Posted on November 11, 2011

Jefferson County Bankruptcy a Blow to Long-Suffering Birmingham

BusinessWeek, November 11, 2011

Birmingham, Alabama, the most prominent industrial center in the Southeast before the civil- rights era, has been on a long losing streak that just got longer.

In 1997, Daimler AG opened a Mercedes-Benz factory in Vance, one county west of the state’s biggest city. Honda Motor Co. put a plant to the east, Toyota Motor Corp. to the north and Hyundai Motor Co. to the south. Birmingham lost its minor-league baseball team to a suburb in 1987, and the Iron Bowl football game in 2000. Plans for an entertainment district foundered. The city’s population plummeted almost 13 percent since 2000, even as the state grew.

Birmingham is also the seat of Jefferson County, which filed the biggest municipal bankruptcy in U.S. history under the burden of more than $3 billion of sewer-system debt. The so- called Magic City may need a big trick to persuade residents and businesses that its days of losing are over.


Birmingham was once a manufacturing center whose steel furnaces lit the night sky. A 56-foot statue of Vulcan, the Roman god of the forge, looks down on the city from a 124-foot pedestal that rises from Red Mountain, where he holds aloft the tip of a newly hammered spear.


The slide to bankruptcy began in 1996, when the county was forced to rebuild its sewer system after pollution was found spewing into rivers. Risky derivative financing for the project backfired beginning in early 2008, leading the county to become one of the biggest casualties of Wall Street’s credit crisis.


Birmingham, with 4,160 employees and a $371 million general-fund budget for 2011, carries Moody’s Investors Service’s third-highest bond rating at Aa2.

Jefferson County’s bonds are rated 14 levels lower: Caa1, below investment grade.


Residents are torn as to what bankruptcy will mean.

“It’s a sad day for Birmingham and for Jefferson County,” said Sophia Faulk, owner of Sophia’s Deli and Catering across the street from the county’s offices. “I’ve never seen people so unhappy.”


Hilson of the Business Alliance said the city, which has weathered so much, will outlast this storm.

“All of the positive attributes of the community in time will overshadow what has happened and is happening now, but that’s going to take some time,” he said. “It’s certainly not going to be an overnight fix.”

11 responses to “Jefferson County Bankruptcy a Blow to Long-Suffering Birmingham”

  1. ken says:

    The article failed to mention how many city and county officials are in prison for payoffs and other illegal dealings. The water board was not controlled by the city and county for years and had a surplus of money. Finally the city was given charge of the money and it was soon spent on lavish dinners and gifts for councilmen and their friends. Birmingham’s downward spiral did not start in the nineties as the writer suggested but in the sixties with Martin Luther King, the Kennedy brothers, Lyndon Johnson, ABC, CBS, NBC, Time magazine and many more media do gooders. Birmingham is 75% black with a Black Mayor, Black police chief and the school system is 1% White. The last sentence should tell you the rest of the story.

  2. Anonymous says:

    Maybe the SPLC could help pay Birmingham’s debt?

  3. madison grant says:

    So Birmingham has gone from an economic powerhouse to Detroit South? The population has dropped from 340,000 to 212,000? They’ve gone from a safe, charming city to one with the 7th highest murder rate in the nation?

    Gee whiz, could this have anything to do with the fact that it’s gone from a majority-white to a majority-black city? Nah, just my imagination…

  4. Steve says:

    As always, SBPDL provides cogent analysis on the situation in Birmingham. Hunter Wallace of OD goes even further!

    The collapse of Birmingham (like Detroit) is 100 percent about race. These articles are required reading to understand the severity of the situation plaguing America. Well, Black-Run America (BRA).

  5. Lauren says:

    No, BusinessWeek, dear: The county’s ‘slide to bankruptcy’ did not begin in 1996. It began in 1979, when Richard Arrington was elected as Birmingham’s first black Mayor. BLACK MAYOR = INEXORABLE DECLINE. The smart money has been slowly moving across the County Line, ever since his election.

    Articles like this are why no one pays attention to the Financial rags, anymore. Social Engineering and Revisionist History are for unionized ‘Educators’ and Social Services types. People who actually make financial decisions need information, not ideology.

    Did anyone else notice that the authors here try to blame the economic downturn on the “Dynamite Hill” bombings? And not a single word about the real reason for the county’s problems: RACE. Or maybe I should phrase it as ‘the Undertow created by a certain race’.

    Many years ago, I was sitting in a Business Law class at Millsaps College. The Professor had just polled the class as to what periodicals all those budding MBAs routinely read. He was indignant, because so few read BusinessWeek and Wall Street Journal. A girl from an astute local Phoenician Lebanese family raised her hand and explained that around Jackson, those periodicals were regarded as disseminators of “Disinformation for the Rubes”. I’ll never forget the look on that man’s face. But it should go without saying that my Classmates’ cynicism has stood them in good stead, in recent years.

  6. ice says:

    Birmingham demographics: 62.46% Black or African American, 35.07% White, 0.17% Native American, 0.80% Asian.

    How long will it be before white flight further reduces their numbers to an insignificant level?

    ATTENTION Black Birmingham residents: The city is all yours. You complain so much about whites, let’s see what you can do ALL on your own, like Detroit and other cities.

  7. Ian J. MacAllister says:

    How many other town and counties in black-run America are likewise teetering on the brink of collapse? Let the dominoes fall.

  8. Robert Binion says:

    The team that left here for Hoover did not play very good baseball. I have not gone once to see them–no place for a yokel like me on the wealthy side of town. During the ’50s, the men who made steel, pipe and valves, many ex-pros, played great amateur ball, swiftly and gracefully. I sat spellbound many weekends at Avondale Park with hedge for fence in left and hill in center, a la Crosley. Of course, on the black west side, venerable Rickwood Field stands silent, oldest in the country and charming in every aspect, even the old style urinals. And with perfect acoustics. I stood once on second and heard every syllable of a fan who ragged me softly. As a child, I remember when a foul would be deflected with such impetus that it could transcend the park’s boundaries and young, skinny, black legs would scamper for it in the street. How I longed to be with them! No one would go there for a game today; only the most pressing economic activity impels a visit to black Birmingham. It ain’t worth gettin’ killed for a fried green tomato. (Funny, how the rabid pursuit of equality has resulted in the destruction of equity.) Children don’t play real ball anymore, the business district empties before sundown and laden trains don’t back up traffic as once they did. Decline began, really, when races were thrust together. Rather than integrate it, city fathers closed urban Boswell golf course and we boys would jog over to play football on the greens. A couple of years back, an area notable came up there to drown himself in the water hazard. It seemed a funny ninth inning, one suicidal act of phony pastoralism, 370 yards, dogleg to the left.

  9. Anonymous says:

    I grew up in Bham, live outside it’s city limits, and can tell you that all of these comments are accurate!………More than anything, the Civil Rights Court Decree of 1964, the EPA, and Black Leadership corruption has destroyed the city. It is “Detroit South”. Two weeks ago UCF came to town to play UAB at Legion Field, and the network announcers agreed that both it and The Liberty Bowl in Memphis should be bulldozed for the public’s safety. (It looked like maybe 100 fans in the 75,000 seat stadium?)……I wonder how many had autos after the game?

  10. Anonymous says:

    If any areas/municipalities/countries ‘fail’, so to speak, they are more likely to be ‘black’ areas/municipalities/countries than anything else.

  11. Ed says:

    This is the future of this once great nation. The dominoes have begun to fall!