CHARLOTTE – Later this week, President Barack Obama will stand on the field of Bank of America Stadium here and deliver his acceptance speech that ends the Democratic National Convention. The stadium, located in downtown Charlotte, sits in the shadow of corporate skyscrapers like the Bank of America Corporate Center and the Duke Energy Center. Financial services employees can walk to the stadium and the bars around it from pristine apartment complexes located nearby. Others can get to it by a brand new light rail line that runs to the city’s southern suburbs.
Virtually none of these structures were here 20 years ago.
Residents and city officials view the DNC as a national coming out party. In the past three decades, Charlotte has undergone a boom unprecedented in modern American history. Until 1978, Charlotte – like many other mid-sized southern cities – was struggling to grow, reeling from the decline of the textile industry. But that year, Charlotte began its transformation into the second largest banking center in the United States. The city’s population has more than doubled, from 315,474 in 1980 to an estimated 751,087 in 2011. Seven Fortune 500 companies have headquarters in the city.
But this dramatic evolution has not been without its pains. Charlotte’s infrastructure continues to be tested. Roads struggle to hold the tremendous volume of traffic that floods downtown each day. Gaping class divisions have formed along old racial divides: Growth has been concentrated in mainly white south Charlotte, while other parts of the city, which are primarily African-American, have been left behind. Crime has spiked and deep pockets of poverty have formed. Schools in many parts of the city under-perform: 11 schools in predominantly black neighborhoods were closed in 2010. And the financial crisis of 2008 decimated real estate values along with city tax revenue.
Charlotte’s story, however, is similar to that of many other American boomtowns. Like Phoenix, Las Vegas and other Sun Belt cities, Charlotte’s growth was powered by the economic prosperity of the 1990s. But it overextended itself in the first decade of the 21st Century, and lost tens of thousands of jobs during the Great Recession.
Now, Charlotte is a city in recovery, and remains one of the fastest growing cities in America. It’s a fascinating study of how cities cope in a seemingly endless age of crisis. And it’s facing an uncertain path forward.
Seeds of Change
Charlotte’s banking revolution has roots in an unlikely place: liquor laws. Prior to 1978, single drinks could not be served in North Carolina. People who wanted a glass of wine with dinner at a restaurant would have to bring their own bottle. Bars simply didn’t exist.
After state voters passed what became known as the “liquor by the drink” law, Charlotte’s hospitality industry began to grow. Around the same time, the first wave of northern immigrants arrived, according to Bob Morgan, president of the Charlotte Chamber of Commerce.
"In 1978, IBM moved 1,000 families from upstate New York. That was the first big influx," he says during an interview in his downtown office. Prior to that, "You couldn’t buy pasta. You couldn’t buy a bagel in Charlotte. The IBMers really began to change the community."
The Charlotte airport was also expanding. Piedmont Airlines chose Charlotte Douglas International Airport as its hub, connecting the city with major financial centers like New York and Chicago.
According to Gary Ritter, a history professor at Central Piedmont Community College, all of this, combined with favorable bank consolidation laws of the late 1970s, provided a prime opportunity for banks to grow along with the city. First Union Corporation and the North Carolina National Bank (NCNB) began aggressively acquiring smaller regional banks that formerly served farmers and the textile industry.
Throughout the 1980s and 1990s, First Union and NCNB undertook bullish acquisition strategies, taking control of banks across the southern states. When all of the southern banks were consolidated, they looked to acquire nationally. In 1991, after acquiring Atlanta-based C&S Sovran Corp., NCNB became NationsBank. Seven years later, it became Bank of America when it acquired San Francisco-based BankAmerica. Through mergers, First Union eventually became Wachovia.
Other sectors of the Charlotte economy also started to thrive. Duke Energy, based in Charlotte, grew to become the largest electric holding company in the country. US Airways, which acquired Piedmont in 1987, made Charlotte a hub, increasing the number of flights coming in and out of the metro area. By 2007, Charlotte Douglas was the fastest growing airport in the United States, adding 13 percent more passengers from the previous year.
But banking was – and still is – the biggest game in town. Charlotte is the second largest banking center in the country, behind only New York. And as the banks grew, thousands of workers and their families flocked to the city. There was only one problem: They had no place to live.
"When I was a boy I used to ride my horse out and herd cattle on our farm in what’s now south Charlotte," says city council member Andy Dulin. "When I was older, I used to do it on my motorcycle."
Dulin is one of two Republicans on the city council (there are nine Democrats). His district occupies a large portion of south Charlotte and many of the city’s wealthiest neighborhoods. According to Dulin, the land where he used to herd cattle is now a housing development called Raintree Country Club.
Before 1980, nearly all of the land south of Charlotte’s city limits was farmland. Thanks to favorable zoning and the availability of space, much of it has now been converted to housing, retail, schools and other infrastructure necessities. The banks needed workers. The workers needed homes and places to shop.
As the suburbs grew, so did the city. North Carolina law allows cities to annex communities that are adjacent to city limits. So as new, high-paid workers moved to Charlotte and moved into new housing developments, the city absorbed new neighborhoods. This quickly increased Charlotte's tax base and allowed large infrastructure improvement projects to move forward. (Find a map of Charlotte's annexation history here [PDF]).
Everything in south Charlotte is very new and very clean, and signs of wealth are undeniable. But the area lacks the architectural and historic charm common in cities around the South. As you move away from the city center, homes become more generic. Many housing developments are comprised of seemingly identical McMansions and have names like Ballantyne Commons and Piper Glen. Most of the stores and restaurants that occupy the hundreds of glistening new strip malls are high-end chains.
Patsy Kinsey, a Charlotte native and city council member who represents an older area of Charlotte, proudly told me she didn’t come to south Charlotte and leaves her district only to get her Volvo fixed. "Our neighborhoods really strive to maintain their history, their feel," she says.
And south Charlotte’s convenience can be a bit off-putting: There were four Harris Teeter grocery stores within two miles of the house where I stayed while reporting this story. It’s also very easy to get lost: everything looks very similar.
But for nearly three decades, Charlotte’s growth seemed unstoppable. Interstate 485, the city’s beltway, connected south Charlotte with its bustling downtown, spurring more development. The National Basketball Association came, as did the National Football League. Banks kept adding jobs, bringing more and more people to the city.
Then the 2008 financial crisis hit, and everything started to fall apart.
This story is the first in a three-part series on the recent history of Charlotte. Stay tuned for parts two and three on Wednesday and Thursday.