But for Kingsport, 2008 was a record year for new investment and double-digit increases in sales tax collections.
“In this economy, Kingsport looks really good relative to the rest of the country,” said Jeff Fleming, assistant city manager for development. “In this kind of economy, people wonder how we do it.”
Since 2006, Kingsport has posted $370 million in new construction, including retail and commercial office buildings. The city has posted record investment for two consecutive years — $164.5 million in 2007 and $180.9 million in 2008.
New retail centers make up a lot of that investment.
Kingsport Pavilion — the city’s newest retail destination with stores such as Target, Kohl’s, Old Navy and Dick’s Sporting Goods — now generates $96 million in retail sales.
East Stone Commons — a shopping center featuring stores such as Hobby Lobby, Ross, T.J. Maxx, Pier One and PetSmart — generates $50 million a year in sales.
New shops and restaurants are also being constructed at the new Reedy Creek Terrace along Eastman Road.
Downtown Kingsport has posted record reinvestment for loft and restaurant development.
And the Kingsport Town Center, formerly the Fort Henry Mall, is preparing to undergo a $35 million facelift beginning next year.
Kingsport’s new shopping opportunities have helped boost the city’s sales tax collections. Those collections are up 11 percent year to date.
Meanwhile, Kingsport and Sullivan County have the fourth-lowest unemployment rate in the state. In October — for which the latest statistics are available — the unemployment rate for the metro Kingsport area was 5.7 percent, down from 5.9 percent in September.
“While we are absolutely not immune to the national economic climate, we have been very steady and predicable year in and year out. We haven’t gone up in unemployment rates drastically, and we haven’t gone down in unemployment rates drastically,” Fleming said.
Kingsport’s industrial base is holding steady despite tough economic times. Most recently, Domtar announced it would expand operations at its Ridgefields converting plant and add 15 to 20 new jobs next year.
Eastman Chemical Co. announced it would cut $100 million in expenses next year to avoid companywide layoffs. Eastman is still moving forward with a $1.3 billion plan called Project Reinvest to upgrade its Kingsport facilities and expand production here.
Miles Burdine, chief executive officer of the Kingsport Chamber of Commerce, said the city’s economy is dependent on Eastman, which employs about 7,000 people here. And what Eastman is doing to remain competitive in a national recession just makes good business sense, he said.
“Their peers and competitors are doing things such as laying off hundreds of thousands of people. But Eastman has chosen to take some logical steps to keep from having those sorts of cutbacks,” Burdine said.
He said that by keeping its core work force intact, Eastman will be better prepared to handle the increase in business when the recession ultimately ends.
Kingsport’s medical community also made strides in 2008. Holston Valley Medical Center continued work on its $100 million expansion, and Holston Medical Group recently completed its $40 million medical office complex on Stone Drive.
And the MeadowView Conference Resort and Convention Center announced an expansion this year. Eastman, which owns the hotel side of MeadowView, will invest $15 million to add two 55-room towers, bringing the total number of rooms to 305.
The city, which owns the conference center side of MeadowView, is adding a new executive conference center at the site.
Burdine said MeadowView was a risky investment when it was built more than a decade ago. Today, the facility generates tourism revenue and tax dollars for the city, and it’s helped spur new investment construction in that part of town.
“The payback has meant so much to Kingsport,” Burdine said. “The expansion of MeadowView and the addition of the executive conference center is such a smart move.”
Fleming said Kingsport’s strong economy is due in part to its people.
“We are naturally a very conservative lot. We don’t historically go out and get lots of loans and overstretch our credit. We live within our means. We actually have a goal of paying off our house one day, whereas many people across the country, that never crosses their minds,” Fleming said.
“The whole situation is a strong reflection of the character of our people. It is beginning to differentiate us from the rest of the country when it comes to the way we think, act and conduct our business,” he said.
Fleming used the analogy of the tortoise and the hare, saying Kingsport represents the tortoise, moving at a slow and steady pace to finally win the race.
“We are steady and predictable, which is a very valuable quality in today’s economy,” Fleming said.
He said Kingsport’s collective psyche has changed in the past few years. Now, city leaders are more willing to take chances for the good of the community, he said.
“We realized that we were largely responsible for our own destiny. It took us getting out of our comfort zone to be able to be in the position we are today,” Fleming said.
For instance, city leaders approved tax increment financing to help jump-start retail development. And they approved funding for higher educational facilities in the downtown district, realizing that new jobs come to cities with an educated population.
“The world is changing, and we’re going to have to change too if we’re going to adapt. And education is a key to that,” Fleming said.
“Our commitment to doing what we have to do locally rather than waiting for the state and federal government to do it for us is very unique nationwide,” he said.
Kingsport won national accolades this year in recognition of its willingness to advance the education of its citizens. The city was chosen as one of three communities in the nation to receive the inaugural Siemens Sustainable Community Award. Fleming accepted the award in April on behalf of the city at the U.S. Chamber of Commerce Business Civic Leadership Center’s National Conference on Corporate Community Investment at Disneyland Resort in Anaheim, Calif.
During the ceremony, Kingsport was recognized for Educate and Grow, which allows qualified graduates from Sullivan County’s high schools the chance to attend college tuition-free at Northeast State Technical Community College for two years.
In addition, Kingsport was recognized for its efforts to establish the Regional Center for Applied Technology, a satellite campus of Northeast State in the downtown district. Today, the city is expanding those educational efforts by developing the Regional Center for Health Professions at Kingsport and the Kingsport Center for Higher Education, as well as the Regional Center for Advanced Manufacturing.
“We’ve had to do things that we normally would prefer there to be a clear line between the private sector and the government. We’ve had to get out of that comfort zone and partner where it makes sense in an effort to position Kingsport to achieve all that it can achieve,” Fleming said.
“Sometimes you have to do those things in order to be competitive with your neighbors and nationally,” he said.
Fleming said Kingsport’s efforts are paying off, as more than 2,700 families from 44 states have moved here in the past two years.
“We are trying to develop in a very sustainable way, and that means basically that we are trying to grow in a way that is responsible for our economy, our environment, our housing market, our hospitality and tourism market, our medical environment, and our industrial environment,” Fleming said.
“As long as you try to balance that and create a holistic community where people can live, work and play, if you can crack that formula, than you have done something that is pretty remarkable. And I think Kingsport is pretty remarkable.”