Tales of Two Cities: What Chicago and Charlotte Say About the Future of America

[Evergrey]

http://www.britannica.com/blogs/2009...re-of-america/


Tales of Two Cities: What Chicago and Charlotte Say About the Future of America

Jon Talton - October 8th, 2009


Sometimes disparate events bring portents (and sometimes not). I read the news about Chicago failing in its bid for the 2016 Olympics and the management malpractice at Bank of America and reached one conclusion: America will build no more great cities.

Chicago became a great city despite barriers that would seem formidable, especially its manic orientation toward commerce (as opposed to the Paris built by Haussmann) and its decades of racial strife and white flight. And yet a great, global city did arise, celebrated by poets, novelists and academics. Chicago had great bones because it came of age during a time of great architecture and civic design (its most celebrated, Daniel Burnham, said, “Make no little plans. They have no magic to stir men’s blood…”).



Chicago (Photo: Hisham F. Ibrahim/Getty Images)

Blossoming before the car, it enjoyed urban concentration. Perhaps most it all, it bred a different class of robber barons, for all of Dreiser’s contempt for them. The Chicago business titans wanted to show their wealth by building a great city. By the time of city destabilization of the 1950s, a critical mass had been established that would even allow Chicago to build Millennium Park in 2004.

The best hope to show that America was capable of still building great cities might have been Bank of America’s hometown of Charlotte. The North Carolina city was a middling Southern metro until about 15 years ago. Then a combination of competing business leaders and a moment in history — rather like Chicago, albeit on a smaller scale — turned Charlotte into the nation’s second-largest banking center, drew a population larger than Seattle and seemed on the brink of showing how automobile-age America could still build a real city.

Chicago, of course, will remain a great city in what may well be a diminished and declining America. That Rio de Janerio would win the 2016 Olympics seems obvious to anyone who has been paying attention: Asia and Brazil are on the rise, which will inevitably send America into relative decline. Yet some trends threaten to send the United States into the absolute decline of empires: a hollowed-out economy replaced by financial plays, overstretched and costly military commitments, deep debt to the world. Also, government paralyzed by political gridlock over spending and incapable of making forward-leaning investments for the new century. And businesses yoked to capital markets that demand profits to an atomized world of untethered wealthy and anonymous shareholders rather than allow for city building.

For American metropolitan areas, the results will at best mean a freezing in place of circumstances. Thus, Chicago, Seattle, Boston, Denver, Portland, et al, will remain interesting cities capable of attracting talent and capital, largely because they are living off the legacy of their past and the critical mass they have been able to generate. Critically, they will build deeper economic and social ties with the world. For the Sun Belt metropolises, especially Phoenix, they will be left with the ugly lookalike sprawl of the late 20th century — yet another moment in history, marked by cheap gasoline — but they will not build real cities. They will face increasing stresses because of their scale and sprawl. There will be a cruel threshing among cities of the old Rust Belt, most of whom have good bones but many will still follow Detroit into terminal decline. It is a criminal waste.

Real cities — with high concentration of population, walkable neighborhoods, transit, lovely civic design, high quality of life and numerous assets — will have a much better future in a world of expensive energy, global competition for talent and capital, and the increasing stresses and costs from sprawl’s environmental and social degradation.

Europe is enhancing its cities while Asia is building new ones. America is frozen in place.

That’s where Charlotte comes in.


Downtown Charlotte, N.C., from Marshall Park.

(Photo: Jill Lang/Shutterstock.com)

With two money center banks and the urbanist leadership of Bank of America’s Hugh McColl Jr., Charlotte built a sparkling downtown from nothing in little more than a decade. McColl could have put B of A’s corporate center (pictured below) out in a suburban office “park,” as has happened all over America, as its cities have cratered. Instead, he located it in one of downtown’s most blighted areas, transforming it. He created delightful downtown neighborhoods. Bank of America and First Union (which took the name of an acquisition, Wachovia) competed to build skyscrapers and then civic assets. Their support was essential to the completion of the first light-rail line in the South. Admittedly, it is a sterile downtown, lacking gritty urban character and its culture sector was yet to really develop. But Charlotte held the hope that America, particularly the car-centric Sun Belt, could rediscover good civic design and build cities again — especially in a place so rich, thanks to its banks.



