SUNBELT UR VIGNETTES
To provide flavor and detail, several vignettes of Sunbelt UR are provided below. Each presents a variation in UR implementation throughout the Sunbelt in the Transition Era (actually, because of the Sunbelt UR time lag several extend into the early seventies). Several more well-known examples (San Francisco, Portland and Dallas, for example) are left out in favor of lesser-known examples. The implicit contrast with Boston and Philadelphia and hegemonic Big Cities underscores each as well—UR clearly exhibits regional as well as municipal variation. The first vignette, California/Sacramento, focuses on a major ED tool innovation that arose from California’s UR program: tax increment financing (TIF). It also demonstrates the state’s impact on sub-state UR programs, and shows that states are far from invulnerable to interstate competitive pressures.
The second vignette, Atlanta (the remarkable southern outlier), blazed its own path in confronting early decentralization, and its use of UR resembled northern Big City UR—except that Atlanta’s chamber-dominated ED policy system had more in common with Dallas and Houston than most would care to admit. Norfolk is a more typical southern UR example in that it shows how desegregation and UR became intertwined but still was tied to local elite’s perception of the competitive urban hierarchy. Oklahoma City is in a world of its own. Sharing a policy system common to the southwest, it embraced UR, and federal funds, like none other—making the case that the Oklahoma chamber was the most aggressive and powerful in America at that time. The final vignette, San Diego, San Antonio (the Texan outlier), serves as our link to UR and its Part III evolution in the Sunbelt. The interplay between annexation/UR, business reformers and the rise of ethnic neighborhoods is a dynamic that will be an important element of Part III.
California UR: The Sacramento Plan and Tax Increment Financing
Stripped down to its barest essentials, the federal UR program marked the first time “direct” federal dollars could potentially be available to municipalities (bypassing the state) for non-housing urban physical redevelopment. Federal grants, however, were never “free” money. Mandates, hidden costs, required planning departments and redevelopment agencies, compliance costs and a local “match”—which varied over time. When a city engaged in an UR project, it paid its share of match and expenditures (Foard and Fefferman, 1966). How to raise funds—from taxes, begging the state government or taxpayer bond referendum—was a major concern, the last being an important reason why UR projects stalled. That concern generated a legislative response in California which led to one of our history’s most significant economic development tools: tax increment financing (TIF).5 It came out of Sacramento’s attempt to compete with Albany and Nelson Rockefeller’s Empire State Plaza.
In 1945 California authorized the local creation of quasi-government redevelopment authorities (RDAs) “to eliminate blight through development, reconstruction and rehabilitation of residential, commercial, industrial and retail districts”. The 1945 definition of blight was broad, not restricted to housing-related development. After passage of the 1949 Housing Act, lots of cities wanted in on the money. How they could pay their match and expenditures, given voter reluctance to approve bond referenda, prompted the California legislature (1950) to assemble a team of seven experts to recommend financing alternatives for local match. The team, of which Lyle Stewart was an important member,6 devised TIF and prepared the necessary legislation. The first step was a state constitutional amendment, which was successfully approved in 1951, followed in 1952 by passage of the nation’s first TIF enabling legislation. The early approval by California and the approval of TIF were key to Californian cities’ early participation in the UR CBD projects.
California linked TIF to areas characterized by “urban blight,” but in its first years only a few communities established redevelopment project areas; most project areas were small—typically 10 acres. Sacramento, however, became the pioneer. In 1950 it commenced its urban renewal involvement by declaring 60 blocks of its downtown blighted. The city embraced TIF and used it throughout the fifties. TIF, as used by Sacramento, was labeled the Sacramento Plan, capturing headlines mostly because it was the critical element of Governor Pat Brown’s “I can build bigger than you” counterpoint to Rockefeller’s 1952 Empire Plaza.7
Initially TIF deprived schools and service districts of their property tax receipts and was perceived by many Californians as anti-education. So, in 1972 TIF was “reformed”, required to share receipts with schools and service districts. Again, in 1976, the state legislature required at least 20 percent of TIF revenue from redevelopment areas be set aside for low-mod affordable housing. None of these reforms slowed TIF down. By 1976 there were 226 districts, some exceeding 2000 acres; by 1977 TIF RDAs collected 2 percent of the state-wide property tax (O’Malley, 2012, p. 3).
