They say that it isn’t your successes in life that matter. It’s how to rebound from setbacks. The same truism could be applied to communities. Towns, cities, counties, regions—all communities face tough challenges. The thing that makes an “All-America City” is the ability to bounce back when challenges arise.

Downey, California, a finalist in the 2011 All-America City Awards, boasts of being the home of the first Taco Bell and the oldest existing McDonald’s. It was also, for several decades, the home of NASA’s main production plant for the Apollo, Skylab and Space Shuttle Programs. In its heyday, the NASA site employed more than 20,000 people, many earning higher than average salaries. In 1999, the federal government declared the plant a “surplus” site.

Downey is a city of about 110,000 in south east LA County. It prides itself on being a diverse community that, despite being in the heart of a huge metropolitan region, retains an air of small town friendliness. But the 1990s were tough times for many Southern California communities whose economies were based on the military or on the aerospace industry.

Tens of thousands of jobs were lost in what most of us viewed as a peace dividend from the ending of the Cold War. But some cities were better than others of rebounding from the economic transition and finding new ways of bringing in jobs. Downey was one of those.

Instead of waiting for the federal government to clean up the site and auction it off to some commercial real estate developer, the city decided to buy the land itself and expedite the process of turning a potential liability into an economic magnet.

The question was: what to do next? The City of Downey was now the proud owner of a 160 acre empty space with a serious problem of contaminated soil and groundwater thanks to its long time industrial use.

The city partnered with the federal General Services Administration and a private environmental remediation company to cleanup the site. The partners took an innovative approach. The city was allowed to take the sales proceeds paid for the property toward cleaning it up. Putting together an approved clean-up plan for the site was instrumental in getting state sign-off on an early approval of the transfer of the site from federal to city hands.

The expedited clean-up process allowed the city to start finding business to open up shop at the old NASA site. The first was Kaiser Permanente, which bought 30 acres for a new state of the art hospital, a medical center that now employs about 3,000 people. Next was a partnership with a media group to create an 80 acre-production facility, Downey Studios. Some of the films produced there were Terminator III and the Ironman movies. Another 30 acres went for a commercial/ retail development.

In 2007, Downey won a Phoenix Award from the EPA, an award given to groups and individuals who do an exemplary job of environmental clean-up, reuse and redevelopment of an environmentally damaged site.

In 2009, the Columbia Memorial Space Center opened its doors and became a regular stop for school field trips to teach students and others who want to learn more about the space program and Downey’s historic role in it.

The NASA site reuse deal was one of three community projects listed by Downey in its application for an All-America City Award. The other two projects were the “GOOD” program (Gangs Out of Downey) and the Keep Downey Beautiful initiative, an effort by the city public works department to enlist young residents in efforts to clean-up litter, eliminate graffiti, pull weeds and learn about the local environment and how to keep the water supply clean.

You probably know of other communities that have lost a major employer and found innovative ways of replacing the lost jobs. What did they do to overcome the tough times and bring in new jobs and economic activity? Fill in the box below to let us know about those examples.

Happy holidays!

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Mike McGrath is senior editor and chief information officer for the National Civic League. A former newspaper reporter and magazine writer, he is editor of the quarterly National Civic Review, which will be beginning its centennial year of publishing this spring.

Mike’s posts will appear every Thursday on the State of the Re:Union website.