A familiar name in real estate is returning to Charlotte. Trammell Crow first opened an office in the city in 1978 and went on to develop some of Charlotte's more notable buildings, like one Wells Fargo Center and the Charlotte Plaza building. For more, we turn now to Tony Mecia of the Charlotte Ledger Business Newsletter for our segment BizWorthy.
Marshall Terry: OK, Tony, it seems like Trammell Crow was a pretty big player in Charlotte real estate at one point. What happened to them, and what does their return say about the city's real estate market?
Tony Mecia: Well, Marshall, at some point in the last 10 or 15 years, Trammell Crow closed its Charlotte office. It never entirely went away. It's still been developing apartment complexes, things like that. But it was a pretty big name back in the ‘70s and ‘80s and ‘90s. The people who ran the Charlotte office in the 1980s, guys named Don Childress and Fred Klein, left in 1988, started their own company called Childress Klein, another major real estate developer here.
Trammell Crow has always kind of been around. It was pretty active in some of those uptown office buildings, like you pointed out. And now they say they're opening their Charlotte office once again. It's a big national real estate company. Probably like a lot of real estate companies, they see a lot of value in Charlotte. You know, in the Southeast in general there's a growing area, and a lot of opportunity to do a lot of different things.
Terry: Well, let's go over to Union County now. You report an HOA there is facing backlash from residents after informing them this week that it's basically dictating what internet service provider they can use. What neighborhood is this, Tony?
Mecia: Well, Marshall, we're talking about the Millbridge neighborhood in Waxhaw. It's a community of about 1,900 homes. And a lot of residents said they were taken aback this week when they received a letter from the HOA board saying that the board was in discussions to sign on an internet provider called Hotwire, and then the board wanted to pass that cost along to all of the residents. They said it would be under $49 a month. Some of the residents said, hey, this is not something we need. This is not something we're asking for. We have internet service, cable TV already, you know, we don't need this. Some of the comments on the neighborhood Facebook page said don't log us into a contract, and one said this is starting to resemble a totalitarian state.
Terry: Well, can an HOA legally do this?
Mecia: We checked with some lawyers who specialize in this kind of law, and they said yes. And, oftentimes, this is built into the contract that you have that, that when you buy a home and you agree to be part of an HOA — that that is explicitly in there. And in Millbridge, it's explicitly says internet providers are something that the HOA board can contract for, along with things like utilities, security, trash and recycling. Those sorts of things.
Terry: All right. Well, let's move over to water service now. You report one of the three major credit ratings agencies says it might downgrade Charlotte Water bond rating. What's behind that? And, also, what are the implications for customers if the rating does get downgraded?
Mecia: Marshall, you might recall that earlier this year, Charlotte Water said that it had settled a lawsuit for more than $100 million. Some developers had sued, saying that Charlotte Water was improperly charging for new water hookup. So that was costing the system a lot of money. The ratings agency Fitch said that because of those liabilities, that the debt Charlotte Water has is higher than projected. They said it's going to be looking at that bond rating, which is the highest bond rating, AAA. But possibly downgrading it.
Generally, if the bond rating is downgraded, it costs borrowers more money. So you could have higher borrowing costs for the city. Charlotte Water told The Ledger in a statement that it doesn't think that's going to happen. We also have seen increases in water rates over the last few years in Charlotte and as these costs increase, I think you know it's fair to say you might see higher water costs to pay off some of this debt.
Terry: Finally, you have an update to a story. We talked about a few weeks ago, public defecation and urination in uptown. There's a new theory on what may be causing a rise in this behavior. What is it?
Mecia: Marshall, you might recall, last month residents of Fourth Ward uptown went public with complaints that public urination and defecation is on the rise. And they said it was because of a lack of enforcement by police and a lack of urgency by the city. The City Council, a couple of years ago, took out those behaviors as criminal penalties and (some residents would) like to see them restored.
This week, though, City Council member Braxton Winston came up with a different explanation. He said it's because the uptown main library is closed. It's been closed for a couple of years as they knock it down and build a new structure there. He said that that's really been a center for vulnerable people, and that without those bathrooms there, that those folks who — nobody really said this but I think we're talking about the homeless population — that that's a place where they would go to the bathroom. And with that being closed, it's only natural that they need somewhere to go. And unfortunately, that appears to be in public parks and in other public places around uptown.
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