What can Virginia learn from Nashville (Part 2)?

Update. In the first installment of this two installment post I described the metropolitan juggernaut that is modern day Nashville. I also provided some historical perspective on how Nashville became the sixth fastest growing US city (measured along several axes) between 2011 and 2016. As a side note, the 35 fastest growing cities documented in the prior link included no cities in Virginia. I have family in Nashville. For three of the last four years I have visited my family, run in a wildly popular race and witnessed the remarkable growth of Music City. My 2019 trip is complete and this article is the promised update.

First, a step back. Admiring the rapid growth of Nashville requires a fundamental belief. One has to believe that rapid growth in urban areas is a good thing. This is not a universally held belief, in Virginia or in Tennessee. Thomas Jefferson, for example, was quoted as saying, “When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.” While I understand the bucolic allure of country living I believe that the economic future of the United States and Virginia will largely be in the cities. I think Virginia should be striving to create an environment conducive to fast growing, safe, livable cities. To that end much can be learned from Nashville as well as Charlotte, Austin, Raleigh, etc.

Observations. The weekend I spent in Nashville was not only the weekend of the Rock N Roll road races it was also the weekend that the NFL held its annual draft in Nashville. The NFL Draft in Nashville broke the attendance record for NFL drafts with an estimated 600,000 attendees over the three day event.  I was told that 150,000 people from outside Nashville came to town that weekend. Given Nashville’s population of just under 700,000 people, that’s quite an influx. Chaos could have been expected. There was no chaos. I went to Broadway (the “touristy” area of Nashville) where the NFL Draft was being held (outside). The streets were packed but not only order but civility reigned supreme. My first observation is that Nashville knows how to throw a public party. For example, the prohibition against drinking was waived for a section of the Broadway streets. Bourbon Street style. That alleviated what would have been unbearable crowding inside the bars and “honkey tonks” in the area.

The Rock and Roll Marathon (26.2 miles) and Half Marathon (13.1 miles) drew 20,000 runners. Actually, 19,999 runners and one three-toed sloth from Virginia. In any regard, the race course was well planned and obviously designed to show off the many interesting neighborhoods in Nashville. The run through Music Row was, as always, fascinating. Heeding the lessons from the Boston Marathon, law enforcement was everywhere. My second observation is that Nashville knows how to make people feel safe – even in a crowd.

Focus. Nashville doesn’t try to be everything to everyone. The city has focus areas. Healthcare is a focus area. That industry employs more than a quarter of a million locals out of a city population of 700,000. HCA, Community Health Systems, LifePoint Health, Brookdale Senior Living and AMSurg Corp are all based in Nashville. Nashville figured out that building and then adding to an existing industry cluster is easier than trying to manage a hodge-podge of unrelated industries. Country music is a staple of Nashville and every recording studio you run by along the race route had yard signs advertising their particular artists. Taylor Swift was seen wandering through the NFL Draft crowds without any apparent personal security. Nashville was not the birthplace of country music. Bristol, Virginia/Tennessee owns that honor. Virginia somehow squandered that opportunity.

Nashville is the bachelorette party capital of the world. Self-propelled pedal bars ply the streets of Nashville with screaming brides to be and their entourages quaffing beer and singing the latest country songs. I was told that each member of a bachelorette party spends, on average, $1,000 while celebrating in Nashville.

Execution. Nashville doesn’t only have superb business development focus it has superb execution. That execution includes risky private-public partnerships that are generally held in low esteem in Virginia. Nashville lured the Houston Oilers to Tennessee by agreeing to partly fund the construction of Nissan Stadium on the east bank of the Cumberland River. The deal required voter approval and passed with 59% of the votes cast. A one-time NHL expansion team, the Nashville Predators, play at Bridgestone Arena in downtown Nashville. Bridgestone Arena is owned by the Sports Authority of Nashville and Davidson County. On Spring nights when the Predators are in the playoffs but playing “away” the outdoor grounds of Bridgestone Arena are set up with huge TVs, seats and portable taverns to allow fans to watch their team.

