Chattanooga Growing Into Remote Work Hotspot

at Bloomberg. Mayor Kelly, how are you. I'm doing great. How are y'all? We're doing well. It's good to have you with us. It's great to be here. Are we doing well? We have a lot of questions that are out there in terms of economic You were just saying, how like the market. It's a beautiful thing. This weekend was super hot, but it's today's and that's what I'm thinking about. Okay, So so tell us how the outlook looks from your perspective and what's going on in your city.

I've only been the mayor for about a year, you know, I came at it from a business perspective of a business guy. And and I spent a lot of time in the philanthropic world too, and didn't really and still don't really have future political ambitions. I really just believe that Chattanooga has the potential to be one of, if not the best city in America, all things considered. And so entrepreneurs hate wasted potential and and that was kind

of my thesis, right. So, but we're doing well. I mean, we we weathered the pandemic well, I mean, we had our real challenges with public health and attitudes towards vaccination. Um, but we you know, we we the city created some incentives to to incentivize vaccination that that that we know worked, and um, we made it through. What's well? What's well? Tell us about growth? Tell us about unemployment? Okay, well, unemployment,

I want to say, is sitting about three. Um. Really, frankly, most of our problems are stacking up on the other side of the ledger where you know, again I'm every day turning the crank with one hand for economic development, but on the other hand, you know, we have to tackle these problems of workforce development and affordable housing which are becoming increasingly difficult. And you know, we're imagining our

public transit system, which is going to be important. So, um, you know that's the bulk of what I do every day. How do you get more people to move to Chattanooga for work? Well, again, we have the fastest, cheapest, most

pervasive public internet in the country. We were lucky, you know, my predecessors had the vision and foresight to invest I think it was about two twenty million bucks at the time, which seems like a cheap date to build out a really you know robust Why don't you look at me when you said that, I'm just getting I'm just kidding.

But it's been transformative, it really has, right, So you know, you can get ten gigs speed there, download up two hour hot f movie in three minutes, and you know for a couple hundred bucks a month, and one gig is maybe about a hundred and so we had a lot of people that moved in during the pandemic. Um. The thesis was basically that you know, if you can work from anywhere, why would you not be in the place for the best quality of life? And that really

is chanting Stock and Trade. Well, Mayor Kelly talking to us about this because I was looking at there was I think United Van Lines did a survey. They've been doing it for forty five years. Ranks Tennessee seventh on the list of top moving destinations and that was for last year. So tell us about how many people, like, what is the inflow that you're seeing? Well, that's really part of what what keeps me up at night is not knowing. Um, A lot of it is anecdotal, right,

I mean the Chamber of Commerce. If if I recruit a company to come to town, I meet the CEO and you know, and come to a meeting and there's two hundred employees. But the long tale of the of the remote workforce, you you don't know. I mean, I was telling a story about being in a soccer game and somebody flagging me down because they knew I was a Tottenham fan and they were Arsenal fans and they

were giving me grief about it. They moved here from Brooklyn with apologies to the Metro, but they moved to Chattanooga, and uh, I mean, I don't, I did not. How are we supposed to know who they are? Right? So, as the mayor, we're still newly on how we can find out who's there now and and like what do you do, I mean, you're working. We don't in the aggregate,

we we don't know we know that. Um. So for example, we had him run a study through our electric utility to that showed uh, new sign ups for more than fifty miles away for for a electric service, and that was about ten thou people, so you know, fairly significant. Uh. And then we sent them a little bit of a follow up survey and it was anecdotal. The response rate was not great, but it was what you would expect, right. It was a lot of remote workers, more retirees and

than I realized. But we still don't really have a way to kind of rally them and leverage them as a group, because there's some really smart and talented people that are there. But we yeah, well, you know what I wanted to ask you, because it's funny. We had this story from the credits we CEO about saying that you know a lot of make employees, they're not going to come back to work. Do you think that the really smart conversation or thought about this is that things

have changed dramatically. People are for the first time in a long time, Americans are moving around the country because they can do you think that stays with us. I do, I mean I do, and I think it has kind of fundamentally changed the landscape. I think it's good to have a diversified economy. I don't see that Chattanoogle will completely rely on that. I mean, we're still, you know, spend most of our time working on traditional economic development.

