Under Pence and Buttigieg, South Bend sees mixed economic results

By Lucas Masin-Moyer and Juan Jose Rodriguez • May 15th, 2017

Downtown_South_Bend_Above_St._Joseph_River

A view of downtown South Bend above the St. Joseph’s River. (Photo/Wikimedia Commons)

At the end of 2016, Mary Grace Sikorski was forced to close her restaurant, Spaghetti Joes on the west side of South Bend due to lack of business. A few months before Sikorski closed shop, Stephanie Mirza and her husband bought the Innisfree Bed and Breakfast just south of Spaghetti Joe’s and have seen massive success since taking over this past August.

Sikorski and Mirza’s business ventures reflect the mixed bag of economic development in South Bend under then-Governor, now Vice President Mike Pence, and Mayor Pete Buttigieg since the two were elected in 2013 and 2012, respectively.

The South Bend area, specifically, has been influenced by two major players outside of Pence and Buttigieg, whose roles in the economy weigh heavily into the region’s economic development.

“The Chamber of Commerce, they are working really hard to make South Bend a place for people to come and the visit South Bend people,” Mirza said. “There are just so many initiatives going on. And of course there is the university. Notre Dame has an orbit itself that brings people here, so there are kind of these two operating things that are more and more interacting together.”

Since 2013, the unemployment rate in South Bend has fallen from 10.5 percent to 4.8 percent, along with the rest of the state, where the unemployment rate fell from 8.4 percent to 4.1 percent.

This divergence in unemployment numbers, in which the state level is 0.7 percentage points below the city level, is representative of a greater trend across economic measures. The median income in of those living in St. Joseph’s County ($45,248) lags behind the state average of $50,532.

Dan Graff, a history professor at Notre Dame, attributes this discrepancy to the loss of industrial jobs in the area.

“You don’t talk to South Bend residents for very long and ask them about the economy and they don’t still bring up Studebaker,” he said. “ … [The plant] closed in the 60s and people are still talking about it. So it has been somewhat of a long-term problem. I think there’s been periods of hemorrhaging of industrial jobs in the wake of NAFTA in 1994.”


movie_play_blue2Animation: Google Earth timelapse showing the transformation of South Bend


This departure of the core of the economic sector led South Bend’s population to decline from its peak in 1960 of 132,445 to around 100,000 in 2010. This number, according to census estimates, has begun to rebound in recent years.

The mixture of positive signals (lower unemployment) and negative signals (lower median income and population decline) show the mixed nature of economic development in South Bend, a city where economic success is possible, yet far from a guarantee.

Economic Failure in South Bend

For Sikorski, the decision to pursue a lifelong dream of opening Spaghetti Joes was the result of a perfect blend of timing and desire.

“I was fed up with corporate America,” she said via an email interview. “After 15 years at my job, my position was eliminated. The same thing had happened after my first job out of college — I was at that one for 12 years. So I wanted to work for myself.  I also loved to cook and always had a dream of opening an Italian restaurant, so the time seemed right.”

Sikorski determined the name for her restaurant per Italian naming customs. When many members of a family have the same name — stemming from their being named after their own fathers or grandfathers — then the identifying characteristic becomes the skill around which the individual built his livelihood. With five “Joes” in the family, and Sikorski’s grandfather being known as such among his family for his passion for cooking Italian cuisine, the choice was simple for the new establishment’s name.

The fairytale of owning the family restaurant did not last long. After only eight months of operation, Sikorski was forced to close the restaurant, citing a lack of business rooted in low demand.

“The area was terrible for a restaurant,” she said.  “I should’ve done more research before deciding on the location, but it was literally two minutes from my home.”

Spaghetti Joes management photo

Spaghetti Joes owner Mary Grace Sikorski (center) alongside her father, Domonick Vito Corpora (left) and brother, Rev. Joe Corpora, C.S.C. (Photo/Mary Grace Sikorski>

Sikorski added that the restaurant industry was too demanding to justify continuing operation of the restaurant.

“I ended up going back to work for ‘the man,’ and it was far too taxing to keep up both the full-time job — which at this point was paying the bills — and running the restaurant,” she said. “Even with business at the restaurant declining, it was more than I could handle long term.”

Sikorski’s failure can be attributed, in some part, to the loss of South Bend’s industrial economic base. When Studebaker left South Bend in 1963, the rug was pulled out from under the city, who has still yet to recover completely after more than a half-century of stagnation.

This stagnation has made it harder for small business owners like Sikorski to succeed with less money flowing in and out of the city. In turn, Graff said, resources are restricted, and the number of jobs paying people a just wage and keeping them safely out of poverty has continually fallen since the early 1960s.

“(South Bend) used to have a much more significant industrial base, [but] the jobs that have disappeared or have moved away have not been replaced by jobs that pay the same,” he said.

The lack of economic success in the area was reflective of a larger nationwide trend which has shrunk the American middle class, Graff said.

“I refer to this nationally as a chronic crisis that we’ve been dealing with, the disappearance of stable long-term middle-class jobs for 40 or 50 years now,” he said. “You usually think of a ‘crisis’ as something momentary or a short period, and it’s chronic in the sense that it’s an ongoing thing. It long predates the Pence administration, and it’s bigger than Indiana too.”

Economic Success in South Bend

When Stephanie Mirza and her husband moved back to South Bend in 2016, they decided to take a leap and decided to purchase a unique home which doubled as a bed and breakfast.

“When [my husband] found out [he] had a position [at Notre Dame] to come back to … we looked at housing and he saw this place, he’s like this is amazing,” she said. “How often do you have the opportunity to not only buy a house but buy a historic home that’s also a bed and breakfast? We met the previous owner, asked her all sorts of questions like, ‘What in the world are we doing?’ She said it’s not that bad, it’s a lot of fun so we went for it and it’s worked out.”

 

Since purchasing the Innisfree — an Irish-themed bed and breakfast adorned with Gaelic symbols and with rooms named after famous figures in Irish history — the Mirzas have seen booming business, something Stephanie attributed, in part, to a revitalized South Bend.

“South Bend, since we left five or six years ago, has changed a lot. We left when it was at a low point and we come back and see life and interest and attention coming to this area which is good for us, good for our business,” she said. “The river lights [are] a beautiful addition, the Four Winds [Field], that’s a big deal. I think we’re going to see a lot more business because of that.”

InnisFree photo

The Innisfree Bed and Breakfast, on the west side of South Bend, was purchased in mid 2016 by Stephanie Mirza and her husband. The inn has seen success since the in the months since it came under new ownership. (Photo/Lucas Masin-Moyer)

Mirza’s success, and that of other small businesses in the region, has been helped by city-level initiatives spearheaded by the Chamber of Commerce and Mayor Pete Buttigieg. These initiatives, Mirza said, were aimed at improving the outward appeal of business, thereby helping them to grow income.

“The city has initiatives for small business,” she said. “If you want to improve the outside of your business and you’re within this radius of downtown, you can get grants to do that. I applied for one to work on the exterior part, it can’t be just for maintenance it has to be some new signage or some new … improve the look on the street.

Overall, Mirza said operating a business in South Bend has been a positive and successful experience.

“It’s been great,” she said. “We just moved from Berkeley, California, so it’s kind of a major shift as far as cultural and things like that. But the environment here has been really receptive and positive. People really genuinely want to help out.”