Commentary – Lessons for Virginia. Nashville’s success is no accident. From the cultivation of a health care cluster to establishment of a safe, fun city for tourists to public-private entertainment partnerships, Nashville’s rise has been more engineered than random. A crucial starting point was the city-county merger back in the 1960s. Virginia’s undersized cities sit in legally structured isolation from the surrounding counties. Area-wide cooperation is somewhere between limited and non-existent. Simple variances such as allowing open containers of alcohol during certain times and in certain places seem very rare. Small live music venues are few and far between. Rather than allowing local voters to decide whether to use local money for sports stadium funding our General Assembly considers a law banning any such funding (it failed in committee). In other words, many of the attributes which draw young people to places like Nashville are missing in Virginia’s cities.

In Tennessee Dillon’s Rule applies only to non-home rule municipalities. The Tennessee Constitution states, “Any municipality may by ordinance submit to its qualified voters in a general or special election the question: ‘Shall this municipality adopt home rule?’ In the event of an affirmative vote by a majority of the qualified voters voting thereon, and until the repeal thereof by the same procedure, such municipality shall be a home rule municipality, and the General Assembly shall act with respect to such home rule municipality only by laws which are general in terms and effect.”

So long as Virginia is run by the Politburo in Richmond I think that the odds of developing an economic growth engine (absent a river of money flowing from the feds) is unlikely at best.

— Don Rippert

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22 responses to “What can Virginia learn from Nashville (Part 2)?

  1. Many interesting observations, any one of which could stimulate a great discussion. A couple of items jump out.

    — How did Nashville become the “bachelorette capital of the world?” I sincerely doubt that such a distinction was dreamed up by local planners or politicians. From a public policy perspective, it just “happened,” probably the result of entrepreneurs taking advantage of local assets. It’s not something that could have been foreseen or planned. Chalk it up to animal spirits in a region that values free markets and is hospitable to business.

    — How did the health care cluster get started? The presence of Vanderbilt undoubtedly was helpful. But there probably was some serendipity involved. If you look at the evolution of the health-care cluster, it probably started with HCA. Sometimes a community gets “lucky” when an entrepreneur happens to build a world-class enterprise big enough to support an innovation ecosystem — as with Microsoft in Seattle (followed by Amazon). Lucky in the sense that politicians and planners did not foresee or contribute to the firm’s success.

    — Low taxes. You didn’t discuss it, but I don’t think you can omit the fact that Tennessee has no personal income taxes. Entrepreneurs keep more of their money — and reinvest it. Entrepreneurs stay in Tennessee rather than move to Texas. Surely that low taxes figures into Nashville’s success.

    • Bachelorette capital – they are rumored to have seen a problem with the former capital – Las Vegas. Bachelors loved Vegas, bachelorettes did not. It was considered expensive, excessively focused on gambling and unwholesome. It was also a lot further than places in the MidWest than Nashville. What actions did Nashville take? Allowing pedal bars – multi-person bars propelled by people at the bar peddling like one would a bicycle. These are incredibly popular with the bachelorettes – you can tell many bachelorette parties because the people in the parties wear the same tee shirts.

      Local businesses saw the opportunity. I leave the race and go out for lunch and drinks wearing a tee shirt, gym pants and running shoes. Why? Almost no bars have dress codes. Nashville is very casual. It is cheap with average hotel rooms going for $134 per night. Given the amount of construction going on it must not be too hard to get permits. The expansion of hotels keeps it cheap. But most of all is the live music at small venues. Like Austin. The city must suspend noise permits on some nights because you can hear the music in the street. The variance on carrying open alcohol makes it easy to move from one bar to another. Don’t fool yourself. Bachelorette parties are nothing new. What’s new is the number happening in Nashville.

      I don’t know how the health care cluster got started. Vanderbilt no doubt helped. However, the fact that it became a cluster is the more important point. The Washington Metropolitan area has a hospitality cluster –

      Marriott (MD)
      Hilton (NoVa)
      Interstate Hotels and Resorts (NoVa)
      Sunrise Senior Living (NoVa)

      Where is the focus on expanding that cluster? Virginia puts out plenty of economic development dollars – any being spent to further build the hospitality cluster in NoVa? How about Virginia’s burgeoning medical device clusters in Richmond and Charlottesville? Tennessee may have gotten lucky once but I’ll bet that they worked hard on that cluster once it was started.

