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Amid Scandal and Explosive Growth, Nashville Ponders Its Future

Like many other Sunbelt cities, Music City is trying to figure out what kind of place it wants to be.
by | July 2018

Earlier this year, Nashville’s Frist Art Museum suffered an embarrassing episode. The museum had just opened a new exhibit on ancient Rome, showcasing art and artifacts from the British Museum in London. But just six weeks in, the British Museum notified the Frist that it was pulling the exhibit. Seismographs put in place to protect the art had detected excessive vibrations. Museum staff in London worried that the shaking could damage the artworks on display. 

Curators at the Frist were stunned. Their museum is housed in an 84-year-old art deco building that formerly was the city’s main post office. It’s a substantial structure, all marble and granite, sitting on a foundation of solid limestone. But that wasn’t enough to shield Rome’s ancient artifacts from Nashville’s relentless growth. Across the street, developers had started work on a 4 million-square-foot, mixed-use development modeled on LA LIVE in downtown Los Angeles. The sensors had picked up vibrations from blasting for a new hotel at the site. So the antiquities went back to London, and the construction went on.    

Nashville is booming. Some 5,000 hotel rooms are currently under construction, with new high-rise hotels by Marriott and Westin soaring over the 2.1 million-square-foot, guitar-shaped Music City Convention Center downtown. Visitors to the city have swelled from 2 million a year in 1998 to more than 14 million today. On weekends, pedal taverns clog the streets of downtown while bachelorette parties crowd the honky-tonks of Lower Broadway, where free music plays 24/7. Not long ago, the city’s Department of Public Works commissioned a study to measure the foot traffic along Lower Broadway and on First Avenue on a typical Thursday and Saturday. Planners were shocked to discover that the number of pedestrians using those streets was comparable to foot traffic in Times Square. 

People aren’t just visiting. Every day, roughly 100 people move to the region. Whole new neighborhoods have risen to accommodate the growth, most notably The Gulch, a lively high-rise district near downtown that, not too long ago, was nothing but an open rail yard. East Nashville has emerged as a kind of Brooklyn South, a mix of farm-to-table restaurants, backyard recording studios and historic bungalows. To the west of downtown, Germantown is growing into one of the city’s densest neighborhoods, with a mixture of restaurants, corner stores, restored brick Victorians and new low-rise apartment buildings. In the process, Nashville has become something it never was before -- hip. Affluent Nashvillians once flew to New Orleans for fine food. Now Nashville chefs regularly appear as James Beard Award nominees, and trendy eateries in New York feature such Nashville specialties as “hot chicken.” On screen, the hillbillies of older shows such as “Hee Haw” have given way to the heartthrobs of “Nashville,” the musical network drama that premiered in 2012 and ran for six seasons. Nashville’s hockey team, the Predators, is an NHL powerhouse, with home games that effortlessly blend country music glamor with on-the-ice excitement.   

Nashville’s recent rise is not accidental. It reflects a concerted quarter-century effort by mayors to encourage investment in the city center -- and a half-century-old bet on what at the time was a unique, strong mayor form of government, one of the nation’s first consolidated city-county governments. “I’ve visited a lot of other cities,” says Criminal Court Clerk Howard Gentry, the city’s most prominent African-American politician. “Everybody envies the fact that we [as a typical county-level entity] can go sit down with the mayor and police or fire chief and the school superintendent; we can have a meeting and everyone is around the table so we make a decision for the city without having to deal with other jurisdictions.”  

 For decades, the system has worked well. “Nashville,” says Steve Cavendish, the former longtime editor of the local alt-weekly the Nashville Scene and an astute observer of local politics, “has kind of been blessed with good managers. Almost all of them have been these slightly progressive, good government sorts of leaders who have gotten business buy-in for what they wanted to do.” And what they wanted to do was create a vibrant, growing city that welcomed visitors and residents from around the country and the world -- Nashville has the largest population of Kurds in the United States -- while also avoiding the sprawl and traffic of Atlanta.  