But again, our you know again are if we have a petitive advantage of a city, it's our outdoor space, Our our outdoor activities are green space. And so that's we're going to continue to leverage that because it comes back to quality of life. Still with us is Tim Kelly, may or Chattanooga, Tennessee. He is here in studio with us. What would surprise people about Chattanooga, those who might not be familiar with the city probably just how how green it is, how much there is to do there, and

how and how you know, cosmopolitan it is. If we were talking about you know, there are a lot of stereotypes about the South um that are um, maybe we're well deserved at one time, but but it's a it's a very very um diverse, artistic, progressive city like you know, all the all the cities in Tennessee, are you know, not to get too political about it, but they're they're largely blue cities, if not purple. And uh, yeah, it's a it's a it's a great city to live in.

What are you doing to attract families there? Well, again, affordable housing is becoming difficult. But schools. Again, Tennessee is a very low tax state. That's that's a big drawing card. Uh. The downside is we don't fund education well, so there's a big push state wide to refocus on education funding. Uh, and that's kind of my Bailey Wicks. Are you seeing people who are moving to Chattanooga in the most recent wave.

Are they sending their kids to the public schools? Or they are opting for private because they're moving to places with a higher cost of living and potentially keeping the same salaries, so they do have some extras disposible income. I think it's both. I don't know the data, um you know, chapter in verse, but I mean, I will say private school penetration in Chattanooga is higher than the national average, and we have some fantastic private schools. Um. But public school quality is also on a on a

very good trend. So I think it's both In according to you know, income Mary Kelly. We have about thirty seconds, then we'll come back and talk some more. You said you've been on the job about a year or so. What surprised you about this position so far? Oh? Man, Um, really probably just again. You hear all the jokes about the speed of government, and I'm a big fan of our patron, Mike Bloomberg, and and it's all true. Right, it's a it's slow, and it's I am I'm a

pretty impatient guy. So um, it's it's it's tough, but I'm I'm I have a plan. I've devised my ways to move things along, and I come in most days with my hair on fire. So keep swings. All right, We're going to continue with Mayor Tim Kelly, mayor of Chattanooga, Tennessee. You're listening and watching on YouTube Bloomberg Business Week, and this is Bloomberg Radio. I want to get right back to Tim Kelly. He's mayor of Chattanooga, Tennessee. He's in

our Interactive broker studio. I feel like Tim and I still have a list of things we want to get to. One thing we do want to talk to you about is real estate, and as people are moving into Chattanooga. Um, is it so expensive that locals are getting priced out? It is, it's getting there, and so you know, we've jumped on it pretty quickly. UM. I announced a thirty three million dollar allocation of a city budget, which the

city side of Chattanoo is a pretty good chunk. Uh. And then I'm gonna use my UM experience in the philanthropic world to really work with our local foundations and national foundations to try to raise a hundred million total and then also contribute a lot of city property that we have towards the effort. But but it is, um, it's a form of inflation, and you know, you have to get on it early and often. So we're we're where where there's a lot of buildings going up. Thank god.

You know, the splatchings issues seem to be slacking up a little bit. But we we are going to have to be very intentional about increasing supply. What is typical cost of the house uh for a family or housing for a family there, and how much has it increased in the last two years. So the stats I've got, I want to say, the median household price five or seven years ago is like one fifty nine and it's gone to I want to say, to seventy nineties somewhere

in there. So that's a pretty meteoric jump. So Mayor Kelly, you know that there are people in the New York metro area saying, Okay, I'm packing up and moving to Chattanooga. I mean, that's the thing that's going on, right, the perspective of exactly, I mean, that's part of the appeal. It's sure, it is right, there's no question about it. That plus plus the Internet, plus all the green space, it's not really that complicated. But but the trajectory has

headed on. I mean, that's great. That's what we're here to do, or I'm here to do, is to try to sell Chattanooga and push economic growth. But but again, my job is a Goldilocks problem, so I have to have to have to push hard. You know, I wanted to talk to you about Roe v. Wade because it's a business store and Tennessee is one of about a dozen states I believe they're thirteen that have a so called trigger law, so abortion would become illegal if the

Supreme Court overturns Roe v. Wade. We see companies speaking out about this, especially that companies that have employees and states were so called trigger laws could take effect. What would you say to somebody who's concerned about moving to

a state where abortion could become illegal. Well, I am concerned about it, right, I mean the break on economic growth could be significant the flip side as a as a city mayor, right, I kind of try to live by the old serenity prayer and worry about what I can control and not worry about what I can't control. And that one is is well above my pay grade. But but I am concerned as I think the most

most business minded people in the state of Tennessee are Um. Yeah, I'll leave it at that, Okay, but I am going to follow because you said you're concerned about it being a break on economic growth. You could see something like that slowing either companies coming to this, coming to the city, or expanding within the city. Yeah, yes, of course, right. I mean, I think history has shown that companies and workers,

