Chattanooga mayoral candidates tout business successes, but what does the record show?

With either choice, Chattanooga voters next week will elect as their next mayor a veteran business manager with no prior experience in elective political office.

The two finalists competing in Tuesday's runoff election to succeed Andy Berke as Chattanooga mayor - Tim Kelly and Kim White - both claim business successes. But what do their business records show?

Kim White

Staff photo by C.B. Schmelter / Mayoral candidate Kim White poses in Patton Chapel on the campus of the University of Tennessee at Chattanooga on Tuesday, March 30, 2021 in Chattanooga, Tenn.

White, 60, says she has been a salesperson throughout her career, from her first job working at a clothing store to help pay her way through college at the University of Tennessee at Chattanooga through her later work in managing sales and operations for major telephone, real estate and downtown development companies, both in the private and nonprofit sector.

"I try to listen and learn from other people, and I think I've learned a lot about managing people, developing strategy and meeting budgets while working in the private sector and for a major nonprofit," White said. "I've also always tried to follow my gut and try to find jobs I am passionate about."

After 16 years in sales management jobs at Alltel as one of the first two female vice presidents for the national wireless carrier, White said she was eager to settle down in her hometown.

She talked with a variety of community leaders, including Chattanooga's then-mayor, Bob Corker, about a variety of jobs. By 2014, Corker decided to hire White - not for any job at City Hall but to help run his own commercial real estate business - one of Chattanooga's biggest real estate leasing operations which Corker had put in a blind trust while he was mayor.

Corker sold the business to Chattanooga businessman Henry Luken in January 2006, and White stayed with Luken Holdings for three years before the board of the nonprofit downtown development firm River City Co., which White was then serving on, hired her to become president and CEO in 2009.

During her 11 years at its helm - the longest of any of the six presidents of the agency since its start in 1986 - more than $1.2 billion of new investments were made or announced for the downtown area and more than 3,100 additional apartment units and condominiums were announced or started in and around the central city. Additionally, hundreds of hotel rooms and housing units for students at the University of Tennessee at Chattanooga were also built in downtown.

"We really worked to make downtown a great place to live, work and play and to better integrate UTC into our vibrant downtown," White said of her River City experience.

Chattanooga's success lured many other community leaders to the Scenic City.

"One year we met with over 40 groups to tell them about River City and how Chattanooga's downtown was redeveloped," White recalled.

But the pace of downtown growth has slowed in recent years, especially during the pandemic, and several storefronts and apartment units are now empty. To help promote, clean up and enliven downtown, White worked to facilitate the creation of a downtown business improvement district similar to those in Tennessee's other major cities.

While a majority of the landlords downtown backed the measure and ultimately led to the new business improvement district or BID, some merchants and other tenants feel like they were left out of the planning process for the new district, now known as the Downtown Alliance.

Keeli Crewe, co-owner of the Area 61 gallery, is among 16 female business owners and managers who said they are backing Kelly as a result.

"Business tenants had no voice in the process even though annual assessments self-imposed by property owners [totaling $1 million a year through 2029]," she said. "Only property owners were invited to planning meetings We're incensed by Ms. White's leadership that put female-owned and small businesses at risk."

Other downtown merchants with shops along Patten Parkway have complained that the $4.9 million renovation of the historic parkway hurt their business during construction while panhandling and trash problems downtown continue.

White insists that the Downtown Alliance, which is separate from River City, was backed by most people downtown and should ultimately help enhance services in the central city.

"There will always be naysayers when you are trying to make progress," White said, recalling the critics who ridiculed and questioned the Tennessee Aquarium and riverfront development 30 years ago.

Kelly, who has served on the River City board, also supported the concept of having a business improvement district downtown. But Kelly says the development of the BID, which the Chattanooga City Council ultimately approved, should have been more inclusive and transparent.

White said she is passionate about helping her hometown to grow and thrive coming out of the pandemic. She believes her business and River City experience can help her as mayor to sell Chattanooga, help small businesses, create affordable housing and listen and involve diverse voices to address community needs.

"I think I'm a problem solver and try to be a positive person for getting things done," she said.

Tim Kelly

Photo of Tim Kelly

Kelly, 54, is the son and grandson of automobile dealers in Chattanooga and he has spent most of his professional career selling cars and trucks for such brands as Cadillac, GMC, Subaru, and Mitsubishi.

But Kelly says he was "never a car guy" or a gearhead like many in his industry and his interests and views sometimes differed from his father, a Georgia Tech-trained engineer. The younger Kelly went to New York City in the 1980s to study comparative literature and German at Columbia University.

"I learned a lot from my father coming back to the family business," Kelly said. "But I like a challenge and I have a core entrepreneurial drive that is always looking for opportunity."