When Megan Barry was elected mayor in 2015, she seemed to be yet another leader in the familiar Nashville mold. Barry, a former corporate ethics officer and at-large city council member, was a proud progressive -- more progressive than anyone who had come before her, perhaps—but she’d also worked hard to be business-friendly. Where her predecessor as mayor, Karl Dean, had been reserved and businesslike, Barry was expressive and charismatic. The Dean administration had frequently benchmarked Nashville against other “peer” cities such as Austin. Under Barry, some progressives began to imagine a new Nashville that resembled Minneapolis or Seattle. Those cities, says Jennifer Carlat, vice president of metropolitan policy at the Nashville Chamber of Commerce, “have understood what growth is coming and have tried to guide it to specific locations supported by infrastructure and transit.” By 2030, Nashville will have roughly the population Seattle does today. Why, then, shouldn’t it resemble Seattle in other ways?  

Barry rallied the city council and Nashville’s business establishment around the idea of raising the already high sales tax to fund a $5 billion transit plan that would expand bus service and build light rail. With a 70 percent approval rating and a national reputation as an emerging Democratic star, Barry seemed well positioned to make the argument for transit. 

Instead, earlier this year, it all fell apart. In January, reports appeared that Barry had been having an affair with the head of her security detail and improperly using city funds. In March, she resigned after negotiating a plea deal with the local district attorney. As Barry was stepping down, problems began to appear on Nashville’s balance sheet. Revenues fell short, and the city was increasingly unable to meet its needs. Two months later, voters roundly rejected the $5 billion transit plan.  

 


Mayor Megan Barry resigned from office after pleading guilty to stealing thousands of dollars from the city while carrying on an extramarital affair with her bodyguard. (AP)

 

Meanwhile, Nashville’s needs are becoming urgent. Violent crime rates remain stubbornly high. Housing affordability has become a major problem. Debt payments are consuming an ever larger part of the city’s budget, and transit is still an unmet challenge. Addressing these needs will require money. Yet despite a boom that is everywhere evident, Nashville’s government is facing a $34 million budget shortfall and dwindling reserves.   

All of this raises some very big questions about where the city is and where it’s going. How, in the middle of unprecedented growth, did Nashville’s government run short of funds? If Nashville isn’t willing to raise taxes to build a transit system like Seattle, then how can it hope to harness growth in the way those cities have?  

The challenge of answering these questions has fallen to the new mayor, David Briley, who took over the position when Barry stepped down. He is an accidental leader, but someone with deep roots in Nashville politics: His grandfather, Mayor Beverly Briley, presided over the merger of city and county governments in 1963 that laid the groundwork for strong regional leadership to emerge. Can Briley help Nashville figure out what kind of city it wants to be? Or will the problems he’s inherited derail Nashville’s unique mix of progressive growth?  

"We've had mayors with bubbly personalities, and we've had mayors with hardly any personalities," says Court Clerk Howard Gentry. "David [Briley] is just the steady hand."

It’s important to put Nashville’s growth in perspective. First, it’s not just the city of Nashville, population 680,000, that’s growing. It’s the entire 14-county region, population 1.9 million. Those 100 people moving to Nashville every day? Only about 15 of them are going to the city proper. The rest are moving into surrounding jurisdictions, some of which have invested in excellent public schools and developed commercial hubs that rival downtown Nashville itself. The city currently has 1.5 million square feet of class A office space under construction. Next-door Williamson County, which is home to Nissan’s North American operations, has 7 million square feet planned or being built. In short, growth of the region remains primarily a story of suburban growth, a trend the regional Metropolitan Planning Organization expects to continue. Between 2015 and 2025, the organization predicts that Nashville will add 50,000 residents. During this same period, it estimates that Williamson County will add 80,000 people; and exurban Rutherford County, another 65,000 residents. 

Nashville itself grew by harnessing the post-World War II surge in suburban growth. In 1963, it became one of the first cities in the United States to completely merge city and county governments, creating a new municipal government, known locally as Metro. Prior to consolidation, Nashville was a compact city with a significant minority population surrounded by fast-growing, predominantly white suburbs. Some observers believed the city would eventually become a majority black city, much as Atlanta, Birmingham, Ala., and Jackson, Miss., had. Consolidation ensured that white suburbs did not compete with a black central city. Former county chief executive Beverly Briley became Metro’s first mayor, a position he held for 12 years. 

