CONCORD, N.H. (AP) – Berlin, a city whose future was filled with gloom only a few years ago, has succeeded in turning around its fortunes, first with a state prison and now apparently with approval for a federal penitentiary.

A federal spending bill passed by Congress and signed by President Bush includes $154.5 million for construction of the federal prison, which would be one of the largest projects in state history.

U.S. Sen. Judd Gregg, who played a major role in making it happen; Mayor Bob Danderson, who came up with the idea for the prison; U.S. Bureau of Prisons director Harley Lappin; Gov. Benson, and local officials will make a “major announcement” on the prison Friday.

“I can’t wait until I see the building,” Danderson said Wednesday.

With about 1,000 beds, it would be twice the size of the state prison that opened in 2000 at a cost of $30 million and has brought with it good paying jobs at a time when the area was staggering under the possible closing of the paper and pulp mills in Berlin and Gorham.

“This is really important to the economic well being of Coos County and surrounding areas – a real shot in the arm for Berlin,” state Sen. John Gallus said.

“Over the last 50 years, we’ve had a lot of economic misfortunes. Employment in the North Country has been pretty poor. Berlin once was city of more than 26,000; now it has 10,000 residents. Coos County was the only county with an outmigration of people.

This is really a great day to say on the horizon we have this prison.

“It’s sad to say that prisons are sort of a growth industry, but they have a stabilizing effect. The state prison has been a real godsend for us.”

Now there are 104 federal prisons housing more than 174,000 inmates, compared with 44 prisons and about 24,000 inmates in 1980. Other states -among them New York, Colorado and Texas – also have communities with state and federal prisons.

Danderson also could see nothing but benefits for the state’s northernmost city and county, where good-paying jobs are scarce.

In the North Country, he noted, only 51 percent of employers provide any kind of health insurance and retirement, and jobs that pay $37,000 are not easy to find. He said the prison would provide 200 jobs, more during construction, which could begin in 2005 after an environmental study. It would take three or four years to build.

“When you have young people with good median incomes, they will invest in their properties,” he said, and that means more spending and a better economy.

“Prisons also are not affected by downturns of the paper industry or other industries, they’re environmentally friendly, they don’t have the bad smells, they’re quiet, and they’re in areas that won’t affect the community,” Danderson said.

“I haven’t heard of them ever laying off workers.”

It almost didn’t happen.

In November 2001, Berlin voters rejected the federal prison idea in a nonbinding referendum, 1,108-1,018. But in the months that followed, residents Tom Boutin and Paul Cusson gathered enough signatures for another vote, and it passed by almost 2 to 1, Danderson said.

“Give all the credit to Senator Gregg. Without him, it wouldn’t have happened,” Danderson said of the senator’s advice and help in shepherding the project through federal obstacles. Gregg is chairman of the Senate Appropriations Subcommittee that oversees funding for the Justice Department and the Bureau of Prisons.

Barry Kelley, co-owner White Mountain Lumber, was one of those who originally opposed the state prison, but has changed his mind, and said he would not oppose a federal prison.

“It’s been a very good citizen; it’s been a good neighbor,” he said of the state prison. “The downside I saw in the state prison didn’t materialize.”

He said there are more people in the city, more people buying things. His own company realized some business from the prison construction, and he expects to get some from the federal construction.

AP-ES-01-28-04 1723EST