      Low taxes are true but that’s a selling point of Tennessee rather than Nashville. Tennessee has plenty of struggling cities. So, low state taxes are no guarantee of city success.

      I note you omitted the public funding of Nissan Stadium and Bridgestone Arena. Are those not government backed initiatives?

  2. Pingback: What can Virginia learn from Nashville (Part 2)? – Bacon’s Rebellion | Bachelorette Party

  3. You hit upon what I think was probably the most important catalyst–the city/county merger. The splintering of government in the Richmond area and the existence of multiple governments in Hampton Roads has undoubtedly held those areas back. The Dillon Rule has also been an obstacle.

    One issue that is usually avoided is that of race. Racial tensions, suspicions, whatever you want to call it, has been the underlying factor for much of the dysfunction of local government organization in Virginia. What is the situation in Tennessee and Nashville, in particular?

    • Very well stated and true, Dick. I suspect another way to prove that might be to compare Nashville to Memphis, the former now eating the latter’s lunch. Not sure, have not looked into it. But differences will be telling in any case.

      No doubt also note Roanoke now driven by Health Care. It too, along with all the Shenandoah Valley needs to re-spark its Hospitality Culture (its branding, good public spaces and places, themes, promotions, scenes, and boosterism.) This has long been key revival strategy and tactics fir most all revived smaller towns long depressed in Rocky Mountain West (Santa Fe, Taos, Durango, Telluride, Silverton, Aspen, Ouray, Boulder, north into Wyoming and Idaho). The bigger towns are harder to do but look at Charleston. People, attitude, culture, wherewithal, political system, and history now as much as location are key.

  4. Dick, I agree with you. That is certainly far more important than any question related to the Dillon Rule. And neither are as important as the tax policy. Yes, that explains Tennessee’s success but not Nashville’s relative success, but it underlies both. Nashville is, like San Antonio and a few other place, just a great tourist attraction. It has a natural selling point with the music industry, but has successfully built upon it. But people build and maintain their businesses there for economic reasons. Since most states do have a personal income tax, those that do not get a nice edge out of that. TN as I recall does tax corporate income, but these days even fairly large businesses are not incorporated and companies that are are still attracted to states where personal incomes are not taxed.

    • Richmonders tend to underestimate the impact of Virginia’s strong implementation of Dillon’s Rule. I wonder how the people of Charlottesville feel about not be able to remove a statue from one of their parks because the Clown Show in Richmond has forbidden localities from making such minor decisions. Arlington was recently able to change the name of Rt 1 / Richmond Hwy / Jefferson Davis Highway by dropping the Jefferson Davis Highway designation. Let’s see … Arlington is one of two Virginia counties that manages their own local roads and they wanted to drop one name of a street in their jurisdiction which has 3 names. What did they have to do? Get permissions from the Commonwealth Transportation Board which, in turn, apparently needed to be lobbied by various legislators and the governor to let Arlington remove one of three names from a street in their county. Ridiculous.

      https://www.washingtonpost.com/local/virginia-politics/2019/05/15/e174356e-76b8-11e9-bd25-c989555e7766_story.html?utm_term=.6bbc31d0995b

      I can imagine our General Assembly voting to prohibit pedal bars in Virginia. Or, better yet, taking a proposed law to allow pedal bars (taverns) and sending it to committee then to sub-committee where 5 Republicans from Hooterville decide to kill the bill without the minimal courage required to put the General Assembly’s votes on the record. Of course the Hooterville committee would first ask the liquor industry campaign contributors how they should vote on the measure.

      As far as city / county government … isn’t that what Virginia Beach did effectively at the same time as Davidson County / Nashville? Virginia Beach has a ton going for it, including an ocean. But Virginia Beach’s population grew by 3.0% between 2000 and 2010, Nashville (on a base half again bigger than Virginia Beach) grew 10.0% during that period. Virginia Beach’s growth slowed from 2010 to 2018 – 2.8%, Nashville grew 10.3% during that period.

