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The Early Industrial Camps

In Baltimore in the 1800s, entrepreneurs started tapping the mighty rush of the Jones Falls, then a robust tributary of the Patapsco River. Mills soon dotted the Patapsco’s banks, a few miles north of the city. The owners needed workers, so they moved entire families from the rural farmlands of Maryland and Virginia and housed them in thick-walled stone homes clustered around the mills. These modest buildings varied in size: from small, two-story rows of homes for laborers, larger three-story duplexes for management, and a few stand-alone homes for mill owners. Industrialist Zachariah Allen wrote in 1829 that “the manufacturing operations of the United States are carried on in little hamlets, which often appear to spring up in the bosom of some forest, around the water fall which serves to turn the mill wheel.”

Steel came to Baltimore in the 1880s, when Pennsylvania-based Bethlehem Steel created an outpost on the tidewaters of Sparrows Point in Baltimore County, just over the eastern city line. The plant became one of the top industries in the area, employing more than 30,000 workers at its peak. In the beginning, Sparrows Point had squalid conditions with little infrastructure, though the company eventually hired an architect to create orderly rows of worker housing. The difference between the steel plants’ methodical layout and the organic style of the textile mill villages underscored a fundamental reality: business uses of physical space were constantly in flux, as economic changes swept through various industries. “Company towns were often outposts introducing industrial capitalism into previously unexploited territory and, later, nostalgic ruins of the same industry, abandoned in a continuing cycle of creation and destruction,” Crawford writes. “Over the course of more than a century, a series of shifts in industry and geography generated a succession of company town types: the mill village, the corporate city, the lumber camp, the mining town, the industrial suburb, and the satellite city.”

By the 1940s, textile mills across the country were dying, and a few decades later, Bethlehem Steel went bankrupt. But today, the mills along the Jones Falls have been reclaimed. Artists have converted the abandoned industrial spaces into live-work lofts, and developers have moved in. The old factories and mills house high tech companies and acupuncture clinics, jewelry studios and theater troupes. There’s a Whole Foods market in one, a Starbucks in another. The sturdy, modest stone homes that once housed workers are swiftly becoming sought-after real estate.

Power, Without Responsibility

In Baltimore, and in cities around the country, manufacturing buildings have new uses. Procter & Gamble’s former manufacturing home on Baltimore’s Inner Harbor was redeveloped in 2002 by developers Struever Bros. Eccles & Rouse. Renamed Tide Point (after the soap product that was made there), the 15-acre, multi-building campus serves as the headquarters for IT companies like Advertising.com, and for sporting apparel giant Under Armour. Notable at Tide Point are the on-site amenities for workers. There is a daycare center for employee children and a modern, sunny café; a gym and a waterfront promenade with hammocks, where, in summer months, delicate mists of cooling water refresh workers taking a break out of doors. Inside, the offices have ping-pong tables and lounge areas.

Location on the water, once a necessity for city industries, is no longer required. Business today is not as reliant on topographies. Increasingly, a company’s most important asset is between the two ears of its employees. In a creative class economy, the water imparts a psychic value rather than a logistical one, an amenity to attract creative workers.

With business no longer wholly tethered to topology, cities are forced to rethink their relationship with companies. Sociologist Richard Sennett wrote about this shift in a 2001 article, “New Capitalism, New Isolation: A Flexible City of Strangers.” Sennett argued that one of the many effects of the new global creative economy is that corporations—which once functioned as invested anchor institutions—are no longer as civically or fiscally engaged, since they can essentially take their assets with them anywhere. “In Chicago in 1925, for example, political and economic power went hand in hand,” Sennett wrote. “Presidents of the city’s top 80 corporations sat on 142 hospital boards …Tax revenue from 18 national corporations in Chicago formed 23% of the city’s municipal budget.” Today, however, “[a company] wants to operate in the city but not rule it; it composes a regime of power without responsibility,” he wrote. “Cities can’t tap into the wealth of these companies, and the corporations take little responsibility for their own presence in the city.”

When corporations threaten to leave, cities often offer massive tax incentives for them to stay, effectively mitigating the benefit of having a corporate behemoth in your jurisdiction in the first place. Sennett pointed to “footloose” multinational companies like Rupert Murdoch’s News Corp, which managed to avoid paying much of its local and national tax share. (Today, you might cite Halliburton’s move from Houston to Dubai.)

