Lessons in Traditional Development from Small Town Tennessee


Last week, I wrote about a suburb that needs to build its own downtown in order to create a financially sustainable future. This week, let’s look at the opposite: a suburb with a long-established downtown. In small town Tennessee, we find that a traditionally developed downtown remains resilient, and a potent generator of wealth, through the test of time and even despite some poor design decisions along the way.

Lebanon, Tennessee

Figure 1. Click for larger image. (Source: Urban3)

About 25 miles east of Nashville, Tennessee is Lebanon. This city is just over 30 thousand in population and is home to a well-established historic downtown core. However, with Music City’s growth encroaching on the west, there is the threat that suburban subdivisions unconnected to the city’s historic development pattern will dominate Lebanon in the future. Lebanon hired geoanalytics firm Urban3 to gain insight into how to preserve their city while also harnessing the power of nearby growth to maximize gains for their citizens. Urban3’s analysis is not just relevant to Lebanon; it’s also revealing in a broader sense about the performance of very small downtown areas.

Looking at all of Lebanon in terms of land value per acre (VPA) shows that the city is performing well as a whole relative to the rest of surrounding Wilson County (Figure 1). Lebanon generates three and a half times the tax revenue per acre that the county does. But some parts of Lebanon do better than others. Downtown Lebanon performs four and a half times better than the rest of the city in land VPA. This means that Downtown Lebanon is 14 times more financially productive than Wilson County as a whole. Let’s take a look at this small but mighty downtown and see why it is so successful.

 
 

Lebanon has a central square typical of Tennessee, where the bones of the city’s traditional development pattern remain with two-story buildings and narrow storefronts of mom-and-pop businesses. This is where the city’s most valuable real estate resides: you can see the slim ring of value spikes in the top right of Figure 1, standing tall above all other properties in the city. Unfortunately, this place has become auto-centric, with a traffic circle and parking lots covering much of the historic square. Ironically, this design is actually the “pedestrian-friendly” reconstruction finished in 2015 according to the Tennessee DOT. It still fails by a long shot to commit to being a place designed to produce wealth rather than a place designed to move cars.

Even with a design that privileges vehicles, this square is still the among the most valuable areas in the entire county. Lowery, Lowery, & Cherry, a legal office on the southeast corner of the square, weighs in at $6,386,352 per acre. Other properties on the square hold similar values. For reference, the nearest Walmart generates $775,744 per acre: the Walmart is only 12% as valuable a use of land. This isn’t unusual. We have seen humble mom-and-pop businesses dominate big-box monsters in other cities as well. Just look at Jimmy’s Pizza House in High Point, North Carolina.

Watertown, Tennessee

Figure 2. Click for larger image. (Source: Urban3)

We find the same type of productive, historic downtown over 11 miles southeast of Lebanon in Watertown. Figure 2 literally flips the 3D map on its side, viewing it from ground level to show a different sort of profile of VPA in Wilson County. In this graph, the vertical axis represents property value per acre, and the horizontal axis represents east-west distance (looking from the south, facing north). Higher spikes mean higher values.

Watertown, a town of roughly 1,500 people well outside Nashville’s suburban ring, demonstrates that generating valuable land does not depend on a big population. Rather, it depends on preserving a historic downtown with a resilient development pattern. This town actually edges out both Lebanon and Mt. Juliet for the most potent property in the county.

 
 

Even with the highest VPA in the county, Watertown, too, suffers from a redesign that caters to automobiles. Fortunately, the traditional structure remains. The open plaza with a gazebo actually reminds me of the Plaza del Castillo in Pamplona, Spain, yet the America flag and public library puts me on set of The Music Man. I love it.

All that small town charm packs a seriously productive punch. Wilson Bank & Trust, located on the south side of the square, boasts Wilson County’s highest land VPA at $6,781,069.

Revisiting Figure 2, you may wonder what is going on with the Mt. Juliet area. It seems to have generally high land value, but without a traditional development pattern, right? True. For now. Two main factors give Mt. Juliet a temporary boost that are worth noting but not emulating. First, there is a lot of new development in Mt. Juliet since it is immediately outside of Nashville. These structures have high appraisals only because they have not yet undergone any depreciation. Second, a portion of the property is along bodies of water. After all, Mt. Juliet calls itself the “City Between the Lakes.” This leads to the lake effect. This is a legitimate way to have high land values, but it is not replicable for other cities due to its reliance on favorable geography. Mt. Juliet has comparable land value per acre overall, but will not likely enjoy the long-term resilience of Lebanon and Watertown.

The story here is simple: traditional development creates value and resilience. Even poor design choices can’t destroy the clear financial productivity of these two little downtown areas. But imagine how productive they could be if better designed. I see an open, walkable square with benches that face pedestrians, furry friends and landscaping. It would be the perfect space for a lunch break during the week and a farmer’s market on the weekend. I view these towns in terms of the lessons I drew from Pamplona: these squares could not only be the center of the action in each town, but also set the tone for surrounding development and create an entire area of walkable, lovable places without the hustle and bustle of a big city. To me, that sounds like a place where people want to spend time and money, creating a better sense of community and a healthier financial situation.