Chattanooga finds itself on dubious list

The skyline of downtown Chattanooga bathes in mid-evening sunlight.

Chattanooga earned the dubious distinction this week of being named to the list of "20 Cities You Don't Want to Live In ... Yet," by CNBC's Cindy Perman.

The list includes a few cities like Detroit and Flint, Mich., which are well-known for their high crime and swaths of abandoned buildings. But the feature also points to towns such as Indianapolis and Baltimore, cities that Chattanooga planners successfully emulated to bring the Scenic City up to par, said Chattanooga Mayor Ron Littlefield.

"I've spent time in Flint and Detroit, and there's really no comparison," Littlefield said, though he's proud to stand shoulder to shoulder with Indianapolis.

Since 2003, Chattanooga has created more than 12,000 jobs and recruited 85 companies, activity that has continued through the recession, according to the Chattanooga Area Chamber of Commerce.

Detroit, on the other hand, saw 25 percent of its residents leave the city over the past decade, according to the 2010 census.

Unlike some cities on the list, "people are voting with their feet and moving into Chattanooga," Littlefield said. "It's one of the fastest growing in Tennessee."

But Chattanooga's 7.8 percent gain in population from 2000 to 2010 was nearly 2 percentage points below the U.S. growth pace of 9.7 percent.

While the population gain was below average in Chattanooga, the city's crime rate was more than double the national average even with a nearly one-third reduction over the past decade, according to city-data.com figures used by CNBC to compile its list.

Chattanooga's growth rate still was higher and its crime rate lower than Memphis - the only other Tennessee city on the CNBC list.

Chattanooga's more modest growth rate in the past could be an advantage, according to Chamber of Commerce spokesman J. Ed. Marston.

"Do you want to wait and move to a boomtown after everybody else figures out it's a boomtown?" he asked. "In my mind, Chattanooga is kind of an opportunity to get in on the ground floor. Smart investors don't wait until everybody else has jacked up the price."

The cost of living remains low in Chattanooga, the Chamber says, while job opportunities continue to expand from new arrivals Volkswagen and Amazon.

Meanwhile, old-line businesses like Alstom and Wacker continue to upgrade their operations and take on hundreds of highly skilled employees.

CNBC attributed Chattanooga's presence on the list to a 7 percent drop in its economic output - measured by GDP - from 2008 to the end of 2009. CNBC also noted that Chattanooga "has a high crime rate."

However, according to the U.S. Bureau of Economic Analysis, GDP fell in 80 percent of U.S. metro areas during the recession, and cities often have higher crime rates than rural areas.

"The recession hit the United States pretty hard, so seeing that GDP drop, I don't know what that means." said Chris Daley, director of technology development and transfer at the Enterprise Center. "That was a couple of years ago. Now, we're creating jobs and building a brand."

Linda Bennett, executive director of Choose Chattanooga, said the city's crime rate is a concern, as it is for any city.

"There's always another challenge, but we have so much to be proud of," Bennett said.

Businessman Emerson Russell, who runs a facilities management empire from his Chattanooga headquarters, said there's no place he'd rather be than Chattanooga.

"I work in 38 different states around the country, and to me, Chattanooga is one of the best areas that I know to live in and work in," Russell said. "I could find at least 100 more cities that are a whole lot worse."

For developer Dale Mabee, the reason he loves Chattanooga is because of the opportunities that allow residents to live, work and play, grow up and grow old, all within the city limits.

"It gives me a chance to keep my children and grandchildren here locally," he said.