Challenges for South's Reigning 'Queen'

As its stunning growth rate dips, Atlanta begins to fret about retaining its competitive edge.

After six years of stunning prosperity and growth, the reigning queen of the South may be stumbling - even if only slightly - over her own success.

Traffic-choked highways, dirty air, and crowded schools throughout metropolitan Atlanta - the price of an unprecedented influx of people and corporations - are forcing this star of the new South to reevaluate the meaning of success. The problems are also putting Atlanta into a renewed competition for businesses with other Southern belles such as Dallas and Orlando, Fla. - and increasingly, the queen is losing.

"Our greatest asset, our economic success, is becoming our greatest liability," says John Rhodes, senior vice president of Prudential Relocation in Atlanta. "The crush in Atlanta is wearing thin to people."

This year brings an early sign that Atlanta's magnetic pull may be weakening. After growing by an average 69,000 residents a year since 1991, Atlanta is now seeing a slightly slower rate of growth, according to the Atlanta Regional Commission (ARC).

The major complaints about all the expansion are the city's heavy traffic and inadequate highways. As a result, some business leaders say, corporations looking to relocate to the South's warmer climes may be steering clear of Atlanta. "We have an acute problem," says Mr. Rhodes.

Atlanta residents drive an average 34 miles a day each, more than in any metropolitan area in the United States. The city's growth sprawls largely to the north, and one massive highway intersection is not-so-affectionately known as "spaghetti junction." But the US government has imposed strict limits on building new roads because of concerns about adding to the area's already acute air-pollution problem.

SCHOOLS, too, are struggling to cope with the influx of students. Several counties have approved sales-tax increases to fund new buildings, but problems remain. Portable classrooms handle an overflow of students, even at brand-new schools. One high school in fast-growing Gwinnett County teaches students in 42 classroom trailers.

Still, Atlanta continues to shine, at least on paper, Rhodes says. The labor supply, cost of living, climate, good schools, housing costs, and airport accessibility help Atlanta keep its competitive edge. "Clients only get turned off if I bring them to town during rush hour," he says.

While acknowledging the "warning signs," Helen Tapp of Atlanta's Regional Business Coalition says Atlanta hasn't lost its "quality of life edge" over other cities.

"We have to set new goals," Ms. Tapp says of the transportation network. Fast-growing cities like Atlanta need to regularly check, "How mobile are goods and people in my community?"

"Unchecked growth" is a concern for Susan Rosenberg, spokeswoman for Atlanta-based United Parcel Service. UPS was held up as a role model for Atlanta relocation when the company moved its headquarters here from Connecticut in 1991.

But Ms. Rosenberg says many of the city's attractions remain. "The airport is even more accessible, especially for international flights," she says, because Atlanta is becoming a hub for domestic and overseas airlines. And "Atlanta still offers a suburban lifestyle with urban amenities."

But it's that suburban lifestyle that may be the root of the problem. As long as people can move five miles farther out and find affordable housing, growth will continue in spite of the pinch on roads, schools, and air quality, says Bart Lewis, an ARC demographer. ARC has established several incentive programs to persuade developers to build mixed-use projects, in an effort to get more people to live near their offices.

So far, though, none of the problems is serious enough to prompt an exodus.

"No one is ready to get out yet," says Rhodes of Prudential Relocation. "It's not an issue of not liking Atlanta. It's just that too many people still like it."