      If you go back 100 years the South was pretty sleepy and Richmond was as big a city as anywhere in the South. Over those 100 years Atlanta, Raleigh, Charlotte, Austin, Nashville and other cities thrived while Virginia cities languished. Hell, Greenville, SC grew 16.8% between 2010 and 2018. Roanoke grew 2.9%. The personal income tax point might affect Austin and Nashville although the state and local government get their money from people in other ways. However, North Carolina’s personal income tax rate is 5.25%, Georgia peaks at 6% and SC peaks at 7%.

      Either you have to think that Virginians are just too stupid to succeed or you have to look elsewhere for the problem. I’d suggest looking straight at our nanny state state government.

      And what does our inability to create thriving cities mean? It means our state GDP grows at about 1/3 the pace of well run southern states during the longest economic expansion in history.

      • Well, it will certainly be refreshing to read someone in modern America on the subject of history who knows what they are talking about. Wilfred McClay with his Reclaiming History from Howard Zinn might such a man says Naomi Riley. We will see. bachelorettes and Rock and Roll can only do so much, Meanwhile I wonder why

        • Bachelorette Party Capitals, Rock N Roll, the NFL Draft, Half Marathons, and open air wandering bars get a bit thin as culture for adults or great civilizations over time, or any civilization at all worth a name.

          • Nashville has an opera company and an opera house (the Noah Liff Opera Center). There’s the Nashville Philharmonic Orchestra. The Brown County Playhouse is also in Nashville. Of course Nashville is also home to the globally recognized premier venue for country music – the Grand Ole Opry. While I am sure the country music doesn’t rise to the standards of haute culture in the rarefied social circles of upper crust Richmond, country music appeals to some. Here’s one of the low culture, untalented bands (led by Nashville resident Allison Krauss). Despite being 47 Ms Krauss is tied for second in all time grammy awards. She has 27, tied with Quincy Jones and 3 behind Sir George Solti, Hungarian-born orchestral and operatic conductor, best known for his appearances with opera companies in Munich, Frankfurt and London, and as a long-serving music director of the Chicago Symphony Orchestra. Given that Solti passed away in 1997 Krauss has a pretty good shot at taking the lead.

            https://www.youtube.com/results?search_query=allison+krauss+lay+mu+burden+down

          • Reed Fawell 3rd

            Thanks for filling in details, things gonna be okay in Nashville, no matter what. I’m addicted to Allison Kraus, 2nd only to Lucinda Williams, an addict for life.

  5. If there is no state income tax, what is the principal source of revenue for the state? Sales taxes, property taxes?

  6. Tennessee has no state income tax but investment income is taxed. I guess that’s like New Hampshire. I believe the state sales tax is 7% with local optional add-ons. And like everywhere I know, there are property taxes. I’d guess there’s probably a lot less transfer of tax burden from metro areas to rural areas than in Virginia.

  7. I’d like to know the relationship of development and impact fees or other ways to take some of the burden on existing residents and businesses in Tennessee versus Virginia.

    For example, Fairfax County’s target cash proffer for schools excludes any land costs or building fixtures (blackboards, desks, kitchens, etc.). All of those costs are placed on the real estate tax.

    Tysons is scheduled to grow to 100,000 residents. While some of these people will not have any school age children, many will. (Does Manhattan have K-12 students?) The Comp Plan includes two or three elementary schools and, perhaps, a middle school or high school. Think about it. A city of 100,000 people with two or three grade schools.

    Land has been proffered for one elementary school. But since the target proffers don’t include land costs, think of the land acquisition costs for a high school or middle school. Those costs will increase real estate taxes. Moreover, the Dillion Rule does not preclude Fairfax County from including land costs in its proffer target.

    I bet that a measurable portion of taxes paid in Virginia fund public facilities paid by development in other states.

    • This is excellent observation and question. My sense is that Virginia is beginning to figure out, and figure in, these external and collateral costs. If so, it is welcome and critically needed, one that has been too often ignored along with much else in the history of Va. land use and real estate development. Scatter gun, willy-nilly, ad hoc, fast buck, quick in and out, has long been norm. The marvelous exceptions prove the crying need for reform.