As a result, Kelly has helped add or launch at least a half dozen business ventures in the car business and other fields. Kelly also has used his experience and an MBA he later earned at Emory University's Goizueta Business School to teach entrepreneurship at the University of Tennessee at Chattanooga.

Kelly said he enjoyed the people side of his dealership business more than the cars he sold.

"You have customers in every business, and I like dealing with customers and figuring out how to meet their needs," he said. "When I figured that out, lateral moves to other industries were easier."

Kelly helped start social media and technology businesses to help customers with such ventures as Zipflip, Carclips and SocialBot, but his diverse interests also led him to help launch Chattanooga Brewing Co. and the Chattanooga Football Club - a soccer team that helped to fill Finley Stadium and create new soccer leagues and enthusiasm in the city.

Kelly also saw opportunities in the car business that his father and grandfather, who were more focused on GM and domestic models, didn't see early on. When the younger Kelly brought the first Subaru dealership to Southeast Tennessee in 1988, he said only a dozen cars were sold in a typical month. But the dealership boosted annual sales over the next couple of decades to nearly 1,000 vehicles a year and managed the dealership through the COVID-19 pandemic last year to ultimately be valued more than it was prior to the pandemic.

Kelly sold the Mitsibishi dealership in 2015 to Joe Kirby and sold his Subaru dealership at the end of 2020 to Crown Automotive, although Kelly continues to own the Riverfront Parkway dealership lot and building.

"It was bittersweet, but the industry is changing and so am I," Kelly said after he sold the last of the car dealership businesses his family had been in for more than eight decades. "I'm ready to move on to the next chapter of my career."

Kelly is not out of the transportation business, however. Nearly two decades ago, Kelly perceived an opportunity to bring a new one-price approach to selling more personal transportation at a Honda motorcycle dealership. Although Kelly says his father was initially skeptical, the younger Kelly took a chance and bought Jam Ups Cycle Service in 2002 and added Griffin Honda in late 2003.

"With a vision and some elbow grease, it turned into a rapidly growing business," Kelly said.

Southern Honda Motor Sports is now the largest Honda motorcyle dealership in the country with $35 million in sales last year from the sale of more than 3,000 units, even during the pandemic.

But the growth of Kelly's motorcycle business has not been without controversy. A former manager at the Honda dealership, Ernest "Pug" Vickers, alleged a decade ago that the business was not checking and honoring all of the required recall notices.

Kelly disputes what he says were "exaggerated accusations" from a "disgrunted employee." But in 2013 Kelly's Southern Honda Powersports was fined $125,000 by the National Highway Traffic Safety Administration (NHTSA). Federal regulators said Southern Honda Powersports had not inspected or repaired 329 motorcycles sold between 2007 and 2012. The company admitted no wrongdoing in the settlement and NHTSA said it was unaware of any injuries or death involving those vehicles.

The Honda motorcycle dealership is now Kelly's biggest remaining business, but it won't be in the city of Chattanooga much longer. After 17 years on Workman Street where Southern Honda Motorsports operates out of a 100,000-square-foot facility, Kelly is moving the business to a site near I-75 in East Ridge.

In doing so, Kelly and the city of East Ridge will be able to take advantage of the Border Tax Zone established by the Tennessee Legislature to help border towns like East Ridge. A portion of the property taxes on the new 73,000-square-foot facility being built for the Honda dealership by Kelly can be plowed back into the project.

Kelly says he decided to relocate the business before he decided to run for Chattanooga mayor and he says he had to do "what's right for the business." The new location on Ringgold Road not far from Interstate-75 will make it easier for customers than the current Workman Road site in Chattanooga, Kelly said.

"It should allow us to have a much more retail-friendly location," he said.

Kelly said he expects to be able to sell or redevelop the Workman Road site, which he said is in an area of town that needs new investment.

"If I do get elected mayor, one of my priorities is to develop neglected neighborhoods like that one," he said.

Kelly said if he becomes mayor, he will put his business interests in a blind trust to help avoid any conflicts of interest.

"As I continue to move toward a chapter of public service, one of the most valuable lessons I've learned is applying business principles that promote accountability, commitment to excellence and integrity in every transaction," he said.

Kelly said his dealerships have generated more than $36 million in state and local sales taxes over the last 20 years and the business donated over $1 million to local charities. Prior to selling the business, Kelly Subaru was honored with the "Torch Award" for ethical business practices by the Better Business Bureau of Chattanooga.

"I'm proud that across all of my businesses, we've had a strong record of creating hundreds of job in Chattanooga and elevating a diverse range of employees - including many women and people of color, which is frankly unusual in this business sector," Kelly said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.