By now you might have seen or heard lists of the blockbuster movies coming out this year or the big 2024 fashion trends that folks are talking about. Well, we’d like to add another list for you to consider: the hottest property rezonings expected in Charlotte. For more, I’m joined now by Tony Mecia, of the Charlotte Ledger Business Newsletter, for our segment BizWorthy.
Marshall Terry: Tony, despite my attempt at humor there, rezonings are actually very important, and you have compiled a list of some of the big ones happening in Charlotte. So what should folks be looking out for?
Tony Mecia: Well, most people do get very passionate if there are things being built in their neighborhood. There are certainly a number of rezoning petitions that are in front of the Charlotte City Council — totaling more than 3,000 homes — where some of the nearby residents aren't really that thrilled about them and the potential effects they say on traffic and schools and open space. There's this development proposed by three developers along Providence Road near Old Providence Road, south of Lansdowne, where they're proposing about 1,500 homes and a grocery store. There's one in the Rea Farms area: Tom Short Road, 900 homes and a middle school. And then there's a really controversial one in the Piper Glen-Ballantyne area: 640 homes. Residents in several of these are not really that pleased with them. And they're working with the developer and the city. They're trying to find some sort of an accommodation but, eventually, it's going to come to a head in the next few months.
Terry: All right. From property rezonings to property taxes now. The Ledger did an analysis of companies that were able to lower their recent revaluations and their bills. Which ones?
Mecia: Yes, Marshall, there are a lot of buildings uptown where their 2023 values are lower than they were in 2019. And some of the owners of these buildings have been pushing for them to go even lower than that. Bank of America owns four such buildings, including the Corporate Center, the adjacent parking deck, the Gateway Village developments and what used to be known as the Transamerica Square building at North Tryon and 7th.
Bank of America succeeded in lowering their property taxes on each of those. The Bank of America Corporate Center, for instance, was originally assessed for $345 million. Bank of America appealed it, and it was reduced to $308 million. There have been a number of others throughout uptown that were pushing for that, again because of some of the things we've been talking about for weeks — there's a lot of empty office space, and the market is pretty soft for office space right now.
Terry: And I want to get to that in just a moment. But first, am I wrong in thinking that it seems easier to win a revaluation appeal on a commercial property than a residential property?
Mecia: Yeah. We analyzed the database from the Mecklenburg County Assessor's Office and found that on the commercial appeals, those were successful about 50% of the time. On the residential appeals, those have been successful about 40% of the time. We talked to some experts and they said what is going on there is, on the residential appeals, it's more likely to be individual homeowners. Maybe they don't entirely understand the process or the burden of proof. Maybe they don't have appraisals or the evidence that they need. Commercial owners, a lot of them will hire consultants. You know, there are different ways to value commercial property. So yes, it is true. Those commercial appeals tend to be more successful.
Terry: And speaking of commercial property, the Charlotte City Council's economic development committee got a sobering report Monday on the state of the city's office market. How bad was it?
Mecia: Well, a lot of council members seemed, I think, a little bit surprised at how bleak of a picture was painted for them. The vacancy rates of office buildings, they were told, is at a record high above 20%. You have several buildings that are majority-empty. You have others that are in some sort of financial distress and might get sold at a lower price or foreclosed upon. As the hybrid work and remote work has persisted, companies don't need as much of that space. And City Council members were told this week it's likely to get worse before it gets better. But there are a bunch of leases that are up for renewal in the next couple of years, and you might see some more of that. What's going on there is, they might be positioning the city to develop some sort of an incentive program in order to sort of address that situation. Although there was some skepticism from some council members the city would have the resources to make any meaningful dent in the problem.
Terry: Finally, the owners of the Charlotte Knights have announced the team is up for sale. What's prompting that, and any idea how much the team could fetch?
Mecia: The majority owner, Don Beaver, he's 83 years old. He's owned the Knights since 1997. They didn't come out explicitly and say why they're looking to sell, but you can probably imagine — you're an owner and you get into your 80s, maybe you're looking for something else to do. The Charlotte Business Journal reported that comparable teams have sold from between $70 million and $90 million. Beaver bought a majority ownership in the team for $20 million inflation-adjusted. So he's making out OK on that, it would sound like, assuming they're able to find a buyer and that goes through. There's also a minority owner of the team, Bill Allen, who owns 10%. He's also planning to sell his interest in the team.
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