TIF was slow to diffuse to other states. As of 1968 it had been adopted by only six other states (Minnesota, Nevada, Ohio, Oregon, Washington and Wyoming).8 After 1980, however, TIF spread rapidly, eventually approved in some form by 48 states. Something had happened—and that something was California’s Proposition 13.
Atlanta
In the 1930s Atlanta (270,000 residents, 32nd in the nation) entered the Age of Urban Renewal. In 1933 a major downtown property owner, Charles Palmer—hoping to create low-income housing for neighborhood residents adjacent to downtown—attracted business investors to form a “limited-dividend private corporation”. Acquiring New Deal PWA funds from NIRA, Palmer’s corporation constructed the nation’s first slum clearance/public housing project: Techwood Homes (for whites) and University Homes (for African-Americans), the former opening in 1935.
Whatever his private intentions, Palmer sold public housing to the community for reasons other than providing safe, quality housing for low-income disadvantaged residents. Palmer saw public housing as a means by which slums could be replaced and nearby property values protected. In 1938 Palmer was elected chairman of the chamber and, in the same year, successfully founded the Atlanta Housing Authority (AHA)— which was largely independent of city government. By 1940 six projects capturing $21 million in federal funds built 4000 public housing units (segregated) and, by 1956, 13 projects (not including Techwood) had been completed. At that point (1956) the AHA ceased building public housing projects, pledging instead to pursue urban redevelopment. By that time, however, the AHA was one of the largest housing authorities in America, so aggressively had it utilized NIRA, the Housing Act and war production housing. As for Palmer, in 1942 he was tapped by FDR to head the federal war production housing program.
Why Atlanta aggressively built public housing needs to be better explained. Atlanta’s political leadership followed a strong and consistent principle to delegate programs where possible to the private sector. Palmer’s AHA was essentially a private EDO. Atlanta’s network of privately led EDOs was held together by its corporate/business community through the chamber (Henson and King, 1982, p. 309). In 1941, for example, the chamber established an autonomous subsidiary, the downtown Central Atlanta Improvement Association (CAP),9 led by major property owners: “With CAP, the major players could launch long-term planning and engage in sustained action in support of a comprehensive program of redevelopment” on their initiative and expense (Stone, 1989, p. 16). CAP concentrated on street/parking improvements, railroad viaduct construction and lobbying for downtown infrastructure bond referenda. When the city council delegated management of the Planning Commission to the chamber (1945), Atlanta had effectively privatized planning/economic development. The city did not establish any government body or office to monitor economic development/ planning until 1957.
Mayor Hartsfield and privatized ED and decentralization
In 1937 William Hartsfield, Atlanta’s best-known mayor, was first elected. Hartsfield, no public houser, served until 1961. Through the 1930s Atlanta, through annexation, countered suburban expansion. During the Depression/war (Hartsfield’s first three terms), however, annexation practically ceased—only 3 square miles were annexed. Decentralization did not threaten political or business leaders until the late forties, when too many of Hartsfield’s middle-class electoral coalition left for the burbs, increasing Hartsfield’s dependence on African-Americans. He attempted four times to annex adjacent areas and failed each time. So Hartsfield and the chamber brought in Thomas Reed (National Municipal League), who recommended city–county consolidation—which also came to a dead-end.
Atlanta’s first postwar crisis was a 1946 business-led highway plan. The Lochner Plan generated intense public and private debate/negotiation within Hartsfield’s coalition. It proposed slum removal to build highways and linked it with affordable new housing—to be available for blacks and whites (in separate neighborhoods). Behind the scenes negotiating between Hartsfield, the business elite and black leadership became the backdrop for public policy-making in Atlanta (Stone, 1989).
A major development was the successful 1947 approval of the Metropolitan Planning Commission (MPC). The MPC was a product of chamber, Greater Atlanta Association, Central Atlanta Improvement Association and other business organizations. They convinced the state legislature to grant the MPC varying powers throughout DeKalb and Fulton counties. Beginning operation in 1950 with shared funding (Atlanta 55 percent, Fulton 37 percent and DeKalb 8 percent), the MPC produced land use, water, transportation and sanitation plans, and set routes for an Atlanta beltway and future expressway system. Later Cobb, Clayton and Gwinnett counties were added.
