Editor's note: This is the second part of a three-part series about economic and community development in Washington County, Md. The county, which includes Hagerstown, shares many demographic similarities with Mercer County.

In the early 1960s, Hagerstown, Md., saw economic disaster on the horizon.

Once employing nearly 10,000,

Fairchild Inc.'s aviation plant, which once employed nearly 10,000 people, was laying off thousands due to a downturn in orders. By the 1980s the company had left the area. But the town and the county it sits in, Washington County, began fighting back before the departure.

When the downturn began four decades ago, community leaders banded together to form a non-profit development agency to create new industrial parks.

Cobbling together $164,000 in donations in the early 1960s, the Hagerstown-Washington County Industrial Foundation Inc. was formed.

From the get go the foundation had to sail through rough seas because of Fairchild's dwindling fortunes, said Richard Phoebus, president and chief executive officer of the foundation.

"The place was coming apart,'' Phoebus said. "We had a lot of older smaller businesses that were dying at the same time.''

With one out of six people in the greater Hagerstown area employed by Fairchild, unemployment soared into the double digits. To make things worse, almost no land was ready for industrial use.

The foundation sunk its money into 300 acres to create an industrial park and slowly began selling lots.

"Our goal was to diversify our industrial base into smaller chunks, get quality employers and reasonably good wages," Phoebus said. "So we found ourselves turning some people down."

One criteria the foundation steadfastly stands by is that it refuses to sell land to anyone on speculation. Contracts are drawn up requiring businesses to build on the property within 18 months. If they don't, the business must sell the land back to the foundation.

"We don't want people to speculate with that land,'' Phoebus said. "We want employers."

A retired local banker, Phoebus took the helm of the foundation in recent years. The organization now has $5 million in assets with $500,000 in debt, he said.

None of this happened with lightning speed. It took 35 years to sell all the lots in the first industrial park, Phoebus noted. Yet the foundation persisted and has sold hundreds of acres to various businesses, including Citicorp, which erected a credit card service center near the local airport that now employs 2,500.

There have been failures. In the 1980s the foundation bought the local fairgrounds and tried to operate the property as an event center. Unable to generate enough business, Hagerstown turned the land into an athletic area.

Over the years the foundation has worked with the Hagerstown-Washington County Economic Development Commission, the lead marketing agency for the county. The foundation created the sites while the agency worked to sell it. In all, there are more than 6,600 people employed by businesses in the industrial parks created by the foundation.

The county pitched in by committing funds and secured state and federal grants for sewer and water lines and other infrastructure for the industrial parks.

Since industrial development around the city has become so successful, the foundation is getting out of the business and is turning it over to private developers.

"We don't want to be in competition with a well-run private industry,'' Phoebus said.

The foundation now has set its sites on downtown Hagerstown. The organization has bought buildings in the heart of the city and is overhauling them for tenants. He acknowledges the foundation is venturing into uncharted waters.

"Someone has to take a leap of faith to do this," Phoebus said. "We're willing to take chances."