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The Future of the Mid-Sized American City: An Interview with Tim Kelly (Part 1)

Tim Kelly currently serves as the 74th Mayor of Chattanooga, Tennessee. He was elected in 2021 as an independent and is in the first year of his 4-year term. After graduating from Columbia University as a John Jay Scholar, Kelly returned to Chattanooga to run his family’s auto dealership. He subsequently earned his MBA from Emory University, entered the startup scene with his apps Zipflip and SocialBot, and helped found the Chattanooga FC soccer team. In addition to his business ventures, Mayor Kelly has served on the boards of many local and philanthropic organizations, including the Chattanooga Chamber of Commerce, The Benwood Foundation, and Chattanooga 2.0.

James Hardy: As an entrepreneur-turned-mayor involved in many non-profits, you seem to have a unique perspective on the cooperation of public and private sectors. Have you always been interested in this intersection? How has that view developed?

Tim Kelly: It definitely is something I was always interested in, even probably at a subconscious or unconscious level. I think, in retrospect, it probably had a lot to do with growing up in Chattanooga. Chattanooga has always had a strong sense of place and a strong civic culture. Both my parents did a lot of community volunteering, and there wasn’t this sharp line between the private sector and the non­profit sector. If you had a position of influence and you had the spare time, it was almost just written that you gave back, volunteered in some capacity. My mother was particularly avid, but my dad was, too: He was on the board of the housing authority, and that’s just kind of what you did. I am definitely a localist, I think it’s fair to hang that label on me, and I think it’s kind of an old thing that is now new again. I read a book by Bruce Katz—The New Localism—a while back, and it really had a lot to do with inspiring me to run for mayor. The thesis is that cities, particularly mid-­sized cities, have this opportunity to kind of weave together the public, the private, and the philanthropic non-profit sector to achieve a lot more than any one of them could achieve by itself.

JH: Many national narratives paint Chattanooga’s investment in municipal broadband as the primary actor in Chattanooga’s revitalization, but the process has been much broader in scope. What other aspects of this redevelopment do you think are going to be adopted by others?

TK: Municipal fiber is really a competitive advantage for Chattanooga at the moment. So selfishly, I sort of hope that other cities kind of twist in the wind a while longer, we can enjoy it as a relatively unique advantage. Another book that had a big impact on me was The New Geography of Jobs, by a guy named Enrico Moretti. The thesis of that book is basically that the nature of work has become more intellectual and creative in nature, and that is given to an aggregation in larger markets like Atlanta and Nashville. And here we are in Chattanooga, pinched in between two of them. So if mid-sized cities like Chattanooga don’t really get dead serious and super intentional about being competitive and leveraging their strengths, then we risk this hollowing out of the major markets and everybody else. And candidly, I think this is part of the political problem that we face in America today. I think that part of the reason for the rise of Trump­ism and the general alienation of what is pejoratively referred to as flyover country is because the places like Chattanooga have been rendered irrelevant, and the people in them are sort of being slowly boiled. I don’t think a lot of them even realize why they’re so unhappy, but it’s a general alienation, and again, that’s where things like the strategic advantage of having a municipal fiber network—which is maybe is impossible in a larger city—is kind of our way to fight back and remain relevant.

JH: Would you say municipal fiber right now is a centerpiece of Chattanooga’s pitch to businesses and the new work-from-home contingent? 

TK: Yes, there’s no question about it. We did a survey right when I got into office. We knew anecdotally that a lot of people had moved in here over the course of the pandemic, and again, anecdotally, you hear stories about why that is. We did a survey of folks who had moved in from zip codes further than 50 miles away and who were new electric signups through EPB, [Chattanooga’s electricity and broadband provider], and sure enough, many were people who have moved here to work from home, who cited EPB’s fiber as one of the reasons they relocated.

JH: Is that contingent as large as you speculated it would be earlier in the pandemic?

TK: Well, yeah. the number of people I think we can infer that moved here over that period was 10,000. And we only had probably 300 responses, so not a great response rate. But just anecdotally, half appeared to be work-from-home. A lot more retirees than I expected too, though. So quality of life, broadly speaking, appears to be kind of the common denominator. A lot of people really, really enjoy Chattanooga’s outdoor assets, which is the other thing that I consider to be an important structural competitive advantage for Chattanooga. But clearly, quite a few of the people are work-from-home people who are here and have remained here. Chattanooga has a strange way of getting its hooks in you. [There’s] a lot of anxiety in New York about, “God, are we losing these people never to see them again?” I think some will return to the big city, but I think Chattanooga is going to hang on to most of the relocating residents because it is a great place to live.

JH: On the business side, in the past decade with Mayor Andy Berke, there was a lot of focus on the tech start-up scene. You mentioned skilled work being such a big focus, and also the “left behind”-ness of many areas in the new economy of skilled and creative labor. So going forward, will the focus of the business pitch and EPB be tech jobs in Chattanooga? If so, how do you work toward that?

