bites out of available jobs.

But three events in recent years have contributed to the city's comeback: new and steady jobs at the Chippewa County prisons, the Indian-owned casino in town and more Canadians crossing over to shop.

Because of these events, population has increased to 14,689, making it one of the few U.P. towns with a rising population; building permits, driven by commercial construction, tripled in 1991 and 1992 over the previous four-year average; and, with the addition of new jobs and increased Canadian shopping, the city's retail base has expanded.

Ten years ago the state built five new prisons at the former Air Force base. According to Spencer Nebel, city planner, this was the first step on the road to economic recovery. "It provided stable, recession-proof employment."

Then came the casino Vegas Kewadin in 1985. Owned and run by the Sault Ste. Marie Tribe of Chippewa Indians, the casino stands in town on reservation land and is the tribe's largest operation. The casino is one reason the tribe is Sault Ste. Marie's largest employer, with 1,400 employees.

Retail responded to the new jobs and flowing cash, and people from the surrounding area started coming to Sault Ste. Marie to shop, work and live. Many of these new shoppers were from Sault Ste. Marie's Canadian neighbor of the same name, located just across the International Bridge, with a population of 81,476.

With sales tax hikes on the Canadian side of the border and a favorable exchange rate on the US side, Canadians come for low prices and stay for a good time, Nebel says. Traffic over the International Bridge doubled between 1985 and 1991, to upwards of 4 million trips a year. It is estimated that a sizable portion of the traffic was Canadian.

Recent draws are the quickly developing Business Spur on the interstate, a new motel at the casino and a large new shopping mall. The Cascade Crossing Shopping Center opened late last year with Wal-Mart as the anchor, with an estimated 1,000 jobs in the making and a major expansion planned this year.

The economic boom has not spread to manufacturing industries, even though the stage is set. The 1988 Free Trade Agreement between the United States and Canada lifts most tariffs between the two countries, including tariffs on groceries, telecommunications, forestry, and paper and aluminum products. Michigan Sault Ste. Marie's financial incentives have not lured a significant number of manufacturing enterprises. Ontario's Sault is highly industrial, with the bulk of its jobs in steel and paper.

Nebel believes that as the "economic border" between the United States and Canada dissolves through trade agreements, the two Saults will work together to entice more manufacturing, especially to the US side of the border. "It would be beneficial to both," he says. Talks between the twin cities have already begun.

—Nettie Pignatello

Winter tourism expands in the eastern U.P.

While eastern Upper Peninsula (U.P.) attractions, such as Mackinac Island, traditionally draw large numbers of summer visitors, winter tourism is making an impact on the region's economy.

Although winter tourism in the western U.P., which has always been an economic mainstay, centers around downhill skiing, tourism on the eastern side centers on snowmobiling and cross country skiing.

"There's been a real resurgence in snowmobiling, and the U.P. is a snowmobiler's paradise," says Janet Peterson, executive secretary of the St. Ignace Chamber of Commerce. Mid-February international snowmobile drag races held 30 miles away in tiny Cedarville drew over 700 entrants, and St. Ignace's motels reaped some of the benefits. About 15 of the 50 motels and resorts in the St. Ignace area stay open in winter, but the 12 open in town were very busy, Peterson says.

For the past two to three years, the three chain motels in town have stayed open and have seen business grow. One local motel owner reported up to three times the number of overall room reservations this winter over last, according to Peterson. And he admitted that business might have been even better if all his units were open for winter occupancy.

"This is the third year of winter advertising for St. Ignace," Peterson says. And she is convinced that efforts to promote winter activities are paying off. When the city held its first dogsled race in January, it drew 41 sled teams. And the success of that first race ensures that it will be an annual event, Peterson says "Dogsled racing is growing in popularity as a spectator sport."

Across the bridge from St. Ignace is Mackinac Island, a prominent summer vacation area that boasts about 1 million visitors annually. While many of the island's hotels, such as the Grand Hotel, are seasonal, every year more businesses and hotels are staying open through the winter, says Jennifer Defoe, Mackinac Chamber of Commerce.

Although no motorized vehicles are allowed on Mackinac Island in the summer, snowmobiles are exempt in winter. When the weather cooperates, snowmobilers can ride across an ice bridge between St. Ignace and the island. The Mackinac Bridge Authority also transports winter visitors and their snowmobiles to the island.

The 39-suite Lilac Tree Hotel, which opened in July 1991 and is the first new hotel on the island in 70 years, was booked to capacity this past winter over the holidays and on weekends.

Summer tourism will continue to be the island's mainstay, but interest in Mackinac's winter attractions is clearly growing, Defoe says.

—Diane Wells