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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

June 24, 2011 at 10:15 AM

Charlotte and Seattle, tales of two cities

Some 100 business and civic leaders from Charlotte, host of the 2012 Democratic National Convention, have been in Seattle this week as part of the Charlotte Chamber’s annual inter-city visit. The chamber there has been doing these gigs for more than 50 years to learn best practices from other cities. According to the Charlotte Business Journal, “Potential areas of interest for the Charlotte contingent include Seattle’s renowned library system (a particularly relevant topic, given the recent struggles here), signature downtown projects (the historic Pioneer Square District and the Pike Place Market), economic development, transportation and the arts.”

I was business editor and columnist at the Charlotte Observer for nearly five years, ending in 2000. When I got there, it seemed like Hooterville with a couple of giant skyscrapers. By the time I left, it was the nation’s second largest banking center with a gleaming, Oz-like skyline. It has been battered by the Great Recession, losing one of its two precious money center banks. Fiscal troubles have ravaged its schools and library system. Still, it can claim the only modern light-rail system in the South and an amazing amount of affluence thanks to being home to Bank of America and Duke Energy.

Two cities could not be more different. Although Charlotte is more populous (731,524 vs. 608,660), Seattle seems like the bigger city, partly because Seattle is denser and Charlotte is sprawled out and car-dependent. So lessons for Charlotte? Continuous reinvention and economic diversity (don’t be dependent on the banks), stewardship and non-profit strength, seek global business and love your downtown. The Queen City, as Charlotte styles itself (ironic, given our former monicker), is not going to get Bill Gates or Bill Boeing or world-class software, bio-tech and world health clusters. It won’t get a port. The suburban University of North Carolina at Charlotte is no UW.

Charlotte’s success comes from banks in an era when finance is king and queen. The city’s two banking giants of the 1990s, Hugh McColl Jr. at NationsBank (BofA) and Ed Crutchfield at First Union (Wachovia) competed to build the biggest national banks, aggressively lobbying for deregulation of the industry. Interestingly, McColl never trusted the investment banking side of the business. Crutchfield carried a grudge against Wall Street, often saying in his I-talk-slow-but-don’t-think-slow drawl, “We were decapitalized in 1865.” The South has risen (even though Charlotte works very hard to be the least Southern-feeling city in the South).

Sadly, Charlotte tore down so many vintage buildings and lost its downtown retail to malls, struggling to reclaim it. It demolished its lovely old train station, while Seattle is returning King Street Station to its glory. Still, downtown Charlotte is the best example of new city building in America and almost entirely McColl’s creation. Although from small-town South Carolina (like Ben Bernanke), McColl traveled the world and became a fervent urbanist. He led the preservation of the charming Fourth Ward downtown residential neighborhood, the revival of First Ward, the bank’s massive back-office operations in an urban, mixed use development and many other projects. When I asked him at retirement if he worried about a successor moving BofA to New York, he said, “It’s going to be hard to move half-a-dozen skyscrapers.”

Links from the Week:

  • The huge build-up of cash in corporate America isn’t resulting in capital investment or much hiring. One thing that is happening: Stock buybacks.
  • Is the outrage against the NLRB in the Boeing dispute being misdirected? One writer says yes, laying out the case against the company.
  • Take it for what it’s worth, but both Microsoft and Boeing make this list of American companies losing out to foreign rivals.
  • Is there really a deal for Greece? We shall see. In the meantime, privatization is no cure-all.
  • Bellevue-based Coinstar gets a rousing boost from this writer on the blog Seeking Alpha.
  • What’s an “expansionary fiscal contraction?” MIT’s Simon Johnson explains and it’s scary.

Have a great weekend!

Today’s Econ Haiku:

Midnight in Paris

Thinking, better get a new

Seven-three-seven

Comments | More in Aerospace/Boeing, Deficit, Downtown and urban issues, Eurozone, Federal debt/deficit, Labor unions, Microsoft, Urban issues

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