You're listening to Bloomberg Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio.
Let's get right to it because join us once again is Tim Kelly. He's the mayor of Chattanooga, Tennessee. Back in our studio. Chattanooga, by the way, was among the first cities selected back in twenty fifteen to participate in Bloomberg Philanthropies What Works Cities initiatives, and then in twenty twenty one, Mayor Kelly named as a member of the fifth class of Global mayors to participate in the Bloomberg Harvard City Leadership Initiative program. And this is of course
done with Bloomberg Philanthropies. We just like full disclosure to put it out there. Mayor Kelly, welcome back, Thank you, great to be back. Well, it's great to have you here. It's been about a year.
It has been.
Yes, what's changed.
Well, I think we're you know, we're back on the good foot. I think there were a game as we were talking about. There's a lot of anxiety a year ago coming out of COVID. But Chattanooga's in a good place. It's great to see Manhattan in a good place.
We're getting there.
We're getting there. Yes, vacancy still right, but you know, we've got again our world famous Internet's gotten even faster in Chattanooga since we last.
Spoke, which was an initiative that we talked about last time, and you guys were really working on it.
We did, and we're up to twenty five gigs of speed and I have a new quantum initiative we're working on there. We have the world's first commercially available quantum network. Now all the.
Working from home folks or what is that?
Well, the quantum network is going to be really more for research. At this point, we have yet to see where that will bear fruit. But again, the fast internet, and I should say symmetrical fast internet, has really been helpful with the work from Home group. We had a lot of folks come in during the pandemic and they are staying.
To Carol's point though, on that initiative, how is it impacting the demographic of workers in the city.
Yeah, it's really interesting because, frankly, from a mayoral perspective, it's hard to get our arms around, right, we have this long tail of talent that's there in typical economic development, you know, you have a new CEO, you come and talk to everybody. There's five hundred people. We don't have a really great way of getting our arms around you know, who's there and what talent they do have to leverage those talents. I mean, I bump into the people.
Don't have a way.
Well, there's not a there's not a flagg to run up the flag bol to say hey, all the new people, you know, come in and introduce yourselves. Right, but they are there, and they're they're adding to you know, as we run across them, adding them, weaving them into the civic life of the city. And it's it's making Chattanooga better place.
What's the toughest part of being a mayor right now? And I'm just thinking, you just put out a.
New budget, you know, I was talking to with the City Leadership Initiative, which is fantastic and we're forever grateful to Bloomberg for that. To a public health professor who said, you know, the pandemic was bad enough in its own right, but I think what people have forgotten it's a bit like somebody put their hand in the middle of a waterbed and just pushed down right. So the at the margins in particular, cities are still dealing with the wreckage
of in addiction and mental health. I mean, we know where homelessness has been a terrible problem, so all of those issues. I mean, we are still in the middle of a mental health crisis nationally, I think, and I think there are a lot of cities that are coping with that well and so not so well. So we've had a good track record. We were able to reduce our point in time count with our un sheltered population by almost forty percent, so you know, we're making good
progress there. But it's tough for mayors. It's tough because it's our responsibility.
It was interesting I was talking with someone from Milkin yesterday who's created a mental illness app, and one of the things that he mentioned is the shortage of therapists. That's even in an online app, that you just don't have enough therapists out there.
Yeah, And when I came into office, we established an Office of Community Health, and that is my vision for that department as we pivot out of COVID, is really to focus on mental health and emotional health. And we've got to figure out a way to get more people into the industry. Because you're right on a per capita basis. I mean, Chattanooga is way way behind the curve, and so that's the first step to solving it.
I want to I want to follow on that only because also at milk and I moderated a panel in real estate and one of the things that they talked about again is that there's not enough workers in the housing industry to build homes. And the net net of that was and I'm curious how you feel about this is immigration and just saying we need to kind of open up the border to let folks in well, especially when we've got an aging demographic population here.
You know, again, I'm an extremely practical person. I'm a big gug and Francis Harrez and it says it all the time the Mary Miami. But there are really three political parties in the United States, right, Republicans, Demmocrats and mayors. I mean, we have to be relentlessly practical, and you know,
clearly we need meaningful integration reform. I will say, in Chattanooga, we started a career construction academy to train kids as they you know, it's something that they can go to while they're still in high school to learn the trades and try to build a pipeline of talent into that industry. And we're taking a similar approach across our educational system to try to meet, you know, the needs of industry.
Can I talk to you about another issue that you mentioned earlier, which is mental health specifically related to drug use. So you know that's an issue for the entire nation, but I feel like cities are like little nations. You're the president of your city sort of. Can you talk to me a little bit about how you're thinking about opioid overdoses.
