A new investment fund has purchased the minority-owned Charlotte company R.J Leeper Construction. As part of the deal, City Council member James Mitchell would be the new president and co-owner of the company. This week, we looked at the possible legal issues of the company doing business with the city while Mitchell is on the council.
That story was a collaboration with the Charlotte Ledger Business Newsletter. Now we’re going to take a closer look at the fund behind the purchase with the Ledger’s Tony Mecia in our segment BizWorthy.
Marshall Terry: Tony, what can you tell us about Bright Hope Capital?
Tony Mecia: Bright Hope Capital is a new company, Marshall, that was formed a few months ago. Three investors — pretty well-known people, including former Bank of America CEO Hugh McColl — put in money. And it's money that they want to invest into minority-owned companies in Charlotte with the goal of helping them grow, helping them get bigger and get better. And I talked to Hugh McColl about this earlier this week. He was telling me it's not just money they're putting in, they're putting in expertise, they're going to put in social capital.
They're going to do some things to really help these companies grow. They're not struggling companies. They're doing well, but they can benefit from that expertise and that money coming in. And then the idea would be to kind of like most investment funds get out over a number of years with a profit after helping those companies and by helping those companies, they feel like they're helping the community.
Terry Any idea of what company Bright Hope is eyeing next?
Mecia: Well, Marshall, they told me they're looking at about six to 12 investments this year in Charlotte. They said to look for one in the next few weeks, possibly in the transportation industry. So they're really looking at a range of industry.
Terry Tony, you report this week companies in North Carolina that received PPP money as part of last year's federal coronavirus relief package might get a surprise when they file their state taxes. How so?
Mecia: A lot of companies received these loans. These are COVID-relief loans that in many cases were forgiven. And I think the expectation from companies that received it was that money was going to be tax-free. And it is on the federal returns, but the state of North Carolina is saying on state returns, there are going to be some tax consequences in most cases for companies that received those loans because the way this works is the money comes in, the companies use that money to pay for payroll or for other expenses. And they're not paying tax for North Carolina on the money, but they can't then deduct the expenses of the payroll, so, by not deducting the expense of the payroll, that in effect increases their income and they're going to owe taxes on that.
So, it gets a little bit complicated, a little bit thorny, but I think you're going to have a bunch of companies in Charlotte and the state that are going to have a little bit of a surprise tax bill when they go to do those taxes. It winds up being about $5,000 for every $100,000 of PPP loan that a company received.
Terry Let's move on to some development news now. It appears a rezoning may be in the works for the Charlotte Pipe and Foundry property on Morehead Street. Now, this is a site that's been mentioned as a possible location for a new Panthers stadium, right?
Mecia: That's correct. People have been looking at that site for a while on Morehead Street by I-77, sort of catty-corner to the current stadium. Charlotte Pipe and Foundry has a couple of parcels there and they've been looking at moving. They're in the process of building a new facility out in Stanly County. So, as soon as that was announced, even before that was announced, the thinking was, "Well, gosh, that would be a great place to put a new stadium."
David Tepper, the Panthers owner, has talked about it, so it's not really a secret. The thing that's new is that this week, Charlotte Pipe and Foundry told me they are going to seek a rezoning, so I think you're going to see some movement on this, Marshall, in the next few weeks. We don't really have any specifics yet of what exactly they're doing or proposing, but that's certainly going to be something to pay a lot of attention to.
Terry Finally, Tony, in the fall, we talked about the Southern Christmas Show getting canceled because of the pandemic. Now you report the company that created that show and the annual Southern Women's Show is suspending operations. Does that mean there won't be any more of these shows?
Mecia: Well, obviously, Marshall, the bigger problem is that you really can't do events with hundreds or thousands of people. The Southern Christmas Show was created by Southern Shows. They actually sold it off a few years ago. Southern Shows still runs the Southern Women's Show, which is pretty popular here in Charlotte and other cities in the Southeast. They haven't been able to do that for obvious reasons. So last month, they sort of have started winding down their operations because there's nothing to plan. They don't really know when we're going to be out of this pandemic. They say that when conditions allow, they will they will ramp back up and that those shows will all continue. But for now, they're they're sort of going into hibernation until things improve with COVID.
Terry All right, Tony, thanks.
Mecia: Thanks, Marshall.