Rivalry heats up to be economic King of South
By Dan Chapman
The Atlanta Journal-Constitution
Sunday, May 10, 2009
CHARLOTTE — From his 15th floor City Hall aerie, Mayor Pat McCrory sees what Atlanta’s missing.
To his left sits the soon-to-be-completed NASCAR Hall of Fame. Straight ahead is the headquarters for GMAC Financial Services. And, running up the spine of this slim and sleek city, rolls a Euro-sleek light-rail train.
Atlanta lost to Charlotte in its bid for the NASCAR museum, which opens soon.
Charlotte’s Lynx light-rail line runs less than 10 miles. But it’s sleek and popular.
Charlotte’s Uptown skyline boasts almost all new buildings, a blue-glass canyon.
Atlanta offered big bucks for NASCAR, tried to land GMAC and has suffered a long, unrequited romance with light rail. Charlotte, like a feisty, undersized boxer, punches above its weight.
“We could’ve easily become a Knoxville, Greensboro or Richmond,” McCrory said. “Instead we compete, fortunately, with Denver, Dallas and Atlanta.”
Charlotte, the Queen City, maintains pretensions of one day surpassing Atlanta as economic King of the South. Sam Williams, head of Atlanta’s Chamber of Commerce, says dream on.
“We don’t really compete tooth-and-nail with Charlotte because the companies we go after (are) in the international trade, logistics and biomedical fields and they’re not looking to go to Charlotte,” he said. “Dallas, Tampa and northern Virginia — those are our consistent competitors.”
But some observers say recent missteps by Atlanta — over traffic, transit, water, the environment and politics — may enhance Charlotte’s position.
Nothing underscores Atlanta’s angst like the state legislature’s refusal last month to let the region decide its transportation fate. A traffic-choked Atlanta threatens to repel businesses and individuals. Growth could slow to a crawl.
“We’ve had the opportunity to learn from Atlanta’s mistakes,” McCrory said in a recent interview. “We’ve seen how to grow and how not to grow. We’ve seen what works and what doesn’t. We’ve had the advantage of growing up second.”
And, for the foreseeable future, that’s where Charlotte will remain. With nearly three times the population and a much more diverse and global economic base, Atlanta won’t relinquish its top-dog crown anytime soon.
Charlotte will bide its time, happy with its steady rise from textile town to banking capital. It too experiences bigger-city growing pains. The recession gobsmacked the city’s financial industry. Charlotte must get its economic house in order.
But once it does …
“Clearly the gap has narrowed,” said John Connaughton, an economics professor at UNC Charlotte. “Will Atlanta always be bigger? Yes, during the lifetimes of most of the people here today. Long term? That’s anybody’s guess.”
Traffic a big issue
Atlanta business and civic leaders all but accuse Georgia’s General Assembly of abandoning Atlanta.
Last month the legislature declined for a second straight year to let Atlanta and other regions hold sales-tax referendums to deal with traffic. A year ago Gov. Sonny Perdue released a study saying Georgia could lose 320,000 potential jobs over the next two decades if traffic congestion wasn’t addressed.
The Legislature has also stymied commuter rail. The General Assembly even denied MARTA the opportunity last month to use its own money to fill budgetary holes.
Chick Krautler, director of the Atlanta Regional Commission, said it is “a travesty (and) an absolute outrage that the leaders of this state can’t deal with transportation.”
Williams, president of the Metro Atlanta Chamber, added last week that Charlotte’s “business and political leaders have addressed some critical issues like transportation much better than we have.”
In the long term, “it could absolutely position Charlotte at a competitive advantage over Atlanta,” he said.
It wasn’t the first time, Williams noted, that Georgia legislators unwittingly abetted Charlotte’s rise at Atlanta’s expense. Until a decade ago, the General Assembly prohibited the state’s banks from growing as big as their North Carolina neighbors. N.C. banks had gobbled up four of Georgia’s biggest banks. Charlotte today is the nation’s No. 2 bank town.
“They have made an incredible investment in the banking industry and our General Assembly let them take (the lead),” Williams said. “The rest is history.”
Still, Charlotte suffered from the “Ch Factor”—Charlottesville? Charleston? Where is Charlotte? — for years, even after Hugh McColl built Bank of America into a financial juggernaut. Civic insecurity began to diminish, though, once professional basketball and football came to town.
And then came NASCAR.
After a fierce and expensive bidding war, Charlotte bested Atlanta three years ago for the stock car museum, headquarters and adjoining hotel. Roughly 400,000 visitors annually are expected to traipse through downtown — “uptown” in Charlotte booster-speak — and spend money in restaurants and hotels.