Brad McDearman, Executive Vice President of the Economic Alliance of Greater Baltimore, has spent a career observing the fiscal and social relationship between cities and companies. A former executive at Fantus, a division of Deloitte & Touche, McDearman today helps shape regional economic strategy for Baltimore. “You used to have key leaders who were big fish, who were the ones giving the money and pulling everyone else on their coattails,” McDearman says. “You’re not seeing that as much anymore. Today, you have more mid-size companies, and it’s harder for them to invest philanthropically. It’s also harder to quantify their impact.” He believes there isn’t much correlation between having a major headquarters in town and the town’s per capita income. In fact, when large companies break up, merge, or move, McDearman says, they often leave either an intact back-office operation or a wake of industrious ex-workers willing to start niche businesses. Look at Tide Point: once home to one major manufacturer, it now houses a multitude of creatively-driven businesses. While McDearman doesn’t undervalue the impact of large corporations leaving certain cities (think GM leaving Flint, Michigan, or Boeing moving its headquarters from Seattle to Chicago), there is a trend among some economic development gurus these days to embrace the creative class evolution by supplanting the behemoth company town model with a diverse, globally-connected business base built on a knowledge economy. “It’s about creating a great quality of life and a place where people want to be. It’s about attracting smart people with good amenities,” he says.

 

Corporate Shangri-La

The amenities at a place like Tide Point pale in comparison to those offered at the new breed of high tech corporate headquarters, like Google in California. Writer Jade Chang dubbed the new Google campus a “geek Shangri-La” in a June 2006 article in Metropolis magazine. Chang described a physical environment built to foster creativity and to support worker needs with benefits ranging from fully stocked kitchens near offices to lending libraries, massages, and lap pools. Google engineers willingly log long hours, and Chang observed this about one engineer: “Strangest of all, come nightfall he often has no desire to go home, preferring to get dinner, gratis, in one of the employee cafes.”

Perhaps the granddaddy of the benefits-laden company campus is SAS, a business intelligence software company located in Cary, North Carolina, a growing suburb in the metastasizing Raleigh-Durham area. Founded in 1976 by N.C. State University buddies Jim Goodnight and John Sall, SAS is now the world’s largest privately-held software company with $1.9 billion in revenues last year. SAS employs over 10,000 people worldwide and more than 4,000 of them work at the Cary offices. The company started on a 200-acre site that Goodnight purchased. The land was slated to become a business park and another company occupied an existing building, but over the years, adjacent land was purchased and SAS took over. Today the headquarters sits on a gated 900-acre lot, not far from other corporate giants like IBM.

The company stands out among the increasing number of expansive corporate campuses. In 1998, Fast Company wrote a breathless article about the utopian conditions there, and the benefits have been piling on with every passing year. Employees are offered on-site daycare and pre-school for their children, cafeterias with live piano music and kid-friendly elements like high chairs. There is a gym and an indoor pool, a golf course, and a hair salon that also offers facials. An on-site health facility employs doctors, nurse practitioners, and dieticians, so you never have to leave the campus to see a doctor. But if you do fall ill, SAS offers you unlimited sick days. HR staff will also help research and arrange elder care for aging parents no matter where they live. The perks have earned the company a spot on the Forbes “100 Best Companies to Work For” list since its inception ten years ago.

SAS is laid out like a college campus of sorts, reflecting the academic environment where Goodnight and Sall first started developing their analytical software. You enter through a guarded gate and drive along winding roads lined with pristine gardens punctuated by outdoor sculpture. On a spring day in April, the sky that famous Carolina blue, a cool breeze rustles through thick woods over a footbridge traversing a meandering creek, giving the feeling less of a corporate facility and more of a state park. But then you look to the clearing, and topping the hill is a large building clad in corporate reflective glass surrounded by a landscape dotted with other large, innocuous office buildings. Unlike the college campus it’s emulating—where nice weather would lure class-skipping coeds to the outdoors—the sidewalks and footpaths at SAS are totally empty.

Inside Building U, the environment is equally sterile. Quiet and still, there is a sense that workers are busy behind closed office doors. At SAS there is an unyielding focus on production and output. And there is definitely more conversation about software architecture than literal architecture. Goodnight never collaborated with an architect on the design of his mega-campus. As it grew, he hired a variety of planners and designers, and the resultant aesthetic is your standard corporate office park. The buildings are basic, the hair salon a modest room tucked in a corner of a much bigger complex. Some office buildings are designed to resemble an Embassy Suites, where a large interior courtyard is surrounded by several stories of open walkways with offices wrapping the exterior. This is a striking difference from the Googleplex in California, where New York workplace consultant DEGW and L.A.-based design firm Clive Wilkinson Architects struggled to infuse the buildings with characteristics unique to the company, and where cofounders Larry Page and Sergey Brin give divisions money to host cubicle design competitions.

A fifteen-year veteran with SAS, Jeff Chambers, the company’s vice president of human resources, is among the many who says he plans to retire here. He uses a white board to draw cyclical diagrams that illustrate the corporate philosophy. He ends the speech by saying: “We hire people with the expectation that they are going to be at SAS the rest of their careers. Many companies don’t do that.” (Though notably, the company does not offer stock options, and says it has no plans to go public.)

