CHARLOTTE – In 2014, work on a $5.25 billion project to double the size of the Panama Canal should at last be completed. When it's done, the world’s largest cargo vessels – known as post-Panamax ships – will finally be able to pass through it. Right now, the largest ships that can navigate the canal carry 5,000 cargo containers. When the expansion is complete, ships that can carry 13,000 containers will be able to pass through.
The expansion is expected to have a dramatic impact on trade between Asian nations – most notably China – and the United States. Right now, post-Panamax ships are forced to dock on the West Coast. Goods are unloaded and shipped east by rail. In 2014, these same ships will be able to unload on the East Coast. This will dramatically lower the cost of Asian products that reach the U.S. market.
Ports on the East Coast and the Gulf of Mexico are frantically upgrading equipment, roads and rails to keep pace with the canal expansion and prepare for the influx of cargo. Some cities are counting on the canal to be a key driver of economic activity in the coming decades. One of those cities is Charlotte.
In May, work began on the $92 million Charlotte Regional Intermodal Facility, a 200-acre rail cargo transfer station. With a completion date set for 2013, the facility is poised to become an integral part of Norfolk Southern’s Crescent Corridor, connecting ports in New Jersey and New Orleans with eastern cities.
The facility, which is expected to process 200,000 cargo container transfers each year, is located between two of Charlotte Douglas Airport’s runways, allowing easy access to air cargo. It employs rail infrastructure left over from Charlotte’s days as a textile giant. And it will be connected to the city beltway via a new interchange. It is expected to bring billions of dollars in new business.
According to City Manager Curt Walton, projects like the intermodal yard are key to Charlotte’s continued growth. He says the city is also in need of what he calls "transformative projects," or projects that can systemically attract new industry, create new jobs and transform low-income neighborhoods.
Walton included these types of projects in a $1 billion capital spending plan in his 2011 budget. It included $25 million to renovate a local stadium into an amateur sports center, as well as $119 million for a streetcar program. The plan also included a series of infrastructure improvements in poor areas of the city.
It's imperative for Charlotte to grow its tax base – especially the real estate base – beyond the southern part of the city, Walton says. Right now, home prices are only going up in the south quadrant. Prices are falling in the rest of the city.
South Charlotte “can’t afford to keep paying 50-plus percent [of taxes] and the other three quarters of the city can’t continue to drop like a rock,” Walton says.
If the tax base doesn’t expand by the next property assessment reevaluation in 2015, the city could be in danger of loosing its triple A bond rating. The ratings agencies "have been telling us for several years that you have to figure out a long-term growth plan for the city," Walton says.
"A lot people think that I am crying wolf,"he adds. "They are very, very wrong."
An Unmoved City Council
Charlotte's City Council hasn't taken Walton's advice very seriously. They rejected his spending plan, which was to be paid for with an 8 percent tax increase, in a 6-5 vote. Charlotte Mayor Anthony Foxx vetoed the council’s decision, but the plan was shelved. Walton tells me there is no point in going forward without unanimous support.
The vote highlighted two related challenges for Charlotte. The first is political apathy. Many people who live here are transplants and are not historically engaged in the city’s civic life. Turnout in the last mayoral election was just 16 percent, the lowest in years. And the majority of these transplants live comfortably in south Charlotte, well insulated from problems elsewhere.
In the rare instance where a broad base of residents are engaged – as is the case with public schools or public spending – a second challenge emerges: protecting political interests. Andy Dulin, a Republican who represents south Charlotte, tells me he doesn’t believe government should be in the development business. David Howard, a Democrat, says the more fortunate people in south Charlotte have an obligation to help the rest of the city.
"We used to have conversation about what we need to do with our kids. The conversation today in this community is what's good for my kid," Howard says. "We used to do things that were good for the community as a whole… Now that we arrived, we don't care about what happens to each other any more."
With political and racial divides as pronounced as they are, it will be hard to build consensus on how to grow the city, especially with the slow economic recovery. But without drastic changes, growth is likely to continue to be concentrated in the city’s southern neighborhoods. A light rail line connecting the south suburbs with the city opened in 2007 and has been an unqualified success. Similar transit projects linking other parts of the city have fallen flat.
But even with these challenges, the city continues to grow. According to Bob Morgan, president of the Charlotte Chamber of Commerce, 30,000 new residents are coming to the city each year. The city’s energy sector, led by Duke Energy, is growing quickly. Foreign companies like the German manufacturing giant Siemens have offices in the city. The University of North Carolina at Charlotte will soon have more students than Chapel Hill.
Nearly all of this excitement is happening downtown or in the city’s south. And if anyone understands the need to develop all of Charlotte, it’s Mayor Anthony Foxx.
Standing for the New South
Foxx knows first-hand many of the challenges the city faces. He grew up in a single-parent family here and attended West Charlotte High School. He went on to Davidson College, just north of the city, and received his law degree from New York University. He eventually returned to Charlotte, was elected to the city council, and in 2009 became the city’s youngest mayor, at age 38.
Foxx was elected just as Charlotte was feeling the full impact of the financial crisis. Unemployment was at 13 percent and it wasn’t yet clear how many more banking jobs would be lost. But his election marked a decided change of direction: he was the first Democrat elected mayor since 1987, and only its second African-American.
Foxx called the city council’s recent no vote on the capital spending project “perhaps the most irresponsible decision in City Council history.”
"We have to develop a plan and …there’s pain ahead associated with it," Foxx says. "I’m optimistic the guts of the proposal that we just considered will be the blue print in which we will proceed."
The lifestyle that Charlotte sold for decades is changing, Foxx says. As the city grew into the suburbs, it offered the perks of low-density growth: large homes and yards, safe and open streets, and new, high performing schools. But as the city runs out of land to annex, it must concentrate on higher density development closer to the city center.
"We ought to urbanize in a way that is intentional, a way in which we establish land-use patterns that are linked to our transportation network, particularly transit," Foxx says. "We protect those quiet corridors of the community but we find places in the community where we want to invite dense population growth."
Foxx also recognizes the steep achievement gap in Charlotte schools. He praises Project L.I.F.T. (Leadership and Investment for Transformation), a non-profit with a fundraising goal of $55 million to help students in west Charlotte. He also stresses that it’s important for children to have realistic professional ambitions and recognize the need for post-high school education.
Foxx spoke Tuesday night at the Democratic National Convention, taking place at Charlotte's Time Warner Cable Arena. With all eyes on his city this week, he says he’s focused on making sure the country understands Charlotte’s remarkable growth and the opportunity it continues to offer for businesses and workers.
"It’s a city that took a kid, who grew up in a single-parent family 41 years ago, gave him great schools, gave him a great neighborhood, gave him safe streets, and years later became mayor. That’s the type of story that’s possible in Charlotte," Foxx says. "There’s a humility built into the way the city talks about itself. Now is not a humble time."
Top image: Homeless people wait in line for food donated by churchgoers in downtown Charlotte. Photo by Carlos Barria/Reuters