Briley looked to suburban parts of Metro for growth. The city’s downtown started emptying out in the 1960s; even the Grand Ole Opry radio variety show, which in the 1930s had become the nucleus of the country music industry, decamped from its longtime Ryman Auditorium location downtown to a more suburban part of the county. In the city center, poverty and crime rates remained high. Most of downtown was given over to adult bookstores and “massage parlors.” A few stalwart honky-tonks remained, like Tootsies Orchid Lounge, where singer Willie Nelson was discovered. But for the most part, says Butch Spyridon, the longtime head of the Convention and Visitors Corporation, downtown Nashville “was not for the faint of heart.” 

Things generally continued that way for the next two decades, with the center city languishing while the suburbs kept growing. That all began to change in 1991, however, when the city elected the first in what would turn out to be a trio of transformational mayors. 

Phil Bredesen was a Harvard-educated physics major who grew up outside of Rochester, N.Y. He’d moved to Nashville in the mid 1970s, after his wife, a nurse, got a job with the Hospital Corporation of America, which today is the world’s largest private hospital company. Bredesen himself soon made a fortune in health care, which he used to run for political office. His first campaign for mayor faltered after his rival accused him of being “a Yankee.” After the previous mayor’s tenure ended in controversy, voters took another look at Bredesen. In 1991, he handily won election. 

Bredesen immediately focused on downtown. He leapt at an opportunity to bring the Houston Oilers to Nashville—and rename them the Tennessee Titans -- and he oversaw the construction of a new football stadium just across the Cumberland River. He also focused on making downtown the cultural core of the region, championing an elegant new main public library in the heart of downtown, as well as the Country Music Hall of Fame and the Frist Art Museum. However, his most important initiative was the push to bring a sports and concert arena to lower Broadway. The arena opened in 1996 and soon attracted an NHL expansion hockey team, the Predators. A major test of this new strategy quickly followed. In 1997, Gaylord Entertainment abruptly announced that it was shutting down the main engine of Nashville’s tourist economy, the Opryland theme park. By default, downtown Nashville became the city’s new tourist attraction. It also became a challenge for Bredesen’s successor, former state Majority Leader Bill Purcell. 

Bredesen had focused much of his energy on jump-starting development downtown. Purcell took office on the promise of focusing more on neighborhoods and on improving education, safety and quality-of-life issues. He saw downtown as a neighborhood. Purcell thought that the government had spent 40 years trying to address downtown’s problems by removing people from it. He wanted to do the opposite -- shut down the massage parlors, improve public safety, create mixed-income housing in and near the core, and bring residents back. For help with this task, Purcell turned to the city’s law director, Karl Dean. Dean and his office cracked down on illicit businesses and activities in the area.  

Purcell also wanted to rezone downtown for mixed-use developments. He recruited a planning director from Orlando, Rick Bernhardt, a New Urbanist who overhauled the zoning code for downtown and encouraged dense development in the city’s first new close-in neighborhoods, including The Gulch. Together with local preservationists, Bernhardt also put a break on plans, drawn up by the city’s department of public works and the state department of transportation prior to his arrival, that would have put a six-lane interstate connector through the heart of downtown. Bernhardt eventually whittled it down to a four-lane surface street that he insisted must have sidewalks, a decision that effectively extended the city’s grid to the east. Purcell also supported a private philanthropic effort, led by another local billionaire family, that of Martha Ingram, to build a $120 million symphony concert venue downtown, just a few blocks away from the honky-tonks that were starting to spring up on Lower Broadway. 

 


Downtown Nashville's honky-tonk bars have become a major tourist draw. A recent survey found weekend foot traffic is on par with Times Square's. (Shutterstock)

 

When Dean succeeded Purcell as mayor in 2007, those sidewalks became useful. (Dean was a Massachusetts native, continuing Nashville’s tradition of turning to outsiders for leadership.) Dean greenlighted the most expensive project in the city’s history, a $600 million convention center. Building during the Great Recession kept the cost lower than it would have otherwise been and moderated the recession’s impact on Nashville. Dean also worked with local businesses to turn Lower Broadway into a full-fledged tourist destination. These efforts laid the foundation for the boom that followed. “That investment in a new convention center provided a level of confidence that caused developers to reconsider downtown Nashville as a priority,” says Tom Turner, who heads the Nashville Downtown Partnership. “That confidence led to a resurgence in downtown investment that continues to this day.”