Now Wachovia is gone, a victim of the greed and bad bets of its executives. Bank of America has been badly wounded in the banking mess, particularly its acquisition of Merrill Lynch. Now CEO Ken Lewis has suddenly announced his resignation with no succession plan. A bully who pushed out talent that intimidated him, Lewis has done further damage to the nation’s largest bank. Worse, he didn’t share McColl’s deeply personal passion to build Charlotte as a great city, yet he was the last major bank official with a tie to the city. It will be very hard for BofA to avoid the gravitational pull of New York as the capital of America’s capital markets. A successor could likely begin a slow — or fast — move of the headquarters north. This pressure will only be intensified by the consolidation and restructuring going on in finance now.

A city of boosters, Charlotte would of course put the best face on it. Charlotte would retain many banking jobs, regional offices and the leftover wealth of having been the nation’s second-largest banking center. It has a beltway and endless suburbs like everyplace else. But it won’t be a great city. Now the fear is palpable. A 50-story condo downtown tower sits unfinished. Wachovia’s incomplete headquarters will be taken over by Duke Energy, the only other major downtown headquarters.

It is a bit of tragic payback. Charlotte grew fat by acquiring the banks of other cities, depriving them of their leading corporate citizens and downtown employers. The increasing concentration of industries, lack of antitrust enforcement and favorable tax treatment for mergers have decimated the headquarters of America’s cities. And, as Charlotte showed, it matters where the CEO lives.

Life will go on, of course. Many will prefer suburban living, until the costs become prohibitive. Alas, government paralysis will make retrofitting much of suburbia for a non-1965 world impossible. Others will move to the remaining real cities, while others, still, will make what they can of their spaces. Immense treasure will be spent trying to revive the house-building machine of sprawl, failing. But, as Pericles said, “All good things come to the city because of the city’s greatness.” This will be reinforced by the realities of the 21st century. Alas, America’s capacity for city building has passed.

* * *

Jon Talton is the economics columnist for the Seattle Times and proprietor of the blog Rogue Columnist. His latest book is the investigative thriller The Pain Nurse.

[10023]

It's probably unfair to pick on Charlotte, but I don't see America building any more great cities.

And it's very possible that BofA won't be headquartered in Charlotte forever, unless North Carolina ponies up some serious cash at some point. The next CEO will likely be an outsider, and they'll be under pressure to put in place a real board of directors (i.e., not a bunch of Hugh's cronies from Carolina). These people won't have ties to the area, they've acquired a significant sized Wall Street firm in Merrill Lynch, and they've got their new huge tower in Midtown. Aside from the reticence of some existing directors and management to being a New York firm, there's no logical reason for them to be based in Charlotte. In fact, a move would probably improve management's ability to adequately oversee the firm's riskiest operations (which are in New York by necessity). Charlotte was never *really* a "banking center", just a city with the headquarters of two huge banks.

[TonyAnderson]

Not a glass-half-fulll type of guy I'm assuming?

[dktshb]

Interesting article. Cities that keep building in the same sprawling suburban fashion with no investment in transit will be dead cities by the end of the 21st century.

[Brandon716]

This is a most interesting read. I'm not sure we're headed into terminal decline or whether we'll rebound. We may just become stagnant... Who knows, but its obvious modern city building in America will be changed.

What I think Americans need to start embracing is transit friendly suburbs. We shouldn't be afraid to build suburbs with better bus transit to get to rapid transit and commuter rail corridors. There is nothing wrong with having a family car and using transit to get to work, having both a car and using transit is healthy for everyone instead of focusing on only either/or. There will always be people who refuse to use transit, and some people who refuse to use a car. But for most people they want a car to carry groceries around, and they aren't against hopping on a convenient train to work. A mix and match of services is healthy.

