About Face: How Social Capital Transformed Chattanooga

Many regions are being bypassed in the shift to the Creative Economy. Although their ranks include a number of older industrial regions, like Buffalo and Grand Rapids, Michigan, Sunbelt regions like Norfolk, Las Vegas, Louisville, Oklahoma City, New Orleans and Greensboro, North Carolina are also in precarious positions. The big losers in this emerging geography are smaller cities and regions in the South and Midwest that are being left almost totally behind. —Richard Florida, The Rise of the Creative Class Based on this assertion, it’s not surprising that Chattanooga, Tennessee—a midsize Southern city that was once a major industrial center—is ranked an unimpressive 139th out of 268 regions in Richard Florida’s Creativity Index. However, Florida is clearly not taking into account the factors that have brought Chattanooga the praise of a broad cross-section of national media: The Utne Reader in 1997 pronounced the city one of “America’s 10 Most Enlightened Towns”; Parade magazine in 1999 called Chattanooga “The Reborn American City”; and Outside Magazine in 2001 listed it as one of 10 “Dream Towns”.

Nothing Short of Renaissance

Surrounded by mountains, Chattanooga sits on a dramatic 180-degree bend in the Tennessee River. From the city’s incorporation in 1839 through the early 20th century, the distribution capability of the river and ensuing development of railroads enabled Chattanooga to become one of the largest cities in the Southeast, dubbed “The Dynamo of Dixie” for its industrial prowess. Coca-Cola was first bottled in Chattanooga; heavy industry boomed, especially during the first and second world wars; during the Depression, the Tennessee Valley Authority brought jobs, widespread electrification, flood control, and improved river navigation to the region. The city that aspired to be the “Pittsburgh of the South” was succeeding, and making tremendous fortunes for the families that owned the factories. 

By 1969, the manufacturing economy had begun to falter, and the pollutants from a century of heavy industry—trapped by temperature inversion caused by the surrounding mountains—prompted the federal government to pronounce Chattanooga “the dirtiest city in America.” In those days, the sky was a brown haze, cars used their headlights during the day, and well-dressed businessmen changed their soot-covered shirts at noon. Workers lived mostly in the valley; the elite lived in the cleaner mountain air. As the city’s prosperity declined, race and class relations grew tense. Chattanooga was insular, dirty, and depressed—well on its way to being “left behind.”

“Those were good years not to be in Chattanooga,” James Frierson says of the 25-year period from age eighteen when he lived in Nashville, Tokyo, Washington, DC—anywhere but his hometown. In the mid-1990s, Frierson brought his family back to Chattanooga, back to a city that he opines “has undergone nothing short of renaissance.”

Evidence of renaissance is everywhere in downtown Chattanooga today: the sky is once again blue; the Tennessee Aquarium, built in 1992, has been such a resounding success that a major addition is in the works (part of the 21st Century Waterfront Plan, an initiative that will invest $120 million in the riverfront area through May 2005); older buildings are being redeveloped for residential apartments (from 1990 to 2000 there was a 56 percent increase in owner-occupied residences downtown); extensive roadwork is being done to improve the street grid; and scores of civic groups travel from cities all over the globe to study “The Chattanooga Process.”

Social Capital Communities vs. Creative Centers

Chattanooga has purified its air, revitalized its downtown, and caught the attention of the world in doing so. Yet it falls short of the critical mass of “technology, talent, and tolerance” needed to create what Richard Florida would deem a Creative Center. Florida’s Creative Class—which he estimates at over 30 percent of the nation’s population—looks for “thick” labor markets (with many employment opportunities in a given field), rich varieties of lifestyles, plentiful venues for social interaction, diversity of race and culture, and “authenticity,” a city’s unique sense of place. Compared to cities of similar size, Chattanooga has a relatively “thin” labor market, fewer lifestyle/nightlife opportunities (good luck getting a cup of coffee or a restaurant meal after 10 p.m.), and a low level of diversity. In line with Florida’s thesis, Chattanooga has experienced relatively slow population and economic growth.