And what can be done to Yeah, look, it's a it's a terrible problem and and you see it move around on the map, and again we're dealing with it in Chattanooga, and you know the all of our first responders of course are carrying narcan, and uh, it's it's tough. I mean, it's been really really hard on on our police and our paramedics and first responders. We we have to we need it's you know, we're Tennessee. Unfortunately it's not a Medicare expansion state makes it more difficult, and
we we are doing our best to keep up. We're fortunate Chattanooga has a lot of great philanthropic assets, one of which is uh uh, the Chattanooga Area Drug Addiction Center, a treatment center. But the beds are full, so you know, we need more beds and we and we need more help.
What go ahead, man, you know, you go.
I just wonder what's missing, right, Like, what help would you want from the federal level.
Even funding, you know, funding for for for training in and for and for treatment. I think, uh again, our strategy around around the unsheltered population is really we bought we bought a motel. Now this is not up and running, but it will be for for what's called permanent support of housing, right, which essentially is proctered housing to get folks back on their feet and get them the help they need. Whether that's it's it's generally right, it's it's
not one thing, it's many things. And there's a lot of the sort of comorbidities I suppose you'd say with addiction and mental health. Uh So that's that's the next step for us and filling out our what we can control in terms of our strategy.
Why is it happening still? Why is there such addictions?
Well, I'm not a you know mental health expert. Again, I'm a mayor. We have to be a little good at everything. But I think it's hard for people who are doing well and not in a state of crisis and not on the margins to relate. But of course, at any given time, there are a lot of people struggling for whatever reason. And again, I think the COVID crisis was hugely disruptive and it just really flipped a lot of people over the edge.
So you think that's what it is.
I do.
Do you think we still over subscribe or prescribe?
You know, I don't. I don't. I don't think I have a prescription. I'm not a you know.
But we've been talking about this for a while and I agree like more treatment centers and you know, training so that people can deal with it. But I always think about how do we get to the core of what creates the problem?
Well, I noticed recently that the state of Wyoming, a very republican state, has it's a really interesting article in the Casper Star Tribune taken a different approach to mental health, where again not something you would expect to see, and I have a republican state is really focusing on the social determinant of health. And that was great news to me because ultimately it's practical and common sensical and I'm hopeful we can take a similar approach across the country.
And we're going to come back and talk a little bit more. But I feel like it all must go down to prioritizing and budgeting. So when you're looking at your sort of balance sheet for the city, what is your thinking on how you're going to allocate your resources and where you're going to take from to give from, given that the issues are always changing.
Because you have to have a balanced budgeting of course.
Yeah, and we just had a budget and unfortunately it included some staffing cuts and it's tough, so always always tough. But so again Office of Community Health and I established coming in will be We have also of Community Development Department, and again my focus is to get them focused on mental health in the neighborhoods, right, I mean establishing those
sort of things that bring people together. The Surgeon General is talked a lot about this epidemic of loneliness, right, bringing people back together and again focusing on those social determinants of health. It's interesting as part of the Bloomberg Philanthropies program. We had an innovation cohort looking at the causes of youth gun violence, which is a terrible epidemic, particularly in the sow And guess what they found that it's young men in crisis right, that need mentorship, that
need people to talk to. And so that's the strategy we're going to take, and that is the focus that will take from a budgetary purge.
I feel like we hear that a lot. Yeah, it's young men in crisis, and so they're ending up going into some really tough paths. Let's get back to our guest, Tim Kelly, mayor of Chattanooga, Tennessee, here in our Bloomberg Interactive Brokers studio. As we said, he participated in the Bloomberg Harvard City Leadership Initiative program on his city has also been singled out before that, and this is all part of the Bloomberg Philanthropies programs. Mayor Kelly, a lot
of different issues. I was just coming back from Milkin. We talked about regional banking, we talked about concerns about real estate, particularly office. There's a lot of focus on green technology. I want to go through a couple of things. If we may First of all, regional banking. Is it impacting you guys at all?
I haven't seen anything in chattanoog along that along those lines. No, thank goodness, I think again. I saw the news on TD and First Horizon. But to my knowledge, you know, the wheels are still moving along nicely in our part of the.
World, and the economy is moving along in banks are lending and it is I mean on mortgages and being able to.
Yes, unemployment rate and Chattanooga is a tenth of a point away from its lowest ever rate. So I mean the economy is chugging along nicely in.
Chattanooga, and I know, lower than the national rate.
Yes.
Let's also talk about so the outlook in terms of when we talk about recession inflationary pressures, you guys are doing okay?
Yeah, No, I think so. I mean, again, we've obviously seen inflationary pressure there. I mean, our budget was when I came into office, I had to give twenty four percent raises across the board to our police and fire and public works employees. And it was tough because again, costs kept going up. And so we just did a budget that includes not only a step plan, but a but a but a cola. But it's tough. It's not catastrophically, it's tough. I hear tougher stories around other cities from
other mayors, but uh, we're managing affordable housing. Big issue for you guys. That is a big issue. And again last year's budget I set aside again not a huge number for a city like Chattanooga. It is, however, one hundred million dollar fund to subsidize that, and managed to recruit a really great Chief Housing officer out of the City of New Orleans named Nicole Hammond, who is creating a toolbox for us to create in subsidize affordable housing.
