Click for printable version
Click to send to a friend

Photos by Craig L. Moran. The Hotel Nevada is the most prominent feature in Ely's downtown at night. The town's economy has suffered in recent years, but officials see some hope in tourism. Next to Ely's City Hall is a baseball field where children play under the lights. Elko truck driver Mitchell De Bore stops for a few minutes of fishing at a reservoir south of Ely. Huge dump trucks sit idle at the Broken Hill Proprietary Co. copper mine, which shut down in 1999. The mine is for sale. The post office in downtown Ely will cease operations in August, one of several closures in the town. With no jobs to be found in economically depressed Ely, teenagers spend their summer days hanging around parks and skateboarding. White Pine County School District Superintendent Bob Dolezal has been forced to permanently lay off teachers as enrollment has dropped. Ely Mayor Bob Miller took office on June 24, 1999, the day the Broken Hill mine announced it was closing its local copper mine and laying off 360 workers. Broken Hill mine General Manager Dave Courtney said declining copper prices forced his company to close its White Pine County mine in 1999. Click image for an enlargement

Sunday, July 14, 2002
Copyright © Las Vegas Review-Journal

When Boom Goes Bust

Ely's blue skies and tree-dotted hills belie its economic struggles

ELY -- On a hot summer afternoon, teenage boys look for police cars cruising along Aultman Street, the downtown thoroughfare in this remote eastern Nevada community of 3,600 people.

Seeing none, they climb on concrete steps, leap onto the sidewalk and skateboard past the "No skateboarding allowed" sign outside White Pine Middle School.

The long summer can be boring for a teenager in a community suffering through another bust in the inevitable boom and bust cycle of rural Nevada's mining-based economy. Jobs are scarce for everyone.

"There isn't much to do around here," said 14-year-old Matthew Short Welty.

Welty's summary holds true not only for teens on the street but the community as a whole. Life hasn't been the same in Ely since June 24, 1999, when the Broken Hill Proprietary Co. closed its open pit copper mining operations five miles west of town.

Twelve percent of the 3,100-person work force in White Pine County immediately lost work.

Since that day, residents have struggled to survive through another recession. The county population, estimated at 11,150 on the day the mine closed, has dropped 23 percent to 8,551.

State demographer Jeff Hardcastle expects further declines. By 2011, he estimates, White Pine County's population will drop to 7,000, which is fewer residents than were here in 1870, a peak time for mining in the town.

"We lost half our classmates," said Taylor Brooks, another skateboarder outside the middle school.

Maybe that is true in some classes, but White Pine County School District records show a 21 percent drop in recent years, from 1,854 students in 1998-99 to 1,464 during the past school year. Superintendent Bob Dolezal figures the student population eventually will stabilize at about 1,200.

The decline for local businesses has been even more alarming. Once bolstered by mining company purchases, sales by White Pine County businesses hit $195 million in 1995-96. Last year's tally: $65 million.

The Ely Daily Times, the news voice of the county for the past 82 years, has become the Ely Times, published three times a week. The 65-year-old downtown post office ceases operations in August, leaving only a postal facility on the outskirts of town.

Times are so tough that two of the three brothels have closed.

And two other small mines are expected to close this fall, leaving White Pine County without a working mine for the first time since Nevada became a state. State officials see nothing emerging in the next few years to replace the mining losses.

"Right now there is not a good answer for them other than mining," said Jim Shabi, a state economist in Carson City. "Mining is far and away the best-paying industry in the state and there is no way to replace those dollars now or in the foreseeable future."

Mayor Bob Miller can't forget the day Broken Hill closed its copper mine. That also was the day he took office.

"I was sworn in as mayor and got a call from the president of the mining company announcing they were closing down," he said. "Welcome to politics."

Today he runs a town that has no money to fix the potholes in its streets. Ely could qualify for federal grants for improvements, but it usually can't come up with the required matching funds.

"You need to spend money to make money, and we are operating with tens of thousands of dollars of less revenue. Where do we get our match when there is a never-ending spiral downward?"