Can America build cities like this? Who knows. Only time can tell what the new economic circumstances will breed, especially as oil dries up.

[dktshb]

Just thinking and typing off the top of my head... I think with the economy the way it is it would be a good time for America to actually expect the Government to create jobs that remake and prepare our cities for the 21st century... sure I know the tax thing would suck but it would probably make for more competitive global cities.

[Jeff_in_Dayton]

John Talton forcast Obama's defeat in last years election (for what that's worth).

[Scottolini]

I suppose Texas cities aren't considered "The South" by the author because both Houston and Dallas had light-rail before Charlotte. And Atlanta has MARTA, while Miami has Metrorail, which are heavy-rail, but have been around for years. I'm not bashing Charlotte, because for a city it's size it has done some impressive things. But too act like it was doing things that many other cities across the country, the South included, have been doing as well is just weird.

[Matthew]

Bank of America's board has already changed. Of the six board members selecting the new CEO, half joined the board in the FleetBoston acquisition and they are leaning towards Brian Moynihan, who lives in Boston and joined Bank of America in the FleetBoston Acquisition, as the next CEO. I think most realized the banks would leave one day. I often said Charlotte should build the city up as much as possible before the banks left. The banking days was the time that shaped the city. Every city has a period of heavy growth that shapes the city. The loss of the banks is bad, but Charlotte is more than two banks. The city is home to retailers, an aerospace company, a major energy company (headquarters downtown), an auto company, a steel company and more. It is likely the end of major arts projects, spending extra for the best/show projects and 500+ foot/152+ meter skyscrapers. Other than that, the city won't change much. I do think the northern light-rail lines will reach completion.

[Black Box]

How depressing. It's on the minds of many folks, including me, you know, the whole just wondering how much worse things will get for us debate. We have an enormous national debt that keeps growing. I do have hope that maybe people are ready to re-imagine what America can do to better itself. Building smarter, relying less on fossil fuels (automobiles and coal plants, etc.). I'm not a fan of endless sprawl and freeways, lord knows, we have our share of those here. I'm typing emotionally, not logically. I'm often left to think..... How much longer can this go on? When will it all fall down? Why is it always about the bottom line to benefit fewer people? It's very difficult to see beyond this because it's gone on so long and look at where it got us. Sorry to be a bummer, I love my life, but I am not divorced from the reality our culture has produced and how that affects me.

[Black Box]

Just a bit more and I'm not providing a link to the story, but maybe someone from Phoenix can confirm this. I was reading in the Arizona Republic a week and a half ago about Phoenix's plan for 2050 and it was disturbing. Even if it doesn't get all built out or not at all built, just the idea that there are leaders who would even entertain such a plan..... 400 miles of new freeways? I can't imagine such a thing. Even if cars become so efficient or not reliant on fossil fuels in the future, the plan itself is expensive and awful for the surrounding envinronment. How do you maintain something like that if we can barely or not even maintain what we have now? Our infrastructure is crumbling, why make more? Someone want to provide the link? My apologies for the pessimism.

[Brandon716]

The national debt quite frankly isn't our problem. European nations have much higher debt ratios than us, our problem is raw real time job creation and quality of jobs that get created. The biggest problem during the boom periods we have recently went through is that the jobs created aren't as high paying and high quality as they should be.

How to create higher quality jobs is key to any economic rebound.

[ardecila]

This article very conspicuously overlooks the Western cities - which is weird, since the author is from Seattle. Cities like Portland, Seattle, and Denver were 30 years ago what Charlotte is now.

The author points out how cities that hit their stride before WWII vary from crumbling to gleaming, but that newer cities are deterministically doomed to be soulless places. Yet HIS OWN CITY hit its stride after WWII and is universally recognized as a cultural capital with a thriving economy. The same can be said for Portland, LA, or Denver.

What's with the jumping to conclusions? Americans still know how to build great, urbane cities like what the author wants. It's just that people in the South have other priorities besides coffeehouses and streetcar lines. Try as it may, Charlotte's culture revolves around NASCAR, not Mozart or Picasso. And even within the South, I'd argue that Atlanta is far more appealing and urbane than the author would like to admit - I'm a Chicagoan, and I get excited by the dynamism of Atlanta.

