Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Fri, Jul 10 1992 Date: Fri, 10 Jul 92 05:13:31 EDT Message-ID: 07-10 0000 BONUS: Nashville's upturn is steady USA TODAY Update July 10-12, 1992 Source: USA TODAY:Gannett National Information Network If Nashville is what economic recovery looks like, the next few years are going to be real yawners. Conway Twitty, for instance, has to struggle to say just how the boom in country music has affected that industry's home city. Dressed at his office in a crisp orange T-shirt, white shorts, white baseball cap, white sneakers and white socks pulled to his knees, he notes that his concerts are selling better, Nashville recording studios are busier, record sales are jumping. WHAT DOES THE RECOVERY LOOK LIKE? Middle Tennessee, anchored by Nashville, is surging into full-fledged economic upturn well ahead of nearly everywhere else in the nation. But ask people in the region's big industries - music, medicine, automobiles, real estate - and they have the same trouble defining the surge as Twitty. The recovery has definitely arrived, they say, but it's kind of mushy and very low-key. HOW SLOW IS IT? Retail vacancies have inched down to 13.5% from 15% a year ago, while home sales are up 16% from last year. Jobs in the area grew 1% the first quarter. "We have overall slow and steady growth," says Anna Grimes of the Nashville Area Chamber of Commerce. "It's a mirror of what prognosticators are predicting for the rest of the country." IS NASHVILLE EXCITED BY THE UPTURN? "We went into the recession sooner, so we're coming out of it sooner," shrugs Ted Welch, a top real-estate developer. "We're back toward a normal path up now." Beneath the ho-hum surface, though, lurk a lot of numbers and anecdotal evidence that shows a regional economy gaining strength, slowly but surely. WHAT HAS REAL ESTATE BEEN LIKE IN NASHVILLE? Real estate has been one of Nashville's biggest sore spots. In the 1980s, office buildings sprouted like dandelions. "By '85, construction had spiked up three times higher than you'd expect in a bull real-estate market," Welch says. But that made for a glut. Vacancy rates hit a horrendous 25%. Cranes disappeared from the Nashville skyline. Contractors went under. "I don't believe there's been a speculative office building since I brought one on-stream in 1987," says Welch. HAVE THINGS GOTTEN BETTER? Now, though, a few cranes have appeared above the city. Office vacancies are down to 18.5% - still high but better. Office, retail and road construction are more active south of Nashville toward Franklin, the area's emerging suburban hub. "We had a serious downturn in construction," says Robert Margo, professor of economics at Vanderbilt University in Nashville. "That seems to have played itself out." HAVE HOME SALES IMPROVED? The scene had been as bleak for homes, too. Home sales and prices dove the past few years. Now, home sales are up 16% from the same period last year and home prices seem to have stopped skidding. In May, the median price was $88,522, up slightly from $87,700 last year. "We're seeing a major shift from what was a buyers market to a sellers market in some areas," says Shirley Zeitlin, whose Zeitlin & Co. is one of the area's bigger residential brokers. Real estate isn't rising only because supply dried up. WHAT IS THE UNEMPLOYMENT RATE LIKE? More people are working - in April, Nashville's unemployment rate dipped to 5.1%, vs. 7.2% for the nation. A number of area industries are creating jobs and bringing in money. Music is the most visible. Nashville has 170 recording studios, 1,500 music-publishing companies, offices for every major music label, CD- and cassette-duplicating plants and a community of singers, musicians and songwriters. The genre this year has snagged 12.5% of the $7.8 billion (annual revenue) recorded-music market, up from 9.5% in 1987. ARE OTHER INDUSTRIES ON THE RISE? Car manufacturing is having a major impact on middle Tennessee and Nashville. Saturn, in Spring Hill, about 45 minutes southwest of Nashville, has shifted into high gear the past year. Its cars, noted for high quality, are selling faster than the company expected when the plant opened in 1990. Monthly sales zoomed from 10,204 in January to 21,038 last month. Two shifts of production employees are working 50-hour weeks to keep up. IS THE AUTO INDUSTRY GOING TO HIRE MORE WORKERS? Saturn hasn't added many new employees to the 5,000 that have been on staff, but it may eventually have to add a third shift. "We're slightly behind, but that's a good problem to have," says spokesman Bill Betts. At the same time, the region's other auto plant is expanding. Nissan's facility in Smyrna, about 45 minutes southeast of Nashville, just finished a $490 million plant expansion and rolled its first Altima cars off the new assembly line. The plant added about 2,000 employees for the Altima line. Total Nissan employment in Smyrna: 6,000. HOW HAS THE HEALTH-CARE INDUSTRY BEEN DOING? The other big economic engine is a highly entrepreneurial health-care industry centered in Nashville. "That's a big reason the economy here never went through too deep a downturn," says Margo. "Nothing slows down health care in our country anymore." Nashville is home to Hospital Corp. of America, a privately owned medical monolith that runs 145 hospitals and will bring in about $5 billion in revenue this year. Around HCA and Nashville's several big, leading-edge hospitals, hundreds of companies such as MediClaim have sprung to life. WHAT IS MEDICLAIM LIKE? MediClaim is a highly speculative small venture that is building a system that would allow doctors and hospitals to electronically research and instantly file medical-insurance claims. In these times of cautious lending, such a firm would have a tough time borrowing from banks. But in Nashville's medical-oriented community, it has been able to find 12 private investors to get the company going. "I came to Nashville because I heard all the innovative health -care programs were coming out of here," says Richard White, the brains behind MediClaim's electronics. WHAT ARE NASHVILLE'S STRENGTHS? Nashville has many other strengths and weaknesses, of course. Its low cost of living, central location and fairly new infrastructure are helping attract business, such as a Lockheed mail-processing center that will add 1,380 jobs. Its sparkling new airport recently became an American Airlines hub. WHAT ARE NASHVILLE'S BAD POINTS? On the downside, Nashville suffers from a low-performing school system and an often-ragged downtown. Many locals complain that the region is losing country-music tourist business to Branson, Mo., a center for live country acts. Bonus Editor: Ed Kelleher. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM