What's Your Story Idea August 14, 2009, 6:04PM EST

Chattanooga Reinvents Its Downtown

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The idea for "Chattanooga Reinvents Its Downtown" came from BusinessWeek reader RJ Burns Jr., an artist in Jacksonville, Fla.

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Still, the renewal of Chattanooga's downtown is hardly a cure-all. The area still sports sections of desolation, and crime remains a problem. July's unemployment rate was 9.5%, above the 9.4% national average. However, people are moving downtown, one of the core goals of renewal efforts in older industrial cities, and a direct result of creating the new urban dynamic.

from litter to leisure

Twenty years after graduating from college in the 1980s, Kim White moved back to Chattanooga because she was "in awe of what was going on downtown." When she left, University of Tennessee-Chattanooga students often commuted home because there was no entertainment, even a movie theater, downtown. The area simply rolled up each workday at 5 p.m. The waterfront consisted of blighted buildings and empty lots. U.S. Senator Bob Corker (R-TN), who was mayor from 2001-2005, describes the once unused waterfront as "hot asphalt with litter blowing across it."

Much of the redevelopment is overseen by RiverCity Co., a private not-for-profit corporation where White is CEO. The company's roots can be traced back to 1986 when Chattanooga began its aggressive project to reprocess land once occupied by factories, warehouses, and industrial plants. In place of the vacant former production facilities, Chattanooga sought to redefine its downtown based on recreation, leisure, and consumption. Burt Woolf, a consultant who works with industrial cities on community teamwork, was impressed that the leadership was "willing to drop old beliefs that have been taken for granted and look at the new options." Chattanooga made the Tennessee Aquarium, which was at the time the world's largest fresh-water aquarium, its anchor. The aquarium draws one million visitors yearly, and to multiply the effect of such patronage, developers and the city agreed not to build a restaurant inside, instead sending patrons back into downtown on an empty stomach.

At the time, the vision of the city and nonprofit groups outpaced private developers. "What are you building a fish tank for?" was a common line, says Dave Unruh, project manager for RiverCity. Unruh estimates that for every $1 spent on recreational space and art, the private sector doles out $13 for new development. For example, the city undertook a $9 million brownfield remediation of land occupied by a 110,000 square-foot Roper enameling plant. General Electric (GE), Roper's parent company, closed the plant in 2002 and relocated out of state. In its place, Chattanooga built the 22-acre Renaissance Park. Developers have incubated the park with an LEED-certified shopping center, condos, retail stores, and restaurants to the tune of $110 million. Unruh says, "We aren't quite at the magic 13, but we'll be there pretty soon."

Scott McLain, a Huntsville (Ala.) commercial real estate developer, saw Chattanooga's skills firsthand ten years ago. McClain was considering building a Ruby Tuesday's (RT) restaurant and visited RiverCity in what he expected to be the first of many stops tracking down demographic information, city ordinances, tourism numbers, and figures. Instead, "What typically takes a couple of days took a couple of hours," he said. "They flopped down everything I needed in one stop."

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Spielberg is a reporter for BusinessWeek.