TK: It has to be a broad spectrum of offerings. But that’s certainly one of the goals. We’re really proud of the fact that, thanks to the policies at the state level, Tennessee—and I want to say New York, maybe Minnesota—is one of maybe three states in the country where Google Coursera offers these great courses to teach people project management and UX/UI design. And they are free. We have this program called Skill-­Up, through our local community college, Chattanooga State. Today, I went to the first graduation of a cohort of folks who, when they came into it, didn’t even have GEDs, and will come out the other side with the ability to make 40, 50 grand a year. If you look at the history of structural racism, particularly in the South, economic inequity starts with educational inequity, which leads to other negative externalities like health inequity and these gaps in public health that we have. But it starts with education, both what we think of as traditional education and workforce development. So our focus is there, on where we can teach people to skill up and just skip the whole traditional school system. But it also has to do with putting a much larger focus on early childhood education, and then stuff like building a workforce development center where we’re going back to teach people trades, skills, and additional routes to a good middle class living that we have kind of forsworn with the well-intentioned but mistaken strategy of trying to get everybody to go to a 4-year liberal arts college. Most coders scoff at the idea of a 4-year degree. And again, the nature of work is fundamentally changing. So our strategy will be to meet the market and to try to train the workforce as broadly as possible with as many tools as possible, rather than trying to funnel everybody through a traditional system. 

JH: Regarding the search for outside investment, you’ve said that Chattanooga doesn’t need to take just any opportunity anymore, and that it deserves to pick only the “right companies.” What are the right companies for Chattanooga’s future? How do you bring them in?

TK: Personally, I think our economic future really lies at the intersection of the notion, broadly, of sustainability and Chattanooga’s built infrastructure of green spaces and the industry of sustainability. I think we’re crossing the Rubicon of the tipping point towards electrification, and with Oak Ridge National Labs up the road, Huntsville down the road, and a TVA between Knoxville and Chattanooga. We really have an opportunity with the University of Tennessee at Chattanooga here to build some resources and attract businesses, specifically around battery technology, quantum computing, and basically the future of energy. So that’s where we’re focused. We just attracted Novonix, which is a large company that’s going to start making synthetic graphite, which is a key anode component of batteries. It’s been said that the search for a longer-lasting, cheaper battery is really kind of the Manhattan Project of our time, and Novonix makes this key component, which arguably is one of, if not the breakthroughs that will allow us to get there, and so they just announced a rather large plant down here on the river. With VW beginning production of the ID4 here next year on a scale like Tesla’s, I think we have a very bright economic future in that general area. 

JH: How did that vision of the future form? How could other cities emulate that?

TK: Well, again, probably not surprising, me being kind of a business guy, I got my MBA late in life. In strategy they talk incessantly about identifying and carving away the extraneous crap, and to arrive at, “What is your truly sustainable competitive advantage? What do you do better than anybody else does?” And I think for mid-sized cities, it’s a critically important question, because you can’t be all things to all people, and good brands have edges, so figure out what yours is. It’s kind of a dovetail to Richard Porter’s Cluster Theory, too. I think most mid-sized cities have got to answer that question: Who are you trying to attract and for what reason? And really put all your eggs in that basket and focus there, because we’ve realized we’re not going to out-Atlanta Atlanta, not that we want to. Or even out-Nashville Nashville. So I think that is the key question, figuring out what you want to be when you grow up as a city. 

JH: You mentioned earlier how the hollowing out of mid-sized cities plays a major role in the political polarization we’re experiencing. Do you think that it would help reverse our course if a city like Chattanooga were to succeed more and other cities follow suit?

TK: Yeah, I hope so. That’s basically been my whole sort of anti-political political thesis and why I got so energized when I read this book [The New Localism]—that localism, broadly speaking, is the antidote to the toxic populism that has kind of driven us apart. If you think about it, the state and the federal level are really these abstractions, they’re just catchments to pull in tax dollars and then redistribute them, they don’t really do anything except set frameworks. We live in cities, and cities are where the vast majority of tax revenue, innovation, and all the things that make life worth living happen. Not that rural areas aren’t important—we’ve all got a part to play and the state and the federal government have plenty of parts to play—but you can argue convincingly that we have the whole thing inverted, right? Everybody’s (largely because of paid media) so focused on what’s happening at the federal level and less so at the state level. But they pay next to no attention, based on election turnouts, to the local level. But if we can get people focused on a local level and get them to turn to the left and the right and realize the importance of getting garbage picked up on time, good schools, good roads, good jobs, good parks, public safety, those things are fundamentally local issues, and they’re fundamentally non­partisan issues. They’re not red or blue. So yeah, I think if we can get that light bulb to turn on across the country, and I think mid-sized cities are the best place to do it, I think it has the potential, almost like a Zen koan, to sort of interrupt this false narrative of division of Democrat versus Republican and make them realize that that’s all this very Orwellian dichotomy that keeps us all distracted from the stuff that really matters.

JH: How would you say cities should go about increasing that involvement? How do you get people really involved in city government? 

TK: Well, again, I think it has to do with setting aside partisanship. I come at this from a retail background having grown up in the car business and it sounds kind of glib and ridiculous, but I really do look at taxpayers as customers. I usually wind up telling this to a traditionally Democratic audience who tend to believe more in the power of government. What I tell them all the time is: “Look, the problem with the political narrative today in many senses is the problem with the Democratic Party.” And I can say this cause I’m a full­-blown non­partisan; [the problem] is that if you want people to trust government to do more, you have to be able to do the basic shit right, right? That’s where it seems kind of a tortured analogy, but a very pedestrian strategy to get elected is by filling potholes. But what I’ve found is that it resonates with people because it’s kind of like the hierarchy of needs, right? You’ve got to fill in that first layer of competency. And if you can, then people trust the government to do higher order things. Responsive and efficient government is not a Republican thing. It’s not a Democratic thing. It’s why people pay taxes. And if you’re a conscientious politician, that’s what you should be there for, right? And once you are able to do those simple things right, what I’ve found already just six months in office, is people will trust you with higher order, more ambitious social agendas. But you have to be able to do the basic things right to earn the right to do those other things.

*This interview has been edited for length and clarity.