particularly the knowledge economy, want to be in diverse, progressive cities. Right, And and that is sort of antithetical, uh, running the opposite current from from from overturning Browy Wade Um that said you know, Tennessee has always been a very pro business state and has has pro business leadership. I will will see how it all plays out, but it is

it is of concern for us, you know. I do want to point out, as full disclosure, Chattanooga among the first AID cities selected for a nationwide initiative to improve government performance and transparency through civic data. We're talking about Bloomberg Philanthropies, What Works Cities and which is providing support and training for midsize cities, including your city. I mean, what does it mean to be a modern city today? Well, again, I guess I'm if I came at it from business

and and philanthropy, not from politics. Advantage. I think it's a huge advantage. I mean again, Mike Bloomberg of candidly is my hero, right, I mean like I come at it from the same direction that he did. We you know, executive politics is a very very different, non ideological exercise than legislative politics. My job is to run the city like a Swiss watch, right to to to really have the machinery of government work. And I don't think that's

a trivial undertaking. Because we ran in my whole campaign based on filling potholes, which seemed really probably about analogy but pedestrian. But what occurred to me through the course of the campaign was people want to know that government can solve their problems. And if you can't solve their simplest problems, they're not gonna trust you to solve more abstract problems. I mean democracy. I think it's fair to

say as an institution is under is under threat. And I think cities are where we can prove that democracy works and that government can still solve people's problems. But all people, all people's problems. How do we make or that, because that's that's the world we are in. Here. We come off as two year pandemic, right uh, and we see the gaps have just widened absolutely. And so the thesis of my campaign not to get too political was, you know, one Chattanooga, I published a forty page strategic

plan that's basically relies on two tenants. One is, you know, creating government that works better for all Chattanoogan's. But the other one, very frankly, is getting the difficult topics on the table and talking about them until we fix them. And that's racial equity, right, And it's not as Raphael Bostick eloquently said to the Atlanta Federal Reserve, racism is

is expensive, it doesn't work. And so you know, the gaps between the black and the white community and Chattanooga are are worse than they are nationally and it has to change, right, So that's that is a very explicit goal for us is to close the gaps in average income and network between our black and white communities. And again, look, i'm a startup guy, I'm an entrepreneur. A lot of it will be focused there, a lot of it's focused on workforce development, adult learners, and and of course good

old fashioned education. We need to fund from early childhood to a post secondary. We need to fund our educational institutions better. All Right, So I'm gonna say, i feel like we've been having these conversations and I'm not I'm I'm targeting you because you're here, but I mean it more broadly and the same thing, you know, after George Floyd, Like,

these were not new conversations. So what is it? So many people say, Well, the people who are most impacted don't have a seat at the table, right, So so what would you say if you could pick one or two things that you think would change some of the inequities that are out there, whether it's black, white, whether it's you know, well, look, I mean it's to some extent,

it's an attitudinal thing. A good friend of mine ran against me, is mayor a black man and I one, you know, and um, and if there was a consolation, we're you know, we're still quite close. You know, Racism is a problem for the black community, but it's a problem with white people. Right, So I think as a white candidate can can do some things to help close those gaps that a black candidate might not be able

to do. And that's what I try to do on a daily basis, right just to keep having those conversations in a very very intentional way, and again not in a political or polemical way, but in almost a utilitarian way. Right, this this doesn't work, it's it's not working, and so we we've got to figure out a way to bridge those gaps. And again that's what we again, that's what we do. Your background is as an entrepreneur, as an executive. You started companies, you started the soccer team there, I

did my favorite startup. But what comes what comes next for you? I mean again, I firmly believe I have Andrew Young to thank for the quote. But I mean, entrepreneurs hate wasted potential, and I firmly believe the Chattanooga has the potential to be one of, if not the best cities in the United States. And that's what I'm going to spend the next seven years doing. I don't have, you know, political ambitions beyond that. I'm I'm going to pour every ounce of my energy into into Chattanooga and

not worry about anything else. So you're saying, if they said, can you can be a senator? Could you? I'm not. I mean Corker is a good friend of mine and and has been a great mentor of media something else, and bonk Corker would tell you that like being the mayor of Chattanoog was still the best job you ever had. I would never say never, but I can't imagine. All Right, Tim Kelly, what a pleasure. UM, thank you so much. I really appreciate it. He is the mayor of Chattanooga.

Joining us in studio, I'm Carol Masser along with Tim Stanovic for the Hold Bloomberg Business Week team. Have a good, safe evening everyone, This is Bloomberg