The author is also being rather impatient, throwing in the towel on Charlotte because its two biggest banks are the worse for wear. Either this will stimulate the city to diversify, or it will sink back into the third tier of American cities, as every other one-horse town has done (with the exception of DC, of course). The financial collapse is a challenge for Charlotte, not a defeat.

[urbanlife]

Originally Posted by Scottolini

I suppose Texas cities aren't considered "The South" by the author because both Houston and Dallas had light-rail before Charlotte. And Atlanta has MARTA, while Miami has Metrorail, which are heavy-rail, but have been around for years. I'm not bashing Charlotte, because for a city it's size it has done some impressive things. But too act like it was doing things that many other cities across the country, the South included, have been doing as well is just weird.

This has been discussed before, when someone refers to the south in the south east part of the country, they are referring to the south east and deep south, not Texas....Texas has earned its place like California, it is its own thing.

Originally Posted by ardecila

This article very conspicuously overlooks the Western cities - which is weird, since the author is from Seattle. Cities like Portland, Seattle, and Denver were 30 years ago what Charlotte is now.

The author points out how cities that hit their stride before WWII vary from crumbling to gleaming, but that newer cities are deterministically doomed to be soulless places. Yet HIS OWN CITY hit its stride after WWII and is universally recognized as a cultural capital with a thriving economy. The same can be said for Portland, LA, or Denver.

What's with the jumping to conclusions? Americans still know how to build great, urbane cities like what the author wants. It's just that people in the South have other priorities besides coffeehouses and streetcar lines. Try as it may, Charlotte's culture revolves around NASCAR, not Mozart or Picasso. And even within the South, I'd argue that Atlanta is far more appealing and urbane than the author would like to admit - I'm a Chicagoan, and I get excited by the dynamism of Atlanta.

The author is also being rather impatient, throwing in the towel on Charlotte because its two biggest banks are the worse for wear. Either this will stimulate the city to diversify, or it will sink back into the third tier of American cities, as every other one-horse town has done (with the exception of DC, of course). The financial collapse is a challenge for Charlotte, not a defeat.

Exactly, this really points out that this is just another opinion on what might happen in the future, and like his prediction with Obama, we all can easily be just as wrong with predictions....I personally was hoping for an 8-8 season for the Cleveland Browns...now I am not so sure about that.

Though I will say this article has brought up a very interesting topic. I fear that cities like Phoenix, that has established itself as a sprawling car focused region will one day suffer the same syndrome that Detroit has suffered during the collapse of the auto industry. While not trying to pick on Detroit or to marginalize what is going on in either city, I think it is important to look at the fact that the amount of fossil fuel that we have is declining and it is safe to say that it will continue to become more costly...thus making cities like Phoenix obsolete.

Though with the evolution of American cities, we have seen rapid growth and change happen to many of our cities over the past 300 years and only 100 years for west coast cities. And it is true that cities like Seattle and Portland and several California cities have only really begun hitting their stride within the past 30 years, it is safe to say the west coast still has a chance to have "great cities."

Like the rail industry that made or broke starting towns, those same towns that did not get highway access slowly died as well...which would leave one to believe that with high speed rail, any city that is not connected to that will be left behind in the future of this country...though those cities will probably not die like they have in the past because we are much more of a diverse country than we were then, but their growth will become stagnant without high speed rail.

As for Charlotte, they are feeling that sucker punch to the nuts that BofA gave to so many other cities when they took over their financial markets. How the city deals with this and how it works with BofA still needs to be seen...will Charlotte keep growing like it has been? No, the skyline that it has now will probably change very little for a long time to come...but that isnt a bad thing either, Seattle's skyline has barely grown in recent years, yet plenty of new construction has been going on in that city. If the city has been successful in building an attractive city, then the financial market will have little effect outside of massive construction, but if there is nothing Charlotte can offer outside of banking, then of course the city is doomed...but I highly doubt that to be the case.

