May 5, 2009 City Council packet - Laserfiche WebLink

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Charlotte, North Carolina, offers an interesting case study. The financial crisis left one of the city's two big banks, Wachovia, ailing; this fall, Wachovia was acquired by San Francisco — based Wells Fargo, in a deal that will cost the city many thousands of jobs. But things could have been much worse; the deal also preserved manyjobs. What's more, at roughly the same time, Bank of America, Charlotte's other large bank (and the biggest bank in the U.S.) bought Merrill Lynch for pennies on the dollar. A business truism holds that when your competitors are retrenching, it's a great time to grow your market share. Deborah Strumsky, an economist at the University of North Carolina at Charlotte, told me she believes that in the end, both Charlotte's banking industry and Charlotte itself will emerge from the crisis all the stronger: "The Wells Fargo deal has saved thousands of jobs by keeping Wachovia afloat. More importantly, Bank of America has taken to the banking crisis like a shopaholic with a new credit card; it has been bargain -hunting and cutting some astonishing deals. Bank of America will come out the other side far better than in any fantasy it might have entertained previously." In recent years, Charlotte's leaders have made some smart decisions about how to attract businesses and professionals, enabling the city to grow into the nation's second-largest traditional banking center; in the lottery of business failure and consolidation, it was well positioned to win. But it was also Iucky, and last fall, it escaped losing, big-time, by no more than a hair's breadth. Overall, the roster of places that benefit from the failure of their champions' rivals will probably be pretty short, and the names on the roster somewhat unpredictable. Especially among cities built around declining industries, more places will be weakened than strengthened; as with all lotteries, most players will lose. Crrlus LN THE SAND: THE END of EksF EXPANsioN For a generation or more, no swath of the United States has grown more madly than the Sun Belt. Of course, the area we call the "Sun Belt" is vast, and the term is something of a catch- all: the cities and metropolitan areas within it have grown for disparate reasons. Los Angeles is a mecca for media and entertainment; San dose and Austin developed significant, innovative high-tech industries; Houston became a hub for energy production; Nashville developed a unique niche in low-cost music recording and production; Charlotte emerged as a center for cost-effective banking and low -end finance. But in the heady days of the housing bubble, some Sun Belt cities —Phoenix and Las Vegas are the best examples —developed economies centered largely on real estate and construction. With sunny weather and plenty of flat, empty land, they got caught in a classic 12