Power steering: Wealth, leadership and the destiny of Nashville (part 4)

An excerpt from the multi-author book Nashville: An American Self-Portrait, edited by John Egerton and E. Thomas Wood

Email | Print By E. Thomas Wood

05-21-2001 12:00 PM — More than a few locals quietly remarked on the irony of the Carell Woodland Sculpture Trail's installation at more or less the same time large swaths of the city's former urban heart, Church Street, had been flattened for use as Central Parking spaces. By 2000, Carell's company and his family owned at least a dozen downtown lots and garages, with a total tax-appraised value approaching $10 million, and managed numerous other facilities in the city's center (though the antitrust settlement would require Central to divest several facilities). Nashvillians accustomed to cheap and easy downtown parking howled as prices shot up during the 1990s, many blaming Central Parking for squeezing up rates as it squeezed out competitors. Carell's personal reputation as a fearsome and demanding manager further cemented Central Parking's reputation for something less than model corporate citizenship.

It all may have been a bum rap. Central Parking didn't cause the department stores and other street-scale merchants of Church Street to wither and die; if any villain can be blamed with certainty for the decline, it's the car-loving, suburb-dwelling public. And Carell did not write the local ordinances giving property owners tax incentives to raze any building that is not producing a good stream of income—and no incentive to preserve beautiful or historic structures until a better use can be found for them. The sniping clearly rankled Carell. He said he became most vividly aware of the undercurrent of criticism at a meeting with Mayor Bill Purcell late in 2000. "I found out from the Mayor's office that some of the people who I thought were my friends were, in fact, claiming that I had, that the company had, some sort of monopoly that was adversely affecting the business community," Carell sighed. He blamed publicity from the recent antitrust case for kindling local sentiment against Central Parking. "We are being accused of things unjustly," he said.

Well, then: Were all the donations meant to put forth a kinder, gentler image of Carell in the local public eye? He was offended at the notion his detractors might take such a cynical view. "I can stand their criticism, but if they thought I did it for material purposes, that would be totally unjust. I'd fight over that one," he said. "I'm not going to buy anybody's support. I might give to the politician for that purpose" — Federal Election Commission records show that Carell family members gave at least $125,000 to candidates for federal office between 1992 and 2000, in roughly equal amounts to Democrats and Republicans alike—"but as far as the hospital or school or churches, absolutely not. What we do in that area is our responsibility. It's totally our choice, and we do it because we think we've been fortunate and we ought to share."

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It's not as though these were hard times—not for most Nashvillians, and certainly not for most of the commercial class. There were losers among the corporate winners, to be sure, but their sad fates could generally be explained away as unrepresentative of the overall economy. Service Merchandise Co., which had its roots in the now-extinct culture of small-town Jewish merchants in the South, and which grew to become one of the nation's major catalog and showroom retailers, was now in bankruptcy after years of fruitless attempts to adjust to the fickle tastes of shoppers. Pioneering restaurant chain Shoney's Inc., whose unpretentious offerings were a part of the fabric of life for a generation of diners in Nashville and beyond, had lost its footing. Every few months seemed to bring more bad news for Shoney's, continuing a downward financial spiral that had lasted for most of a decade.

Some of the more ambitious publicly held companies in town,especially in health care, were finding that the basic assumptions behind their business plans did not fully hold up to investor scrutiny. Would-be prison-management giant Corrections Corp. of America faced similar problems as investors lost faith in its mission. CCA and health care companies Phycor, American Healthcorp (now American Healthways) and ClinTrials Research, all based at Nashville's Burton Hills office park, had each been Wall Street darlings at moments in the 1990s. Money manager Jon Shayne, also located in Burton Hills, dubbed the office complex "High-P/E Plaza" in honor of these companies' lofty market valuations. By May 2000, Phycor had swooned from a high of $41 a share to 44 cents, while ClinTrials had dropped from $50 to $3, and the others had followed similar trajectories. The collective price/earnings ratio at Burton Hills had reached a level closer to market norms.

Still, the misfortunes of these and other local businesses, including much of the music industry, which was facing crises of confidence and cash flow after years of robust growth, could not dampen the overall euphoria of the Nashville marketplace.