As the national economy recovered from the recession, the city’s growth kicked into high gear. Nashville became cool. Tourists and new residents began pouring in. Bachelorette parties began showing up. (No one is quite sure how Nashville became one of America’s biggest destinations for bachelorette parties over the past decade. Spyridon, the convention corporation head, says bridal parties come “because we are authentically American and unique” -- and nice. Austin, he quips, “can stay weird.”) At any rate, sustained investment in downtown over the tenure of three unusually effective mayors, plus a dose of zeitgeist luck, had turned downtown Nashville into a growth machine.

 


Whole new neighborhoods have sprung up as the city has grown, including The Gulch, a high-rise district on the site of a former rail yard. (iStock)

 

As in other urban areas, Nashville’s breakneck growth didn’t guarantee that everyone would share in the city’s economic boom. Sure, it currently has the lowest unemployment of any U.S. metro area with more than a million residents. And according to the Brookings Institution, between 2006 and 2016, Nashville ranked seventh nationwide in the number of overall jobs created. But on other, more nuanced measures, the picture isn’t as rosy. Take Brookings’ measure of prosperity, which divides gross municipal product by the total number of jobs, creating a crude measure of overall productivity. Nashville ranked near 16th in the nation through about 2016. Since then, its level of prosperity has fallen to 73rd place, as annual wage growth has stalled. Or take another measure: Stanford University economist Raj Chetty has proposed “intergenerational mobility” -- namely, what percentage of kids born into the bottom 20 percent of the income distribution make it to the top 20 percent -- as a potential indicator of success. Like all Southern cities, Nashville does a poor job promoting intergenerational mobility. Only 12 percent of counties in the U.S. see a lower percentage of poor children move up the income scale. 

These and other cracks in the veneer of Nashville’s growth had started to become more and more visible by 2015, when Barry was sworn into office as Metro Nashville’s seventh mayor -- and its first female leader -- in September. Relatable and articulate, she seemed the perfect face for the new Nashville. However, she also inherited real problems. The city had a large and seemingly intractable homeless problem. Violent crime rates were rising, particularly among young people. Rents were rising at more than twice the rate of wage growth. Housing advocates estimated that the city needed to develop or preserve 30,000 affordable housing units over the next decade. Nashville’s public hospital was bleeding funds.  

Solving these problems required money. But the city’s budget wasn’t growing fast enough to meet its needs. Part of the problem is a quirk of Tennessee state budget law: Legislation requires that the city’s property reassessments, which must occur at least every four years, must be revenue neutral. When assessments rise, property tax rates must fall accordingly. That means Nashville’s red-hot real estate market doesn’t translate into a huge boost in municipal revenues. Properties in Nashville were reassessed in 2017. Assessments shot up by a record median 37 percent, so, accordingly, the property tax rate fell to its lowest level in Metro history. The only way for a mayor to raise real new revenues was to pass a property tax increase, something Barry didn’t want to do. 

Another quirk: Nashville property owners can appeal their property tax assessment. And following the record 2017 reappraisals, a huge number of them did -- 55 percent -- more than the number of appeals after the previous reassessments in 2013. The reductions blew a $25 million hole in the budget going into 2018.     

The most talked-about problem in the city, though, was traffic. For most of the auto-era, Nashville was a city where you could drive everywhere in 15 minutes. As the region grew, that ceased to be the case. Commutes were getting longer. Yet the city’s bus system was anemic, and even walking places could be hard. Only a third of the city streets had sidewalks. 

To address this, Barry unveiled a sweeping $5.4 billion transit plan in November 2017. Her “Let’s Move Nashville” proposal was monumentally ambitious, with 26 miles of light rail on four different lines, new bus rapid transit service, bike lanes, sidewalks and a massive transit center tunnel beneath downtown. To fund it, she proposed a sales tax hike and an increase in taxes on hotel stays, rental cars and businesses. The controversial plan was never going to be an easy sell to residents, who were set to vote on it in May. But Barry planned to stake her political capital on it. And with a 70 percent-plus approval rating, there was reason to think she could be successful. 

But then her administration fell into chaos. In January, Barry admitted to the affair with her security officer. Questions soon emerged about whether taxpayers had been billed inappropriately or even illegally for travel and overtime expenses. In March, as part of an agreement with the district attorney, Barry agreed to resign and plead guilty to one count of felony theft; she reimbursed the city for $11,000 and agreed to three years of probation. 

Barry’s resignation set the city reeling. After 25 years of scandal-free mayoral stewardship, her resignation left Nashville leaderless before the most important local referendum in more than a decade. In a city that depends on strong leadership, that was a problem. 