    • Lol. Here are the bills from the 2019 General Assembly Session dealing with proffers:

      SB1524 – “no locality shall require any unreasonable proffer
      HB1801 – House version of SB1524
      HB2342 – “no locality may request or accept any unreasonable proffer”; passed
      SB1373 – Senate version of HB2342, passed
      SB1143 – Dupe, I guess
      SB458 – Continued from 2018
      SB944 – “Removes various provisions granting localities authority to accept cash proffers as part of the conditional rezoning process.” Continued from 2018 passed by indefinitely.
      SB2276 – “Makes changes to conditional zoning provisions first enacted in 2016 by including a provision that may allow certain localities to opt out of the provisions in their entirety by, in part, establishing a stakeholder advisory committee. Laid on the table
      SB957 – Continued from 2018, refiled as SB2276

      Real estate and development interests are the biggest industry based political contributors in Virginia. They have donated $8,313,642 in 2018/2019 (so far) and a whopping $150,453,678 since 1996.

      Don’t fool yourself TMT, the land development industry has fully coopted The Imperial Clown Show in Richmond and that Clown Show is only too happy to pay them back by legislating against “unreasonable” local proffers.

      The 2019 bills are tweaks to 2016 legislation favorable to developers. The bill was introduced by Dick Saslaw, the best friend a special interest ever had.

      The belief that the General Assembly is not actively interfering in localities’ land use decisions is observably untrue.

      The 2016 law …

      “The 2016 law made both elected officials and local government staff extremely reluctant to negotiate proffers. As that law was written, the moment any government official would “request,” orally or in writing, a proposal that fit the law’s definition of an “unreasonable” proffer, the official would be in violation of the law. The aspiring home-building developer would be “entitled to an award of reasonable attorney fees and costs” plus an order to approve the rezoning request in question.”

      “In the period between the end of the 2008 financial crisis and the passage of the 2016 proffer reform law, the amount of proffer money Virginia localities collected more than doubled, from a little over $42 million in 2009 to near $100 million in 2016, according to a Virginia Department of Housing and Community Development (DHCD) document.

      Since that time, proffer collections have fallen about 10%, to below $88 million (see DHCD chart below). Note that these figures do NOT include the value of non-cash proffers during this period.”

      https://ggwash.org/view/71307/virginia-general-assembly-fixes-the-reform-on-residential-proffers

      • No one on this blog has criticized Va. land and real estate development practices on this blog more than I. And my views on proffers are also expressed here. They are subject to enormous abuse by all parties at table. The real question is how better to build external and collateral costs and concerns into the system from the comprehensive plan on down, with as little bribery, chicanery, and political abuse as possible, given Virginian’s mastery of those dark arts of the deal. Look at the Amazon transaction for guidance in a better way. Compare it with NY. That is where my comment “My sense is that Virginia is beginning to figure out, and figure in, these external and collateral costs,” come from. Great highly efficient, commercial, and socially productive generator communities, have been are build without proffers for generations. Cultures can and do change, do it all the time.

  8. Well you hit on it in the photo, we definietly need more 5K races in Virginia. Have you run any in NoVA? I will go back to the past results and see who was faster. You look athletic there nice.

    • I ran the Marine Corps Marathon twice (in my 20s). That race starts, stops and has quite a few miles in Virginia. These days I schedule races to see my out of town sons. Next up – the Rock and Roll Half Marathon in Chicago on July 21.

      There is a Rock and Roll Marathon (and Half) scheduled in DC but it’s in late March. Given the weather up here I find it very hard to get ready in January and February. The only R&R race in Virginia is on Sept 1 in Virginia Beach. Besides being in the middle of Labor Day weekend it must be ungodly hot down there on Sept 1.

      “You look athletic there nice.” Appearances can be deceiving.

  9. Agree with the above discussion about the most important factor, the failure to provide for a rational size and comprehensive unified governance to urban areas in Virginia; but it also bears noting, Tennessee is a national leader in providing “free” access to community colleges without tuition charges.

  10. “Tennessee is a national leader in providing “free” access to community college without tuition charges.”

    I might agree with that in some cases, if I knew what community colleges were going to teach, to who, and how. Enormous wastage goes on now. And harm done. Making it free threatens to simply making it go from bad to worse. Plus nothing is free. And we all know who ends up paying the bill for making free things worse.

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