The closing of the post office especially hurt.

"It was one of the places you went to meet with friends," Miller said. "You got news about the community. In a small town, a lot of hot discussions went on at the post office."

But Miller says he is not discouraged.

"I can leave work and be fishing in 10 minutes," he said. "I can show kids more wildlife than they will see in Yellowstone National Park. I love it here."

So does pharmacist Art Olson, operator of Steptoe Drug since 1958.

"Ely has a quality of life that is unmatched in Nevada," he said. "We are still a small town. It is just an ideal place to live."

At an elevation of 6,240 feet, Ely rarely sees summer temperatures hotter than 90 degrees. Pine and juniper trees dot the hills around town. Eight miles away is Cave Lake State Park, a pine forest where deer and elk are abundant. The only sounds are of fish jumping.

"We have beautiful mountains and clear skies," Dolezal said. "Our idea of a traffic jam is four cars at a stoplight."

Sixty years ago the town was prosperous. White Pine County rivaled Washoe and Clark for the state's political leadership. Two native sons, competing Ely newspaper owners Vail Pittman and Charles Russell, would be elected governor. For several decades, the county had as many state legislators as Clark County.

Much of the prosperity in White Pine County was attributed Kennecott Copper Co., a business affectionately dubbed "Uncle Kenny" by locals. Thousands of people were employed by the company in Ely and nearby McGill and Ruth.

Legend has it the town of Ruth was moved three different times as miners sliced away whole sections of mountain in search of copper.

The prosperity ended in 1978 when Kennecott closed its White Pine County mines. Its smelter in McGill could not meet U.S. Environmental Protection Agency standards. Recession followed.

During the 1980s, ads for three-bedroom homes going for $12,000 went unanswered. Locals say the unemployment rate exceeded 20 percent.

But when copper and gold prices rebounded in the 1990s, Broken Hill began digging at Kennecott's abandoned Liberty pit mine. Executives at the time talked about keeping the mine open for 15 years.

Dave Courtney, Broken Hill's local general manager, said his company put $550 million into its White Pine copper mining operation between 1995 and 1999, but never was able to recoup its costs in copper and gold sales.

The company shut down after copper prices fell to 60 cents a pound, about half of the price when excavation had begun four years earlier.

Prices today are about 75 cents a pound, about 15 cents below what Courtney figures is fair. Analysts, however, don't foresee much of a rise in coming years. Complicating matters is that Broken Hill can produce copper for less at its South American mines.

The Ely mine is for sale. Maintenance crews oversee the company's fleet of vans and $1.6 million dump trucks that can haul 240 tons of copper ore. Sixteen employees remain to handle security and maintenance. Courtney himself leaves at the end of summer.

"The bottom line is what it costs to produce a pound of copper," Courtney said. "We think it is going to sell. Everything is ready to go."

With the mine closed, the state Department of Corrections has become White Pine County's largest employer. There are 341 employees at the maximum-security Ely State Prison, which is home to 1,054 inmates, 86 who are on the state's death row.

Against the wishes of prison officials, state legislators picked Ely for a prison site in 1979 to bolster the economy, then depressed by Kennecott's closure. Since then, there have been repeated cries that picking a community 180 miles from the closest Wal-Mart for a prison was a mistake. Prison officials repeatedly had problems recruiting employees, especially state doctors.

But Corrections Director Jackie Crawford said that problem is over. Employee turnover last year at the Ely prison was 9.3 percent, compared to a 16 percent statewide prison average.

"I don't wish mines closing down, but when the revenue stream from other places shuts down, it stabilizes our work force," she said.

The Corrections Department generates $20 million in wages and other benefits each year for the White Pine economy. Crawford said Ely is the one place in the state where no one complains about being home to a prison.

"The townspeople feel happy to have a prison," she said.

As school superintendent, Dolezal has struggled to keep the lights on in schools that stretch across White Pine County, from Lund in the western fringes to Baker 120 miles away near the Utah border. Last year he had to permanently lay off 13 teachers.

