Record unemployment in rear-view, Bloomington recovers

Bloomington's economy seemed to finally be bottoming out this summer, as local unemployment rates hit historic highs, even while much of Indiana seemed to be riding the recession's rebound.

Job growth across the state wasn't felt here, where unemployment peaked at 8.4 percent in June -- a level not seen since the 1980s.

Employment always dips in Bloomington when Indiana University students leave town for summer, but state cuts in education also were hitting hard, officials said.

However, the fall season has brought quick solace for a town often sheltered, thanks to the university, from the booms and busts of the national economy.

A General Electric refrigerator plant that was under the threat of closure in 2009 was instead, in September, chosen for a $68 million expansion. It was the largest local investment by GE since 2000.

Mayor Mark Kruzan called the move "the type of announcement you hope will bring the country back" and evidence that the city is already recovering.

A week later, Gov. Mitch Daniels was in Bloomington to help announce a new food distribution center that would bring $10.6 million in direct investment, and about 100 employees.

Bloomington's unemployment rate has steadily fallen since June, dropping to 7.6 percent in August, the seventh-lowest rate in the state.

Still, the recession is real here.

Problem loans at the city's largest bank, Monroe Bank, eventually forced its directors to act. The 118-year-old institution was sold in October to Evansville-based Old National Bank for $83.5 million.

Some of the city's most prominent developers have been pushed toward bankruptcy as real estate prices fell and credit tightened. Prominent buildings have been foreclosed upon.

Local governments were forced to rewrite their budgets, too. The county had to close a shortfall that accounted for nearly 7 percent of its entire budget, and chose in part to slash the salaries and benefits in a number of departments, including the prosecutor's office.

As the national economy emerged from the recession, Bloomington's primary private industry -- medical device manufacturing -- had success as well.

Cook Pharmica opened a new $84 million factory as it entered the fill-finish market, and it hired more than 100 new employees and signed major contracts.

Baxter BioPharma Solutions' local plant hit record highs in 2009 for both revenue and product volume, and in 2010 won a national award for its role in producing the H1N1 vaccine.