Where Chattanooga does meet Creative Center criteria is in its authenticity and in some lifestyle options—especially the outdoor sports scene. Most Chattanoogans, however, when asked about their decision to live in the city, list factors that Florida discounts: they speak of a strong sense of community, tight social networks, churches, and the “small town feel” of their neighborhoods. These factors exemplify what sociologist Robert Putnam calls social capital. In his 1993 article “The Prosperous Community,” Putnam outlined how social capital can be a resource for a community:

Stocks of social capital, such as trusts, norms, and networks, tend to be self-reinforcing and cumulative. Successful collaboration in one endeavor builds connections and trust—social assets that facilitate future collaboration in other, unrelated tasks. As with conventional capital, those who have social capital tend to accumulate more—them as has, gets.

These “trusts, norms, and networks” of social capital are inured in the Chattanooga experience. In two years of working in Chattanooga, I have seen dozens of contracts executed without so much as a glance at the language, the parties instead relying on trust from long-standing relationships. As a newcomer to the city, I am still amazed when, upon meeting a new person, I am sometimes asked the presumptive question “Which church do you attend?” I am similarly fascinated by the reaction to my surname—which, I have been told countless times, is “not a Chattanooga name.” Even more curious is the reaction of the natives to my question “Where did you go to school?” Most adults in a business context would naturally reply with the name of their university. Chattanoogans, on the other hand, will tell you where they went to high school.

Besides evoking surprise from some newcomers, there are potentially more serious pitfalls for communities with high levels of social capital. Richard Florida, in The Rise of the Creative Class, suggests a polarity between social capital communities and Creative Centers, and draws on the research of sociologist Robert Cushing to argue that communities with high levels of social capital are actually at an economic disadvantage:

Social capital had little to do with regional economic growth. The high social capital communities showed a strong preference for “social isolation” and “security and stability” and grew the least—their defining attribute being a “close the gates mentality” according to Cushing. The low social capital communities had the highest rates of diversity and population growth.

Chattanooga was once mired in this “close the gates mentality.” Jack Lupton, heir to a Coca Cola fortune and a regular on the Forbes list of “400 Richest Americans,” when interviewed by the Chattanooga Times in 1986, described just how insular Chattanooga’s elite had been in his father’s generation:

They wanted to keep this place a secret. They didn’t want anybody knowing what a nice little deal they had here. Well, they were full of s—-, as far as I’m concerned.

In Chattanooga, Robert Putnam’s claim that “social capital greases the wheels that allow communities to advance smoothly” came to fruition only after the trauma of a weakened economy and the embarrassment of being the dirtiest city in America. The fallacy of “security and stability,” once exposed, gave way to the restless desire to improve the city.

Leveraging Social Capital

By the 1980s, city and business leaders had already taken aggressive steps to clean up the air, yet Chattanooga had all but lost its downtown: sprawl had pulled its residents to the suburbs, “urban renewal” had destroyed the existing downtown housing stock, and many sites that would otherwise have been prime real estate were vacant due to environmental contamination. “Downtown was a ghost town after 5 p.m.,” recalls Chattanooga native Russell Elliot, “and there were tumbleweeds blowing down the street on the weekends. I never imagined we would be where we are today.”

Jack Lupton certainly helped. His personal fortune and grants from the Lyndhurst Foundation (the Lupton family’s philanthropic endowment) provided seed capital for the revival of Chattanooga’s downtown. Their first major success came through funding the operations of a group called Chattanooga Venture, which in 1984 drew 1,700 citizens to a twenty-week series of meetings that established not only the goals, but also the process for improving the city. These “charettes”—really group-brainstorming sessions—are the hallmark of what writers chronicling the city’s revitalization have called “The Chattanooga Process.” Chattanooga always had the resources—sufficient financial and social capital—to enact changes, and now it had a process for focusing the support of everyday citizens, as well as civic, business, and political groups, at the onset of any major initiative. Unity around a common agenda is facilitated by the city’s high level of social capital; to put it simply, Chattanoogans know how to cooperate. They embody Robert Putnam’s democratic ideal: “In a community rich in social capital, government is ‘we,’ not ‘they.’”

With clear goals in mind, Chattanooga began to institutionalize mechanisms of change through the creation of formal public/private partnerships to oversee and fund new initiatives. The city has long had one of the highest per capita charitable endowments of any city in the South, but prior to the formation of public/private partnerships, there were no entities that combined and focused charitable funds on broader plans for improving the city.