The school district closed a 60-year-old elementary school in the heart of Ely in 1997. Today it has become an eyesore, a decaying reminder of when the community was prosperous.

"Got any idea of how to dispose of an old school?" Dolezal asked last month. "There is no market for an asbestos-laden building painted with lead-based paint."

Because of the county's financial woes, the Legislature in 1999 appropriated $16 million to help White Pine and neighboring Lincoln County build schools. That broke a 100-year state tradition of having county residents pay for school construction through property taxes.

A new school in Lund will be dedicated in August, but the 150-student school planned for Pleasant Valley near the Utah border was shelved. Instead of gaining enrollment as expected, Pleasant Valley's student population dropped to eight. Dolezal attributes the decline to a few polygamist families moving away.

Without good-paying jobs available, Dolezal said, most students move away after graduation. Former schools Superintendent Mark Shellinger tried to increase teacher jobs by establishing the Nevada Virtual High School, the nation's first online high school.

Early in 2001 more than 270 students throughout the state, including 53 in Clark County, signed onto the program. Courses were offered on the Internet and students received help through e-mail from teachers in Ely.

But legislators rebuffed Shellinger when he sought legislation to require the state to pay his school district for the online instruction. He had hoped to have as many as 500 additional Clark County students take the computer classes, but parents could not afford the $340-a-month tuition.

The Clark County School District balked at turning over state funds for its own students to White Pine County.

Shellinger left his school district job shortly after the defeat at the Legislature.

Economic Diversification Council coordinator Karen Rajala does not think the Ely area is as distressed as business statistics might show. Business sales are up 5 percent this year and stand at about what they were before Broken Hill arrived to reopen the Kennecott mines, she said.

Room taxes, earned from the community's 600 motel rooms, are up 13 percent this year. Rajala sees the increase as a sign of the importance of tourism.

"What happened is a perfect example of what happens with mine economics, the boom and bust cycle," she said. "We need to diversify our economy."

Some officials are hoping that a new national heritage area will bring more tourists.

Rep. Jim Gibbons, R-Nev., recently introduced a bill that would allow a local advisory board to spend up to $10 million in federal funds to create the Great Basin National Heritage Route in White Pine County and Millard County in Utah.

The Great Basin Area contains numerous cultural and natural resources, the congressman said, including historic remains of the mining and ranching industries and 1,000-year-old pine tree forests.

Action on the bill is pending.

Rajala sees Ely recovering from its recession as more and more residents begin home-based businesses. There are 54 in the area and she sees that number doubling.

Rajala said these businesses are not dependent on the local economy for revenue. Some attract customers over the Internet.

She said an Ely spring water company has been established to sell bottled water in other areas. One woman has a sewing business that makes knapsacks and a man operates a custom motorcycle company.

Mayor Miller figures Ely ought to secure some economic benefits from the Yucca Mountain nuclear waste repository planned for 100 miles northwest of Las Vegas.

In particular, he said the satellite system that will track movements of waste-laden trucks should be built in his town.

"Why not in Ely, Nevada?" he said. "If we get the crap, we need to be compensated."

If Ely is struggling, its leaders still would have to be heartened by the attitude of the renegade skateboarders.

"I want to go to college and come back here," Welty said. "Become an architect. We need better buildings."

White Pine County taxable sales

Year	Total sales	Pct. change
1995-96	$195.5 million
1996-97	$132.9 million	-32%
1997-98	$116.8 million	-12
1998-99	$109.9 million	-6
1999-2000	$76 million	-31
2000-01	$65 million	-14
2001-02	$68 million	5*

SOURCE: Department of Taxation.

White Pine County population

Year	Population
1900	1,961
1910	7,441
1920	8,935
1930	11,771
1940	12,377
1950	9,424
1960	9,808
1970	10,150
1980	8,167
1990	9,264
1999	11,150
2000	9,181
2002	8,551
2010	7,008*
2020	6,500*

SOURCES: U.S. Census and state demographer's office

*Future estimates