Michigan City.

• Author: Richards, Rick
• Position: Economic prospects - Regional Report: Northwest

By the time Maj. Isaac C. Elston bought a square mile of land for $1.25 an acre in 1830, the area that would become Michigan City had been criss-crossed for decades by French fur traders.

But Elston's interest in the area wasn't the fur. It was the Michigan Road. Construction, which was to span the length of the state, began in Madison on the Ohio River in 1830. Elston realized the need for a town at the north end of the road and bought land, sight unseen, at the mouth of Trail Creek on Lake Michigan.

Elston, from his home in Crawfordsville, platted the town even before he visited the area in 1831.

Much has changed in the city since the first 50 settlers moved there in 1833. By 1836, the year Michigan City was incorporated, 1,500 people lived in the community. Today it's home to about 35,000.

It's now a city that showcases four miles of lakefront, that opens its doors to shoppers from throughout the Midwest and is home to a variety of manufacturers.

Mayor Robert Behler says it's difficult to come up with simple definitions of the city. "How to identify Michigan City? Oh, it used to be, 'That's where the state prison is.' Now it's either, 'That's where the beach is,' or 'That's where the outlet mall is,'" Behler says.

"Having lived here all my life, it is difficult for me to give a thumbnail sketch of the town," he says. "You know it inside out. People tell me when I travel around the state, 'Boy, you have a beautiful city.'"

Mary Kaczka, director of economic and community development for the Michigan City Area Chamber of Commerce, says the Lighthouse Place outlet mall has helped transform the city.

"Lighthouse Place has helped to create a positive image for Michigan City," she says. "Being such a positive development, it has made us a destination place for shoppers. Lighthouse Place has proved we can sustain retail development."

When the outlet mall opened in 1987, there were many Michigan City nay-sayers who grumbled that it wouldn't work. The mall was built on the fire-scarred remains of the Pullman-Standard rail car manufacturing complex, which at one time was the backbone of the city's economy.

The transformation of the former factory into a retail mecca is only the most obvious symbol of how Michigan City has transformed both the way it looks and what fuels its economy. A deeper look reveals that the city's economy has diversified since the days when it revolved around the Pullman plant. That, says the mayor, is a key achievement.

"I...