To encourage employees to be more productive, SAS offers employees a wide range of benefits within the confines of the corporate campus—a huge benefit, or a huge detriment, depending on whether you think this is all too Big Brother-ish. Lunch breaks, health club visits, childcare, and doctor’s appointments all take place right on the corporate campus. “You start feeling sick, you go get an antibiotic at the health center and you don’t get sick,” Chambers says. “So you don’t miss work.” Tide Point, Google, and SAS may not be the salt mines of yore, but the goal of companies over the centuries has remained relatively constant: maintain a productive workforce. “Companies are giving a lot of amenities today, especially in really prosperous industries like IT,” Crawford says. “In a way, it’s exactly the same thing as the company town of the past. The only reason companies ever really did that was because they needed to retain workers.”

Goodnight co-authored a paper with Richard Florida for the Harvard Business Review in 2005 about managing the creative class. In it, they wrote: “SAS recognizes that 95% of its assets drive out the front gate every evening. Leaders consider it their job to bring them back the next morning.”

SAS may represent the rise of a new type of company “town.” Rather than focus on the needs of employees beyond the office, Under Armour, Google, and SAS focus inward, on worker productivity. By eliminating life’s distractions (hunger, illness, childcare), or at least making them a bit more convenient, the companies are investing in an employee’s unfettered focus. The organizations often espouse a work-life balance. But what happens when healthcare and welfare are so intricately tied up with work? A modern employee may believe her on-campus benefits are truly benefits, but in a country where healthcare, pensions, and basic social services are no longer handed out by the government, she may also feel just as beholden to her company as any miner of the past.

In an industry with an average 15-20% turnover rate, SAS’s annual turnover is 4 percent. Employees often cite the flexible work environment, with unlimited sick days, as a big plus. Yet the flextime isn’t exactly being cashed in. Employees average only 2.5 sick days a year, according to Chambers. One technician, Cisco Ojeda, who has been at SAS for a decade, always makes up for hours used in non-work-related pursuits. “If I have a 3 p.m. squash game that runs long, I know that I can play that extra time and then make up for it later,” he says.

Home Sweet…Office? Worker Housing Comes Full Circle

Notably absent from the benefits list is the traditional company town perk of housing. Today it’s hard to imagine an American company dabbling in housing developments on its employees’ behalf, the way that, say, IKEA, does in Europe. At SAS, housing isn’t yet an issue. As the biggest employer in town, most of its employees live in Cary, where real estate in this sprawl area is still plentiful and cheap. Median housing is $256,900, and most workers, like Ojeda, commute less than a half an hour. In places like California, where prime real estate can be prohibitive, there seems to be a willingness to commute. Workers are trading higher salaries for longer drives (the award for the longest commute was given last year to a software engineer at San Jose-based Cisco Systems, who travels 372 miles every day). Crawford, the Harvard professor, says she thinks it’s unlikely that American companies will start offering worker housing again anytime soon. “It’s hard to imagine it ever getting drastic again in the same way.” Still, she notes, “there are employer-assisted housing programs. Some companies are starting to do this, like universities.”

Back in Baltimore, Under Armour may be a canary in the coal mine for the up-and-coming urban corporation, struggling to provide housing for its workers. New employees have been partly responsible for a renaissance in the once blue-collar rowhome community bordering the complex. The neighborhood is now too pricey for some incoming employees, a concern for CEO and founder Kevin Plank. Plank has been vocal about housing, saying in a 2006 report to the Baltimore City Council: “Housing costs are outrageous in Baltimore. If you have a family, you can’t afford to live in the city and make less than $75,000. Getting a professional to move here is prohibitive.”

While cities like Baltimore struggle with big ticket concerns like housing and transit, they still benefit from inner-city companies’ creative class workers, who spend their disposable income on area businesses, arts and culture. At larger, far-flung corporate compounds like SAS, business and services normally provided by the township are corporate matters, further reducing income to the town and decreasing worker interaction with the community at large. Employees relate less to their non-work surroundings when errands like doctor appointments, schooling, daycare, gym, and salon trips happen under the auspices of the company. Any sense of normal life-work balance, or rather, work-community balance, seems fairly out of reach.

As the company town type evolves, we will likely also see an evolution of the company campus. Just as the mills along the Jones Falls and the manufacturing facilities along the Harbor were abandoned, salvaged, and reused, will our grandchildren someday reuse the abandoned Google and SAS complexes that are cropping up now? In the relentless grind of economic shifts, how will these company campuses fare over the coming decades?

 

This article appeared in the Summer 2007 issue of Next American City magazine. SUBSCRIBE NOW!