It’s been about week since Mecklenburg County released its property tax revaluation, the first since 2019. If you’re a homeowner, you may have been shocked when you opened the notice that came in the mail. Residential property values increased by an average of 58% -- much more in some neighborhoods. Commercial properties only increased an average of 41%. For more, we turn now to Tony Mecia of the Charlotte Ledger Business Newsletter for our segment BizWorthy.
Marshall Terry: Tony, why do commercial properties not go up as much as residential, and did some kinds of commercial real estate really lag?
Tony Mecia: It's a good question, Marshall. I mean, I think we know that in the Charlotte area there's a lot of demand for housing that has really pushed up residential valuations pretty high. And unlike in 2019, when commercial properties were higher than residential, this time, the residential average increases are much higher than commercial. And we've talked over the last couple of years about maybe some of the factors leading to that in the sense that it has been a hard time. For example, for office buildings -- so when you think about office towers getting people back into work, you know, for retail, you know, and the future of, you know, brick and mortar retail. So, yes, there are some sectors I think that, that are a little bit, that are not taking off as much as residential. But, you know, it's still up the commercial side, as you mentioned, 41%. So that's, you know, a little over 10% year over year. That's a pretty healthy increase, just not as fast as the residential, which I think is, as we all know, a huge housing crunch in the Charlotte region.
Terry: So here's one that really made us scratch our heads here. The value of troubled Northlake Mall went down about 11%. Quail Hollow, you know, arguably the fanciest country club in Charlotte, went down about 27% -- twice that. What's going on with golf clubs?
Mecia: Good question, Marshall. You know, if you or I are selling our house, there are a lot of comparable sales that can be used to assess the value of our residential properties. With commercial properties like the ones you mentioned, golf courses and shopping malls, it's a little bit tougher because there aren't that many sales of shopping malls or country clubs, for example. So what they do is they use a different way of evaluating the value of those properties, since there aren't really any comparable sales. The assessors often use an approach called an income-based approach, in which they look at the actual income of that property. So in the case of country clubs, even though Quail Hollow is on almost 300 acres in a very expensive part of town, at least for residential property, you know, you can't value the land of a country club as though it's filled with big multimillion-dollar mansions. You have to value it as, as a country club, as a golf club. And the county says that by looking at that method, by using an income-based approach that actually, as businesses, country clubs are not great, huge moneymaking businesses. That they don't have, for example, that many members, while they are paying pretty high initiation fees, that they're not really taking it and a whole bunch of money. So that the way that they're valued is much lower than what you might pay for a comparable, you know, residential type of development. Now, some people don't think that's really fair, that these values are so low on country clubs. But that's the way that the county does it. There's nothing to suggest there's anything improper about it, but it does make people scratch their heads.
Terry: All right. Well, let's move over to some development news now. Charlotte City Council this week approved a controversial rezoning in SouthPark. What makes it so controversial and what does it say about how that area is changing?
Mecia: Marshall, this is a development that's been in the works for quite some time in SouthPark. There's a company called The Related Group that wanted to replace about 118 condos on the corner of Colony and Roxborough roads -- these are the Trianon Condos, older condos from the early '70s -- that wanted to build 730 apartments, 24 townhouses, some retail. The issue was that some of the neighbors in the Barclay Downs neighborhood were objecting. They said it would cause too much traffic, that the building heights of 164 feet were just too tall. But the city council did approve it. Councilman Tariq Bohkari was able to broker a deal in which the developer kicked in some additional money to an affordable housing trust fund and helped fund the loop trail, walking trail around SouthPark. So I don't think everybody's happy with it, but it does look like it's going to go forward. You know, SouthPark has been changing a lot. There are a lot of developments in place and a lot on the books. So I think we're going to see more things like this in the future in SouthPark.
Terry: Finally, Tony, a very well-known former Charlotte CEO and philanthropist, died this week. What can you tell us about Dale Halton?
Mecia: A lot of people might recognize the name Dale Halton. Her name is on Halton Arena at UNC Charlotte, on Halton Theater at Central Piedmont Community College. She was CEO of Pepsi Bottling Company of Charlotte. She took over that operation in 1981. It was a family business. She sold it in 2005. Well-known philanthropist, locally and business executive. And she died this week at the age of 85.
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