Turnaround town

First in a series on changing cities

When Pat Kelley was growing up in the 1960s, Chattanooga was still a bustling industrial town. Textile factories, chemical plants, and steam boiler manufacturers employed men and women by the thousands. As a boy, Kelley caught glimpses of fire flashing in the foundries and watched as steel mills hurled atomized carbon into the humid Southern air.

The Western and Atlantic Railroad first put Chattanooga on the map in 1850, ultimately fueling a post–Civil War economic boom that turned the sleepy Tennessee town into a manufacturing powerhouse and transportation hub. “The Dynamo of Dixie” reached its commercial peak in the early 1960s, but with prosperity came pollution.

“The story went that [when] men wore white shirts to work downtown, between the foundries and the industries, they would go home and their shirts would be blackened,” Kelley said. “There was a lot of smoke.”

Making matters worse, the surrounding mountains trapped the growing smog under a lid of warm air—a phenomenon known as “atmospheric inversion.” In 1969, a federal air quality report declared Chattanooga the most polluted city in the United States. In the 1970s new EPA regulations, economic downturn, and foreign competition wreaked havoc on industrial towns across America: Chattanooga was not spared.

“There was no growth,” Kelley said. “The industrial market that was there, all of a sudden wasn’t.”

After graduating high school, he moved to Knoxville to study engineering at the University of Tennessee, returning to his hometown in 1975 to take a job with the Tennessee Valley Authority (TVA). Even in a bum economy, nuclear power plants need engineers. From his downtown office, Kelley watched the city die: “From Fourth Street down to the [Tennessee] River was just decrepit no man’s land.”

One by one, factories closed, passenger trains stopped, and foundries fell silent. Blue-collar jobs disappeared and the jobless fled toward brighter horizons. The interstate highway redirected traffic (and the business it brought) away from downtown. Warehouses, once full of goods and bustling with activity, emptied—their bare skeletons remained behind as towering testaments to a bygone era. “The Dynamo of Dixie” deteriorated to a 20th-century environmental and economic wasteland.

In the 1980s, though, Chattanooga began reinventing itself: It is now home to a thriving entrepreneurial ecosystem of tech startups, logistics hubs, and small businesses of all kinds. A 2017 American Lung Association report declared the city’s air quality, once the worst in America, to be among the best in the country, and Chattanooga has earned a reputation as an outdoor adventure mecca.

Formerly crumbling neighborhoods are filled with the sounds of construction and moving trucks as businesses and people flock in, drawn by the low cost of living and high quality of life—yet in this city of 179,000, many Chattanoogans are still in poverty.

CHATTANOOGA’S STORY OF REBIRTH began in the early ’80s when civic leaders, philanthropic foundations, and nonprofits launched initiatives aimed at reimagining what Chattanooga could be. An alphabet soup of projects and partnerships organized conversations with the community, drew up plans and proposals, and sent civic leaders across the country to study other struggling cities that had turned themselves around.

River City Company, an economic development nonprofit born from those dialogues and dreams, spearheaded a long-term city revitalization program centered around downtown and the waterfront. River City built and opened in 1992 the Tennessee Aquarium on the banks of the river, the same area Kelley described as a “no man’s land.” The aquarium attracted tourists, changed the city’s image, and kicked off Chattanooga’s renaissance.

For the next two decades, the city’s public-private alliance continued to craft public spaces, building parks, plazas, apartments, and theaters. As the downtown area transformed, people moved back and businesses revived. Artists painted murals and installed other public artworks, bringing character and color to previously drab buildings and streets, celebrating local history, and “rebranding” struggling neighborhoods to stimulate economic growth. Increasingly, the city was a destination, rather than a place to avoid or escape.

Yet, even as the city developed, some continued to suffer.

Chattanooga’s aquarium. iStock

Chattanooga’s aquarium. iStock

Chattanooga’s aquarium. iStock

Chattanooga’s aquarium. iStock

Chattanooga’s aquarium. iStock

“When the foundries closed, almost all of the blue-collar jobs went away,” remembered Randy Nabors, who pastored New City Fellowship in Chattanooga for more than 35 years. “It was great for our health, [but] devastating for the black working class. … Some people left. Some people took what retirement they could. … But the real problem came for the next generation because there were no jobs for them to go into.”

White flight and a bevy of prestigious private school options took resources away from inner-city public schools, ultimately contributing to inner-city struggles.

“That’s one of the great embarrassments of Chattanooga,” said Nabors. “Some of the [public] schools are doing really well … but there are others that are constantly and consistently failures. And so the cycle continues: broken families, terrible public schools, functionally illiterate kids who graduate without a good education.”