Out of “The Chattanooga Process” have grown developments like the Riverwalk, the Aquarium, the revitalization of downtown’s Southside area, and hundreds of smaller projects. In the past year, another major initiative has been successfully launched: the 21st Century Waterfront Plan. Mayor Bob Corker has raised $120 million for the plan despite a weak economy and budget difficulties at the state and local levels. (He passed a hotel tax for $56 million, raised $51 million in private donations, and collected $13 million from the state and federal governments as well as from city land sales). By soliciting the community’s ideas early on in charettes, using data from studies commissioned by the RiverCity Company (a public/private partnership), and garnering huge contributions from the private sector, the audacious plan is already under construction. Corker was unequivocal about this pace in his State of the City address in May of this year: “Only in Chattanooga can big dreams like this become reality so quickly.”

Another major goal expressed in Chattanooga Venture’s public meetings was decent housing for all citizens, which led to the formation of Chattanooga Neighborhood Enterprise (CNE), an organization that since 1986 has helped over 5,500 residents buy or renovate their homes. CNE’s board of directors reads like a list of “Who’s Who in Chattanooga” and receives the bulk of its funding from local foundations. The organization creates affordable, decent housing for low-income residents and does so along design guidelines that improve the built environment in and around downtown Chattanooga. Admittedly the latter concern—which has benefited wealthy real estate investors—is less emphasized in public.

Although the leveraging of social capital to create widespread change has produced fantastic returns for the community, it was not just a sudden fit of altruism. Robert Putnam has pointed out that social capital can thus be simultaneously a “private good” and a “public good.” Some of the benefit from an investment in social capital goes to the bystanders, while some of the benefit redounds to the person making the investment.

When the “good old boys” decided to revitalize their city, they were partially motivated by personal gain. Jack Lupton’s many real estate assets downtown have certainly benefited from the turnaround. Current mayor Bob Corker and his predecessor, Jon Kinsey, are businessmen who realize that the best way to appreciate their assets is to improve their community—Corker is Chattanooga’s biggest commercial landlord; Kinsey is principal of a major real estate development firm that will soon begin work on several parcels in conjunction with the 21st Century Waterfront Plan. Lupton, Corker, and Kinsey are just three of many names taking part in an agenda that simultaneously serves community and private business interests. The well-greased wheels of social capital are maintained to some extent by the entire community, but primarily by the relationships amongst those individuals that Richard Florida calls the Creative Class.

The Conservative Creatives

Florida’s thesis seems to overlook the probability that a group of people who comprise over 30 percent of the nation’s working population will probably not all be driven by the same values.

According to Florida, 26 percent of those employed in Chattanooga are members of the Creative Class. Having lived in Chattanooga for two years, I propose that the majority of this group belongs to a unique subset of the Creative Class—what one might call Conservative Creatives. These are people who are as likely to be seen at church, or at a private club, as at a coffee shop; people who are attracted to the smaller cities with environments they perceive to be safer; people who seek smaller social networks with stronger ties; people who don’t necessarily place a premium on diversity. Yet these are people who are otherwise—in terms of education, occupation, and what Florida describes as the desire to “establish their own identity in places, and also to contribute to actively building places that reflect and validate that identity”—well within the parameters of the Creative Class. These are people that elect the Republican politicians who can give the best “stump speech” on sustainable development.

Chattanooga is certainly not a creative mecca. But while visitors to Chattanooga may find that the nightlife opportunities are few and close early, these opportunities do come in the form of original, independent establishments in unique old buildings—all situated in a downtown that ten years ago had no nightlife whatsoever. Those visitors will find citizens happy with their conservative lifestyle, yet willing to settle for nothing less than radical improvements for their city.

Increasing Returns to Scale

Some visitors even decide to stay. Ernest Kirk, a businessman whose small electric vehicle company recently announced plans to relocate to Chattanooga, is excited to find “forward-thinking people in a very conservative area.” Kirk, along with company founder David Rush, runs PaloVerde EST, Inc., a manufacturer of Low Speed Electric Vehicles (think of roadworthy golf carts). The company plans to bring 100 jobs to Alton Park, an area of Chattanooga’s inner city so distressed that it recently received a HOPE VI grant to demolish and rebuild its public housing. In describing their decision to move to Chattanooga, Rush talks of the “tangibles”—like economic incentives, distribution routes, and the labor pool—which narrowed his search for a relocation site to three states, and the “intangibles”—like “how people acknowledge you in the streets, how they talk to you in restaurants,” and the “spirit” of the city—which gave Chattanooga its competitive advantage. In addition, Kirk feels that in Chattanooga, PaloVerde’s products “could be showcased within a broader vision.” This broader vision—sustainable development—resulted in one of Chattanooga’s proudest stories: downtown’s free electric shuttle bus system.

Chattanooga is the home of Advanced Vehicle Systems (AVS), a manufacturer that pioneered the development and production of electric shuttle bus technology. In the early 1990s, downtown Chattanooga’s redevelopment had progressed to a point where demand for a public transportation system was apparent, and the citizens who had worked so hard to improve air quality were reluctant to bring more diesel engines into their city. AVS—owned by several “old-line” Chattanoogans—licensed a technology developed in Santa Barbara, California, and adapted it to Chattanooga’s wider climatic range. Today, AVS buses run in several cities around the nation—most famously Miami Beach, Florida—but Chattanooga still has the largest electric bus fleet in the nation. Although PaloVerde has no direct business connection with the electric shuttle fleet, Rush and Kirk feel that their business will be understood and supported by a community that has already pioneered similarly “green” transportation technologies. In addition to these new technologies, sustainable development is making headway with innovative construction practices. Downtown’s newly built Conference Center, Development Resource Center, and elementary school all incorporate novel use of natural daylight, energy efficiency, and environmentally friendly storm water collection techniques.

Possibly more impressive than the specific techniques and technologies of sustainable development is the eagerness with which Chattanoogans broadcast these accomplishments. When Outside Magazine wrote about Chattanooga, it offered one warning: “Careful—the boosterism is contagious.” Many of the city’s most vocal boosters are from a growing demographic body of Chattanooga natives who have moved back to the city, primarily for a better environment in which to raise their children.

There is also an influx of new people. Census data indicate that in comparison to the 1980s, when Chattanooga’s population grew only 1.5 percent, the 1990s saw the city’s Metropolitan Statistical Area population swell by 9.6 percent to 465,161 people in 2000. While Atlanta, Chattanooga’s nearest neighbor to the south, grew 38.9 percent and is ranked 14th overall in the Creative Index, it is rife with infrastructure problems and suburban sprawl that create notoriously brutal commutes. Knowing that the cars around you contain fellow members of the Creative Class probably provides little consolation to people who must spend hours each day in traffic. The media in both Atlanta and Chattanooga have reported an apparent trend of Atlanta residents packing up their suburban homes and moving to Chattanooga. Some continue to telecommute to their workplaces in Atlanta—thus effectively “thickening” Chattanooga’s thin labor market—but many are taking jobs in Chattanooga, often trading pay cuts for improved “quality of life.”

Not content to lure people “one at a time,” the city continues to fortify its economic prospects using the resources of the surrounding region. In this pursuit, Chattanooga has become part of a high-speed fiber network between the National Laboratory at Oak Ridge, TN, the University of Tennessee at Chattanooga, and Georgia Tech University. This fiber network recently enabled the University of Tennessee at Chattanooga to become the new home of a major Applied Computational Engineering program, the SIM Center, which will relocate fourteen PhDs to the city, creating Chattanooga’s first doctoral program—all while using the resources of a supercomputer in Oak Ridge. City leaders hope this will be the first of many advantages gained by cooperating with neighboring cities, in an effort to expand Chattanooga’s stock of social capital to a regional level.

“The Chattanooga Process” is ongoing. Though its workings are impossible to classify exclusively within the Creative Class and social capital paradigms, the “Dynamo of Dixie” has become a 21st Century City whose conservative members of the Creative Class are effectively parlaying social capital into a new era of civic pride, urban revitalization, and environmental sustainability.

The Changing Face of Chattanooga

I recently was enlisted to guide a tour of thirty executives from Mycal, Japan’s second largest retailer, through Chattanooga’s downtown. The high-performing workers, who earned this trip as part of an incentive program, arrived jet-lagged though intent, with paper and pens ready to record insights about the city’s revitalization. The tour ended with a walk through the Tennessee Aquarium. As large freshwater fish swam past us, I conversed with members of their group (struggling in my broken Japanese and their broken English) about the ways a community can revitalize itself; I suggested that Chattanooga’s process could be summarized as having bold goals for one’s community and strong social ties to accomplish those goals. Everyone in the group nodded vigorously, and one woman said quietly: “It’s about face.”

Chattanooga’s face has changed in thirty years from an expression of embarrassment and depression to one of pride and excitement. It’s a city that, by continually finding within itself the resources to progress toward its goals, has found a way to ensure that it won’t be left behind.