Williams said, “NASCAR knew all along they were going to Charlotte. They just used Atlanta to up the ante.”
That may be true, but Charlotte local, state and corporate officials came up with a $154-million financial package. When it was over, Atlanta Mayor Shirley Franklin sent McCrory a congratulatory bouquet of flowers.
Charlotte’s ability to wrangle railroad money from Raleigh and Washington impresses Atlantans. A decade ago, the N.C. General Assembly gave Charlotte-Mecklenburg County the right to tax its citizens for light rail.
Charlotte is also well-positioned, unlike Atlanta, to become one of the first stops on a high-speed rail line running to Washington. By comparison, Atlanta may have to return $83 million in federal money for a commuter line to Lovejoy because no local matching money has been found.
“Almost 90 percent of our clients say traffic in Atlanta is a nightmare,” said Dennis Donovan, a principal with a New Jersey site-selection firm. “Atlanta is stuck in the mud because of these obdurate legislators who should be voted out of office.”
Light-rail train a boost
Back at the window, McCrory watched the light-rail train glide through uptown.
“It’s exceeded all expectations,” the mayor said. “I expected to be kicked out of office by this thing. We went through a lot of pain.”
State and federal money covered three-fourths of the Lynx Blue Line’s $463-million construction cost. The local half-cent sales tax covered the rest.
Charlotte is poised to extend the line to UNC Charlotte, an 11-mile jaunt northeast of uptown. The transit authority also hopes to tap federal “stimulus” money to build a 25-mile commuter train line heading north from the city.
Bob Morgan, president of the Charlotte Chamber, said the Blue Line has prompted $3 billion in economic development, much of it located in a condo-shopping-restaurant district just south of downtown.
A ride through uptown’s blue-glass canyon, though, shows Charlotte at its finest. Duke Energy is building a 48-story headquarters alongside a new museum, theater and African-American art center on Tryon Street. The NASCAR museum sits three blocks to the east.
A still-new basketball arena, entertainment district, skyscrapers, condos, hotels and more line both sides of Tryon. The pace of construction dizzies. Hard hats outnumber pinstripes, no small feat in a banking town.
“I love Charlotte,” said Dave Schroeder, who moved the headquarters of his corporate hospitality company from Atlanta to Charlotte. “I live up north in Davidson, so I get a little bit of that small town feel. And there’s dynamic growth downtown. I get the best of both worlds.”
Charlotte’s unofficial motto — “a great place to raise a family” — pleases as well as irks the city’s pooh-bahs. They’ve worked mightily the last two decades to get out from under the parochial, little-brother-to-Atlanta shadow. In uptown, where 10,000 people live, they’ve succeeded.
Beyond uptown’s pizzazz, though, Charlotte still lags Atlanta in virtually every big-city category. Atlanta counts four — downtown, Midtown, Buckhead and Atlantic Station — high-rise business, living and entertainment districts.
Atlanta is also home to four major league sports teams and a slew of universities — Georgia Tech, Morehouse, Georgia State, Emory — that the Queen City envies.
Morgan, of the Charlotte Chamber, said the 1996 Olympics “put Atlanta on a stage we can only aspire to.”
He continued, “Atlanta was the first city of the South and, arguably, it still is. But we’re now able to compete with Atlanta for corporate headquarters and that’s something that’s happened in the last 10 years.”
GMAC chose Charlotte over Atlanta last year. Williams said, “We didn’t really pursue them.”
All cities crave the young and educated and those companies that hire them. Charlotte’s 11.4 percent unemployment rate, compounded by layoffs at Wachovia and Bank of America, provides the Queen City with an eager employment pool.
“Ironically, as the financial system got worse, there was a terrific opportunity for a young company like ours to find young people here,” said Schroeder, who moved Quint Events’ headquarters from Atlanta to Charlotte a year and a half ago.
Condo project blues
Only one thing mars McCrory’s view of uptown: a half-built condo project that’s gone bankrupt.
“It’s blocking my view,” the mayor said. “It’s the first vacant building we’ve ever had uptown. It’s a sad thing.”
For now, Charlotte is content tending its civic knitting, getting the banks back on their feet, finishing the downtown building boom and securing money for the next round of rail projects.
McCrory’s 14-year run as Charlotte’s mayor ends this year too. He’ll then do some business consulting. He might even work with the competition.
“I see Charlotte and Atlanta forming a coalition to compete with other regions throughout the world,” McCrory said. “In the long term we might end up being more partners than competitors.”
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