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Black Monday: Banktown goes down 

Putting too many eggs in the banking basket

It was one hell of a roulette run. As "our" banks gobbled up other institutions in a volatile industry, Charlotte emerged unscathed again and again.

Until last Monday.

To suggest, even as recently as a few months ago, that the city was putting too many eggs in the banking basket was to risk being treated like a mental defective, an unenlightened naysayer. All would be great, no matter what happened to the financial institutions in other communities, the train of thought went. There was no need to anticipate a changing future. No need to consider how the status of our schools, road congestion, our crime situation and tax rates would impact our ability to compete for business in a post-bank world. It was best, really, not to speak of those things lest we give Charlotte a bad reputation, the conventional wisdom went.

All the while we were building the city around a stay-put community banking model that died out sometime in the late 1980s. The local delusion level was so great that when CEO Robert Steel took over Wachovia in July, The Charlotte Observer editorial board wrote a column titled "You're a celebrity here, and you're expected to get involved." In it, the board lectured Steel about making sure he joined all the right committees and didn't forget the big annual check Wachovia owed to local arts and civic organizations.

Within a month, it was clear Steel had been brought in to put Wachovia on the block and was actively shopping the bank around. Now we see why.

Much of what I've written over the past decade about Charlotte was in anticipation of a day like last Monday.

Mecklenburg County Manager Harry Jones described himself as "shell-shocked" last week by the news that Wachovia would be dismembered and swallowed by Citigroup.

"It came with little or no warning," Mayor Pat McCrory told the Observer. Other local leaders had similar reactions.

"Charlotte is going to be tested like it's never been tested before," State Sen. Malcolm Graham told the Charlotte Business Journal.

They can't be serious. The only shocking part of this was the speed with which it happened. That it would happen within the next decade was inevitable. Our twin banking Goliaths got big by swallowing other institutions across the country while Charlotte-centric CEOs slashed thousands of jobs elsewhere. The banks had even largely stopped adding jobs here. Yet until July, when the powers that be finally launched the targeted business sector recruitment effort I've been begging them to start for years, our main growth focus was ... tourism.

Many cities go through something like this eventually, but in Charlotte, billions of dollars and millions of pounds of concrete have been poured in a bankward direction. We built the arena for the banks. The trolley and light rail exist to shuttle people back and forth to jobs at the banks or jobs that serve the banks.

As I write this, public officials are on the verge of another billion dollar Uptown spending bender. They want to blow over $400 million in property tax dollars on a street car (it will come in over $600 million with interest) and potentially upwards of $300 million on an Interstate 277 "cap" that includes a park, commercial and retail development. Then there's another $10 million that will now be needed to keep the Uptown AAA baseball dream alive. Oh, and tens of millions to redevelop Eastland Mall ...

On and on it goes. It would also cost county taxpayers hundreds of millions of dollars in property tax money to go forward with both planned light rail lines, as well as hundreds of millions more in sales tax money.

All of this would be paid for on the backs of struggling taxpayers whose homes were revalued by the county tax office near the height of the real estate boom and who would now struggle to sell those homes.

Meanwhile, as Bank of America digests Merrill Lynch, which it recently acquired, hungry former Merrill execs from New York are clearly eyeing Bank of America CEO Ken Lewis' job. He'll be forced to retire in four years, after which anything could happen. That is, if the bank makes it that long in its current form in the present environment. Meanwhile, as of deadline, Citigroup and Wells Fargo are headed to court to battle over a Wachovia acquisition that will be bad for Charlotte no matter which side wins.

Uptown in its present form will serve us well in our recruitment efforts. Now is the time to put the city checkbook down and step away from it. In fact, Charlotte's future depends on it.

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