In 1996, the business capital of the New South will bask in the Olympic spotlight. But will the injection of capital provided by the games defuse the city’s subtle racial tensions or rehabilitate battered downtown neighborhoods?
April 1 1992 by Peter Lacey
Last September, Atlanta was galvanized by the unlikely news that it had been chosen over Athens, Belgrade, Melbourne, Manchester, and Toronto as the site of the 1996 Olympic Games. For 16 days beginning July 20th, 1996, 700,000 visitors and three billion television viewers will take in Atlanta‘s charms, reveling in the modern Olympics’ centennial celebration. The city, Georgia‘s capital and the business hub of the New South; will soak up $3.5 billion in fresh capital, gain 85,000 new jobs, and be transformed into an international metropolis.
The man largely responsible for bringing the event to Atlanta is William Porter “Billy” Payne, a once obscure real estate attorney who is now the acclaimed chairman of the Atlanta Committee for the Olympic Games. Just as Peter V. Ueberroth led Los Angeles‘ 1984 Olympics to triumph and profits, Payne hopes to do the same for Atlanta‘s Olympics.
He might just achieve that goal, for he has almost the whole city behind him. In fact, the main supporters of Billy Payne’s Olympic effort comprise virtually the entire Atlanta business and political power structure. The inner relationships of that power structure are the key not only to Atlanta‘s Olympic bid triumph, but to the success of the city itself.
With a metropolitan population of almost three million, Atlanta is indeed a success. The city has more Fortune 1000 headquarters (22) than any city south of Washington and east of the Mississippi. It also boasts the largest foreign business community, and is home to more Japanese businesses than any American city except Los Angeles.
But despite this rosy glow, the recession is pounding Atlanta, much the same as it is other U.S. cities. Particularly hard hit have been the inner-city neighborhoods. An estimated 10,000 jobs slipped away when Eastern Airlines folded early in 1990. In another measure of tough times, when Holiday Inns moved its headquarters to metropolitan Atlanta during the summer, the company was swamped with more than 31,000 calls for 400 available positions.
But if unemployment is on the rise, so are the profits of many of Atlanta‘s leading companies. For example, Coca-Cola posted net income of $1.62 billion in 1991, up 17 percent from the year before. Notable among the leaders of these companies are such national figures and local powers as Coke’s Roberto C. Goizueta, Delta Airlines’ Ronald W. Allen, Georgia-Pacific’s T. Marshall Hahn Jr., BellSouth’s John L. Clendenin, NationsBank’s Bennett A. Brown, and Southern Co.‘s Edward L. Addison. And, yes, another local presence of sorts is Robert Edward “Ted” Turner of Turner Broadcasting System. By most accounts, Turner is a national figure estranged from the Atlanta power loop. Says one observer: “We really don’t consider him to be an Atlanta CEO-he’s a novelty.” Turner’s Goodwill Games are even seen as ersatz competition for the Olympics. Nevertheless, with revenues approaching $1.5 billion, the high-flying businessman’s companies help to drive the city’s economy.
Though no longer booming as it did in the 1980s, Atlanta‘s economy remains for the most part competitive. The city’s banks are generally strong. And while Atlanta‘s salaries approach the national average, the cost of housing is low. Despite some typical inner-city problems, Atlanta is usually perceived, especially in the South, as a fine place to live and work.
“Executives love to come here because we are the ultimate suburban dream,” says a local journalist. “They come here for the sameness. There’s nothing old about Atlanta, nothing like Philadelphia‘s Main Line. People from small towns in the South join northern corporate types to live in new houses in new suburbs.”
Geographically, though Atlanta‘s growth and prosperity have followed a northerly route, moving away from the old downtown center of Five Points, there is still a significant corporate presence around the heart of the city. It was in one of the tall buildings overlooking Five Points and Woodruff Park that Billy Payne convinced James B. Williams, then COO and heir apparent at SunTrust Banks, that the city’s Olympic bid had a chance to succeed. Noted Georgia Trend magazine, “Once SunTrust signed up, Payne found the going much easier at other Atlanta corporations.” It got easier because affable, soft-spoken Williams, the son of two schoolteachers from Tennessee, is a key member of the Atlanta business establishment.
Now chairman and CEO at $34.6 billion-asset SunTrust, Williams heads Atlanta‘s most respected bank-although the city’s biggest bank is NationsBank, the product of merged C&S/Sovran and NCNB. Williams also sits on the boards of Coca-Cola, Georgia-Pacific, and Genuine Parts. The latter, which chalked up 1991 revenues of $3.4 billion, is one of Atlanta‘s quiet giants.
But make no mistake: Coca-Cola’s Roberto C. Goizueta (“Never call him Bob,” warns a PR man) is the undisputed ruler of Atlanta‘s CEOs. Coke is certainly the town’s most envied, most popular commercial entity. By one account, the company gets 40,000 unsolicited resumes a year.
Goizueta embodies that prestige. Anointed by his predecessor, Coke’s legendary CEO Robert W. Woodruff, Goizueta has an aura of hereditary rulership about him that his aristocratic Cuban background and Yale education do nothing to dispel. “Roberto Goizueta,” says a well-placed Atlantan, “is the `godfather’ of Atlanta. If he were to command, everyone would obey. If he were to call a meeting, no one would miss it.”
In order to avoid conflict with Coca-Cola divisions abroad that were supporting other contending cities, the company did not directly support Billy Payne’s Olympic bid-although Brian G. Dyson’s Coca-Cola Enterprises did contribute to Payne’s initial campaign. But a second line of support formed easily because of Payne’s connections to Atlanta‘s power structure, including Robert M. Holder, Jr., CEO of Holder Corp.
Holder helped to forge modern Atlanta‘s commercial success and its reputation as the South’s most progressive city. When Maynard Jackson, Atlanta‘s mayor, was elected in 1973, he quickly instituted a requirement that minority contractors be involved in all city government construction projects. But Bob Holder’s group had long before subcontracted to one such firm: H.J. Russell & Co.
By 1990, H.J. Russell had become one of the top ten black-owned businesses in America, with revenues of $145 million. Herman Russell, a friend of Maynard Jackson and former mayor Andrew Young, is now one of the most influential leaders both in Atlanta‘s black community and the city at large. Thus, with Bob Holder as chairman of the Atlanta Organizing Committee Advisory Council, Billy Payne had an important connection to the black power structure.
Andrew Young-who succeeded Jackson as mayor for two terms and then, in turn, was succeeded by Jackson-was also an important supporter of the Olympic effort. Like Holder and Russell, Young is now a member of the Olympic advisory committee. The former mayor, who has designs on Georgia‘s governorship, is more closely connected to the city’s business establishment than Jackson. Says an Atlantan who knows both men: “Maynard Jackson challenged the business community to have some minority representation in contracts and on boards. He’s still challenging them.
“Jackson was basically changing the power structure of the city away from a solely business power structure,” the observer continues. “In the 1970s, he was more oriented toward grass-roots, neighborhood participation. This time around he’s much more greedy. They say he’s learned the Chicago way of doing business, the whole Harold Washington philosophy: ‘I give you, you give me.”‘
No Atlanta CEO would dream of saying that for publication, jeopardizing the fragile-but crucial-links between the black and white communities.
“Atlanta and the South have a different way of doing business than any other part of the country,” says Atlanta Journal business columnist Maria Saporta. “Manners are very important. You don’t dress anybody down, in public or in private. You do things quietly and with respect.
“Southerners have the sweetest way of telling you to get lost. But if you’re a Southerner yourself, you know what they’re saying. Some people may think that’s hypocritical, but it’s also a way of not letting business spoil manners.”
Meanwhile, the most influential business group is Central Atlanta Progress, or CAP, whose full time president, until recently, was Joseph G. Martin. Joe Martin’s mentor is said to be Lawrence L. Gellerstedt Jr., chairman of Beers Inc., Atlanta’s largest construction company. To round out the inner circle, Beers worked with Herman Russell to build the Carter Presidential Center on the Emory University campus.
Without exception, business leaders hope to share in the financial bonanza that will accompany the Olympic Games. But the black residents of downtown and midtown Atlanta also want a piece of the action, especially those in the Summerhill and Techwood Homes neighborhoods. Their situation concerns Atlanta, if only because the city’s neglected areas could be a source of international shame when the Olympic spotlight shines in 1996.
The main Olympic stadium will be in Summerhill, and Olympic athletes will be housed in a new village on the Georgia Tech campus. The school adjoins both Coca-Cola headquarters and the Tech-wood Homes, the oldest, if not the happiest, U.S. housing project.
These days, as a recent article in the Atlanta Journal and Constitution noted: “Downtown’s declining importance is due to shifting demographics, a pervasive fear of crime, racism and a rejection of urban life.” Those factors have brought more than 80 percent of metropolitan Atlanta’s job growth to northern parts of the city or its suburbs, areas like Buckhead, Sandy Springs and Chamblee. “Thousands of people new to Atlanta have never been downtown,” the article continued.
“To many of them, especially white suburbanites, downtown looks unfamiliar.”
Attempts to revive downtown and the area just north of it have included the building of Underground Atlanta (an attractive complex of shops and restaurants on the site of the original city center), various sports and convention complexes and the new One Peachtree Center, designed by the famed Atlanta architect and builder John Portman. But the recent abandonment of the historic Rich’s downtown department store only emphasized the area’s overall decline.
So, as the 1996 Olympics approach, lines are being drawn and positions taken about whether and how the Olympic construction program will permanently benefit Atlanta’s downtown and central areas. City Hall, the Olympic Committee, and various neighborhood organizations are all involved in the maneuevering, as is the business community and its leading CEOs.
Significantly, influential Joe Martin resigned from CAP in order to devote himself full-time to inner city problems-at the request of Mayor Jackson and with the reported blessings of CAP’s power brokers. Martin, also the builder of Underground Atlanta, will seek to act as a mediator between neighborhood groups and City Hall on one side, and Billy Payne’s ACOG and developers on the other. Ken Anderberg, editor of Business Atlanta magazine, maintains Martin “will have to soothe the neighborhood activists who fear for the future of their homes, while holding at bay those people who would simply level those neighborhoods.”
The outcome of these particular games likely will determine Atlanta’s future.