And we've been able to create about uh let's see that last year and initiear's budget about a thousand units. And we'll continue on that role.
Sonship both.
Yeah, we're looking at some shared equity models for ownership because one of our goals is obviously to close wealth gaps in our community, and so I don't see how we do that without finding ways to, you know, have the historically disadvantaged populations participate in in in the equity of home.
Ownership paper, we did a Business Week story about Austin, Texas, which we're just talking about and how a lot of the new housing there happens to be for very high income individuals because of you're a developer, why would you not right market to the highest bidder?
Well, that's right. I mean, if you're gonna, you know you're gonna, you've got five hundred square feet, why would you not sell it to the ice builder? So I think that's where wise thoughtful you know, government can can intervene and essentially work with We're in the process of rewriting our zoning code. Uh. And again, I mean I'm
not a I'm a market guy. We're going to work with the market, but I think we can create thoughtful incentives and I think probably the easiest way to do that is to deep risk investment or work with a capital stack to to to make sure that you know either you're guaranteeing a certain return or or doing loan loss funds to make sure that investments are safer.
So, if you're a market skuy, how do you not prioritize grow, grow, grow, which would turn you into the eventual Austin.
Well, again, my parks and Outdoors manager Scott Martin says this all the time, Like Bigger is not better. Better is better? Right? We have Nashville to our northwest, we have Atlanta to our southeast. We're not going to be those cities. We don't want to be those cities. Chattoo is a very green city. It's a beautiful city. I'd like to think we have, you know, the crown and our the jewel in our crown rather really our quality
of life. And so it is somewhat of a Goldilocks problem, right, I mean, we want to make sure that we don't endanger that. We're already dealing with more congestion and we have had a lot of folks move in. But you know that's my job to manage that.
So much freight goes through you tons man. I saw a statistic roughly eighty percent of the nation's freight passing through your city en route to its final destination.
Yes, it's a big issue.
It's a big issue. So how do you manage that? How do you benefit but also protect? As you say, what is wonderful about the city.
Well, we are working with an organization called Thrive Regional Partnership to look at ways that we can make again. It would take many, many years to build a bypass around Chattanooga. But the Governor Bill Lee uh As in this year's budget put forth a plan for choice lanes, which which the state of Texas already has, you know, uh cleverly named right they're not they're they're they're toll
lanes by choice. That will certainly help. And I think I think Chattanooga is going to get some priority in that regard, and and and and that will certainly help. Uh. Again, our our Chattanoog is a really you know, mountainous place with a lot of curvy roads going through, so it's a it's a pain point for us.
So I love what you said earlier about three parties Republicans, Democrats, and mayor. Yes you are an independent.
I am, you know again, well, because again I was very much taken with this book that Bruce Catz wrote called The New Localism, and it was right after Trump got elected. Not to go there, but let's just say that I was kind of mortified by the by the the leadership of nothing else, the style and the and the you know, the thesis of that book really is
that cities have more power than they've ever had. And again, this is a very bloomberg thought as well, because of revolutions and technology and finance to improve the lives of their citizens. And look, what percent of the GDP in the world is produced in cities, The vast majority of innovation is produced in cities, and that we're at a time when democracy is under threat. I mean, it's this
is the time where cities need to shine. And so yeah, I was very taken by that, and it was a way for me to very frankly duck out of the partisan mess and focus on what was in front of me, which was making my city the best city it could be.
Sounds like you could take that on the campaign trail. What are your aspirations longer term?
You're two years in, right, Yes, I mean my aspirations are to make chat and you'll get the best city in America and then I'll worry about the rest of it.
And one of the parties close you up and says, hate Tim.
You know, I just can't see it, honestly, Carolina. I mean, look, I first have to get permission from my wife, which would be incredibly difficult. But I mean I would never say never. I would never say that, you know. But again, I've also learned not to take my off the ball, and I am one hundred percent focused on my city. That's what I love and so that's where my attention is.
Well, this is really fun. Thank you for always finding time to stop by and talk to us, because I agree that I think talking to our mayors tells us so much about what's really going on on the ground.
It's where it's at. I agree, and I appreciate the opportunity.
But you're still like New York Sushia here.
Love it. Jim Kelly be well, Thank you man, Safe travels.
Great to see you, Mayor of Chattanooga, Tennessee. Back here in our Bloomberg Interactive Brokers studio, you're listening and watching Bloomberg Business Week on radio on YouTube on Bloomberg Originals Carol Masser along with Madison Mills and this is Bloomberg