“It took us 20 years to get to a vote on transit,” says Court Clerk Gentry, who endorsed Barry for mayor and supported the transit referendum. “Changing leadership in the midst of it affected us.” Barry was the face of the pro-transit campaign. Backers expected her to lead the effort in rallying support. Instead, says Gentry, the charges against Barry created “a question about public trust.” Subsequent events heightened public suspicions. Problems appeared in the city’s balance sheet as Barry was departing. In addition to the $25 million gap from the property assessment appeals, Metro had dipped into reserves to fund modest initiatives such as expanding sidewalk construction and putting $10 million into an affordable housing fund. It also fell to Briley, the new mayor, to sell the divisive transit vote less than two months after he took office. He tried gamely, but with yard signs across the city declaring “No Tax 4 Trax,” it was an uphill battle. Voters rejected the plan by a resounding 2-to-1 margin.  

 


In his first State of the City address, Mayor David Briley introduced austerity measures to tackle Nashville's budget issues. (AP)

 

Briley’s tenure has gotten off to a tepid start. At his first State of the City address, the soft-spoken mayor began by quoting his grandfather Beverly Briley on the need to act today for the sake of tomorrow. He then proceeded to present an austerity budget. “The budget that I presented to the Metro council earlier this week was not the budget I would have presented to the city in an ideal world,” Briley declared. “But it’s my job, and it’s this government’s job, to manage the circumstances that we’ve been dealt.”  

Nowhere was there any acknowledgement that the cuts were necessitated by Barry’s decision to forego raising property tax rates the previous year. Instead, Briley announced that he was rolling back cost-of-living pay increases for city employees that his predecessor had promised. He gave brief remarks about expanding pre-K programming. There was polite applause from the audience. After the speech, Director of Schools Shawn Joseph issued a statement that criticized Metro for cutting funding for education by $14 million. (The mayor’s office disputes that characterization.) It was, in short, a shaky showing. 

Nashvillians don’t insist on charismatic mayors. “We’ve had mayors with bubbly personalities, and we’ve had mayors with hardly any personalities,” says Gentry. “David [Briley] is just the steady hand.” But to some close observers, he’s been a curiously passive figure. That’s been particularly true on the subject of his first budget. Budgets are the means by which Nashville mayors exercise authority. Yet Briley has treated his first budget as if it was something he was forced to agree to, not something that he shaped. 

Briley himself insists that fiscal discipline is necessary but rejects the idea that Nashville faces a fiscal crisis. “It’s not a crisis by any means,” he says of the $34 million shortfall. “It’s not going to categorically change the way we provide services.” In a sense, that’s true. Nashville’s overall budget of $2.2 billion is significantly larger than the budget was just a few years ago. But it’s also the case that by not raising property tax rates, the city is limited in its ability to address important needs for tomorrow. Briley acknowledges that if the city had voted to keep the old property tax rate in place, “we would have somewhere close to half a billion dollars in new revenue this year.” A fiscally conservative mayor could have used those funds to replenish reserves and invest in water and sewer upgrades or jump-start transit improvements. A liberal mayor could have used those funds to spur the development of affordable housing. 

Just two months after he took over as mayor, Briley faced the public in a special election called to fill the remainder of Barry’s first term. He entered the race with a huge leg up -- a familiar name and a sizable financial advantage that came from the nearly unanimous support of downtown businesses interests. Yet as the election approached, local Democrats worried about an apparent surge from a controversial Republican, Carol Swain, a former Vanderbilt University professor known for her appearances on Fox News and her criticisms of Islam. She knocked Briley as an ineffectual leader. As Swain signs sprouted around Nashville and Tea Party notables rallied to her side, Democratic politicians worried that Swain, an African-American woman, could win some Democrats to her side and force a run-off election. In the end, she didn’t. Briley won with a comfortable 55 percent of the vote. Swain came in second, with 23 percent.  

All of this brings uncertainty to what the future holds for Music City. With a transit plan off the table for now, and with Briley’s scaled-back budget setting the tone, the city seems to be retreating, at least temporarily, from sweeping changes and large-scale projects. “Nashville,” says Spyridon, the convention corporation director, “has never been afraid to do big things.” But at this particular moment, for the first time in recent history, it is.

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