New City Fellowship, Nabors’ church, decided to take the brokenness head-on, embracing holistic inner-city ministry. New City helped found six nonprofits, all dedicated to caring for and empowering the city’s poor and vulnerable. They worked with local youth, trained people in basic job skills, tutored school kids, ministered to widows, and set up a clinic for undocumented children.

Other churches and Christian nonprofits in Chattanooga paid attention to their city’s needs. Nabors cited a revival that took place at Lookout Mountain Presbyterian Church in the early ’70s: “All of a sudden, people got saved—and these were people who really owned Chattanooga. … They began to wake up and say: ‘We need to invest in our city.’”

Prominent members of that church gave money and pursued relationships with struggling communities. The Maclellan Foundation, a Christian philanthropic organization, began to focus grants locally.

IN 2010, Chattanooga’s publicly owned Electric Power Board (EPB) launched a public fiber-optic network known as “the Gig,” offering affordable internet at blistering speeds of up to 1 gigabyte per second—the fastest in America at the time. By 2015, EPB’s internet capabilities reached 10 gigabytes per second. Chattanooga began branding itself as “the Gig City,” a rising Silicon Valley of the South.

Suddenly, Chattanooga was a tech town.

The Gig positioned Chattanooga as a city on the cutting edge and kicked off a culture of entrepreneurship. Since the fiber network’s advent, the city has demarcated an official “Innovation District,” outside investors have ponied up more than $50 million in venture capital, and entrepreneurs have founded dozens of new businesses from microbreweries to freight logistics firms.

Not just the startup economy is booming. In 2011, Volkswagen inaugurated a new assembly plant just outside the city, bringing thousands of manufacturing jobs. An Amazon fulfillment center brought thousands more. Unemployment is at an 18-year low, hovering around 3.1 percent in December 2018.

Yet, as in many rapidly developing cities, economic success for some can mean rising costs for all: When rent and property taxes go up, many of the elderly or poor can no longer afford the houses they have occupied for decades (1 in 5 Chattanoogans lives on poverty-level income). Jobs may be relatively plentiful, but wages are often low or stagnant. A 2012 report by The Business Journals, a media company, listed Chattanooga as one of the Top 10 U.S. markets with “very pronounced inequality.”

Marco Perez, vice president of operations for Launch Cha, asks, “Is there an inclusive opportunity for everybody? … The answer is no.” Launch Cha is teaching entrepreneurship to members of groups underrepresented in the startup world: minorities, women, people from low-wealth communities. It’s considering extending its training to the elderly.

“When I started doing this work, people would tell me: ‘That’s great, but what we’re really looking for in Chattanooga is home run hitters,’” Perez said. “If you want home run hitters, you don’t look at a person and say: ‘You look like the type of guy that could hit home runs.’ You don’t look at an industry (tech), or a demographic (young, white, male). You teach everybody to bat. … Then you put extra resources around people with skill to actually scale up their idea. … I see this as part of the healthy economic development of an entrepreneurial ecosystem.”

Launch is one of several organizations working to extend the fruits of Chattanooga’s success to underrepresented communities. Tech Goes Home, a nonprofit, works to bridge the digital divide by teaching basic internet skills and providing affordable laptops to program participants. Hope for the Inner City, a nonprofit founded by New City Fellowship, runs various economic development and community revitalization programs, including soft-skills jobs training.

CHATTANOOGA’S CONTINUED SUCCESS may depend on how well opportunities extend to the whole community. “Across the board, we’ve been really blessed as a city,” Nabors said. “There is no comparison to [how it was] when I first got here. It’s a wonderful place to raise a family—except for those trapped in the inner city. … As they say: ‘A rising tide floats all boats.’ But boats with holes in them don’t float well.”

“Chattanooga is a great self-promoter,” Perez said. “I actually don’t mean that negatively. … It functions very much in the mentality that a developer does. A developer will say … ‘Look, I know this [piece of land] looks like a swamp to you, but dream with me about what it could become.’”

Perez sees this ability to cast a vision for the future as Chattanooga’s greatest strength. Urban design, environmental cleanup, philanthropy, public art, the outdoor economy, the Gig, the entrepreneurial ecosystem, engaged churches—they’re all pieces to the puzzle, chapters in the story of a scrappy Southern town. But Chattanooga’s real secret sauce is the ability of its leaders and its citizens to adapt constantly.

Can the city improve for all its citizens? “This is a good city,” said Perez: “A lot of promise and potential, and the vision’s been cast. [But] we’ve got a long way to go.”