[jtk1519]

Geez, that guys sounds like he's about to walk off a ledge. If history has taught us anything (and apparently it has not for Mr. Talton) it is that things change, times change but people and by extension, cities, adapt. North, East, South and West; Rust Belt, Sun Belt, etc. I still remember as a little kid staying with family in New York City, my uncle would go on about how NYC was dying, hemorrhaging people, etc. That seems so funny to think about now. This article will be equally funny 20 years from now.

[fleonzo]

Charlotte worries about BofA's future
A crucial question is what his departure means for the bank's powerful presence in Charlotte.
By Kirsten Valle and Jen Aronoff
kvalle@charlotteobserver.com jaronoff@charlotteobserver.com
Posted: Thursday, Oct. 01, 2009
In a city already smarting from the nation's banking troubles, Ken Lewis' departure as Bank of America CEO adds another layer of uncertainty to Charlotte's economic future.

In interviews Wednesday with a dozen government officials, business leaders and banking experts, many wondered whether the bank's next leader would share Lewis' commitment to Charlotte. Some even worried the city might lose the headquarters, though bank officials have insisted that no such move has been considered.

Countless businesses and charities rely on Bank of America, and Charlotte owes much of its growth and prosperity to its banks. The company said earlier this year it employs about 15,000 people in Charlotte, though it has gone through widespread layoffs.

"I hope whoever succeeds him ... makes the same commitment to the Charlotte region that Ken has had for years," said Ronnie Bryant, CEO of the business recruiting organization Charlotte Regional Partnership. "There's always the thought in the back of your mind that something could change."

The news caps a rough year for Charlotte, a city long known for its thriving financial-services sector - but reeling more recently from a global banking crisis that eroded the city's wealth and threatened its identity.

Former Wachovia CEO Ken Thompson was ousted in June 2008. A year ago this week, Wachovia crumbled, eventually falling into the arms of Wells Fargo. Later, with its Merrill Lynch purchase gone awry, Bank of America's stock price plunged to historic lows.

Charlotte's banks have been key to the city's growth. Finance and insurance-sector wages make up 20 percent of Mecklenburg's private-sector payroll, paying out a whopping $5.2 billion last year.

As the financial crisis struck, though, the banks slashed bonuses and cut jobs. Shareholders' wealth plummeted, and the ripple effect spread to businesses across the region whose bottom lines depend on the banks' health.

Lewis' departure, city leaders and experts say, adds to the uncertainty.

"They've certainly got a worldwide focus, so for their top leaders, there's less time for Charlotte, and I think that's understandable," said Tim Belk, CEO of department store chain Belk and the current chairman of the Charlotte Chamber. "But there's tremendous depth of management, and a lot of those managers have played key roles in the city. So ... I hope that will continue."

UNC Charlotte finance professor Tony Plath said the news of Lewis' Dec. 31 departure wasn't surprising - or promising.

"Ken has just been beleaguered on all fronts," he said. "We all knew it was coming; we were just waiting for the timing."

The bank's board is already discussing a succession plan, and depending on its pick, the bank's headquarters could move to New York, Plath said.

That's because the company's revenue center is already moving that way, and the geographical center could follow, he said. The bank's board is largely centered in Boston and New York - where the company opened a midtown skyscraper this year - and a New York headquarters would be more accessible for the bank's growing European operations, he said.

The board wouldn't make such a move quickly - it needs a year or two to learn the bank and complete its merger with Merrill Lynch, Plath said.

In an interview with the Observer this spring, Lewis discounted the possibility of moving its headquarters.

"As I've said before, we're still a scrappy Southern bank that plans to be in Charlotte for a long time," Lewis said at the time.

Asked if that might change under a different CEO, Lewis said he didn't think the board of directors would ever agree to such a move. Besides, he added, "we have a huge infrastructure here that you would just not want to see go to waste. Plus, it's a great place to live."

Others in town Wednesday said they hoped that would continue to be the case.