The chamber in 1949 formed a blue-ribbon “Local Government Commission” to fabricate a long-term solution to decentralization: massive annexation. By this point, suburban counties were resistant to encroachment by the central city. The report which emerged was dubbed “the Plan of Improvement”. Hartsfield and the League of Women Voters climbed on board. The Plan of Improvement attracted sufficient black support not only to win a referendum, but also to achieve two signification ratification victories in the Georgia legislature. The Plan of Improvement was a game-changer for Atlanta: it tripled the size of the city from 37 to 118 square miles and added an estimated 100,000 (most white middle class) to the population.
Hartsfield retired in 1961, replaced by the president of the Chamber of Commerce, Ivan Allen Jr., who defeated Lester Maddox. Allen had supported school desegregation and, in 1961, proposed “an ambitious agenda of redevelopment” for his future administration.10
Good ol’ boys and UR
Allen’s “Six Point Program”, developed in his capacity as chamber president, called for schools, freeways, urban renewal, an auditorium-coliseum, a stadium, rapid transit— and “Forward Atlanta” (which had been founded by Ivan Allen Sr.). Allen Jr. was part of an informal Vault, a close-knit collection of top corporate CEOs who hung out at the chamber. In effect, his election as mayor fused chamber with city hall—retaining, however, Atlanta’s now-traditional inclusion of African-American leaders in decision-making. Allen left no doubt, however, as expressed in his inaugural address, that:
the first rule of thumb for any of the things that must be done in Atlanta is this: that in any area private enterprise can, and will undertake a project, this must be done … Your city administration will enter the picture only when … private enterprise cannot undertake those services and provide those facilities that Atlanta must have. (Henson and King, 1982, p. 300)
The power behind the informal Vault proved sufficient to overcome the inadequacies of a weak-mayor form of government—especially so in that most funds for its initiatives were from private sources. Except for schools, it was all economic development. The purpose was not to dominate suburbs; but rather economic growth was intended to propel Atlanta into its rightful place in the national competitive urban hierarchy. Under Allen and his chamber allies Atlanta would make “the big push” that would place it as the regional capital of the New South, and a first-tier city in America’s hierarchy. UR played an important, but essentially supportive role, in this big push.
Believing that if Atlanta was to achieve national status it must recruit major league sports, Allen, on the flimsiest handshake with Charles Finley (owner of the Kansas City, later Oakland, Athletics baseball franchise), secured private financing from a major local bank and built a new stadium in just 51 weeks after groundbreaking “on spec” on UR-designated land adjacent to downtown and three highways. When the stadium opened in 1965, Finley was long gone (he didn’t sell the A’s until 1980), but after law suits cleared up the following year, the Milwaukee Braves moved in. Playing alongside the Braves was a new National Football League (NFL) expansion team, the Atlanta Falcons. Two years later the St. Louis basketball team, now the Atlanta Hawks, arrived in town. Whatever its controversy within our profession, Allen and Atlanta demonstrated how vital sports teams and stadia can be to a city competing for a place in the urban hierarchy.
During the sixties, Atlanta privately erected 34 buildings of 15 plus stories. The most grandiose project was the Peachtree Center complex patterned after the Rockefeller Center. Over the next two decades, Peachtree accumulated planner/architectural criticism, but it built the foundation for Atlanta’s future convention and tourist industry. The project anchored what has become a mainstay of Atlanta’s economy, and figured prominently in its 1996 Olympics. The major UR project demolished the huge Buttermilk Bottom residential area and constructed the Civic Center and Auditorium, the Georgia Power Headquarters and the Bedford Pine residential area (which remained largely empty until 1980). A second UR project doubled the size of the Georgia Tech campus and expanded its physical plant greatly. The building boom continued through the 1970s, resulting in a city of nearly 500,000 and a metro area exceeding 2.1 million. An estimated 80–90 percent of the construction financing originated from non-southern sources (Rice, 1983, p. 39). Urban renewal’s role was largely restricted to assembling/ clearing residential slums and transferring land to private elites who built with their own or somebody else’s money.
During Allen’s administration, Atlanta economically and demographically exploded. Without question a “suburbanization simultaneous with CBD revitalization” occurred in the sixties, and would continue into the seventies. Not without issues, central city and suburbs were not engaged in a socio-economic arms race. Working through the Metropolitan Planning Council, the two geographies evolved into a polycentric metropolitan area. The spectacular growth of the central city made this possible. Affluence and growth, apparently, permitted Atlanta to evolve into its present-day metropolis.
Ron W. Coan 