"I have to believe that decisions like where to locate people or the headquarters are much bigger than who the CEO is," said Peter Conway, managing partner with Trinity Partners, the company that handles leasing for Bank of America Plaza.

He said Bank of America occupies 13 buildings in the area, and will add another when its new 32-story office tower uptown is complete next year.

"The facts are that the bank leases (or will lease) over 7 million square feet of office space in Charlotte," Conway said. "... You wouldn't want to change that. I remain rightfully optimistic about the bank's presence in our city."

News of Lewis' resignation spread late Wednesday, as the bank made final preparations at its luxury Ritz-Carlton hotel uptown, which opens today.

Mecklenburg County commissioners Chairman Jennifer Roberts said there's always a concern when leadership changes at a major employer.

Still, "I think any leader at that institution is going to realize the solid fundamental climate in Charlotte is good, and a good place to do business, and a place that workers want to live and move to," she said.

City leaders say Lewis shouldn't be defined by the rocky end of his tenure.

Republican mayoral candidate John Lassiter said Lewis has helped build Charlotte's cultural community, and that he shouldn't be held responsible for an economic meltdown that has touched "every financial institution in the world."

Lassiter's rival, Democratic candidate Anthony Foxx, said Bank of America under Lewis' leadership has done better than most in managing its affairs through the banking crisis.

Whatever happens with the bank's headquarters, its outgoing CEO has left an important legacy - albeit a different one than his predecessor, Hugh McColl Jr., some say.

"As Hugh McColl's successor, he wasn't publicly out front, but believe me, he was a huge force in things such as the NASCAR Hall of Fame, charities, the arts, affordable housing," Charlotte Mayor Pat McCrory said. "He's done it under the radar screen without much credit, but he deserves some credit now."

When Lewis pledged to do something, he kept his word and followed through, McCrory said. His departure, McCrory said, wasn't entirely surprising - it was always a matter of when.

"I'll miss working with him, but I hope he stays active in our community," he said, "because he's a talent we'd still like to take advantage of."

Staff writers Christopher D. Kirkpatrick, Christina Rexrode and Kerry Hall Singe contributed.

Kirsten Valle: 704-358-5248

[CentralGrad258]

Does America really need to build any more great cities? How about re-building the cities we already have? I understand Americans like things shiny and new, but maybe it would be more efficient to invest in existing infrastructure and making existing places more liveable than always looking for the next boom town.

We had our boom from late 19th century to the 1960s, it can't go on forever. This is not necessarily a bad thing, it's just I think the constant focus on growth is misplaced. In my humble opinion, the focus should be on improving the quality of life of the people who live in our cities, towns, etc.... I know it's somewhat contrary to pure free market capitalism, but that's where I find myself right now.

[Brandon716]

^Its funny you mention rebuilding what we have. America has a strong history of building megacities at the blink of an eye historically speaking, then the habit is to get up and leave those new megacities the moment they start to shine. This culture of moving out and leaving things behind has been a huge pattern throughout the nation instead of maintaining and rebuilding. Any rebuilding is minimalist in the larger picture.

Speaking of Bank of America, it sounds like Charlotte may get to feel the pain of its older brothers like Buffalo. With the bank being as sick financially as it got and with the new leadership being shuffled around, its entirely possible some day it will be moving or merging with yet another bank. It does not sound like it will have a reason to stay in Charlotte if that happens given the circumstances as many of the people who built BoA were Charlotte boosters like the old CEO that wanted to see the bank there for personal reasons.

If BoA were to leave Charlotte, it would basically create a vacuum much like rust belt cities saw back in the day.

So the build and leave mentality continues...

[dimondpark]

Wow, if Charlotte leaves BofA-that will be a huge bummer for them.

[VivaLFuego]

Originally Posted by Brandon412

If BoA were to leave Charlotte, it would basically create a vacuum much like rust belt cities saw back in the day.

It would be a blow to Charlotte, but it's really quite different than the loss of industrial competitiveness of the rust belt. The comparable situation would be if the entire US securities industry up and moves to China/Mexico/lower-cost countries - and then Charlotte won't be the only one hurting.