A Charlotte developer’s request for public money to help convert the old Duke Energy headquarters in uptown into apartments received a cold reception from Mecklenburg County Commissioners last week, leaving the future of the project uncertain.
The building on Church Street exemplifies a growing problem uptown: Older, outdated office buildings that find it harder than ever to attract tenants as companies downsize their office space post-COVID. At the end of 2022, Charlotte-based Asana Partners and Washington, D.C., developer MRP Realty bought the former Duke Energy headquarters in uptown for $35 million.
They announced plans to convert the boxy, beige building into 448 apartments and retail. However, the developers have struggled to get financing.
They’ve asked local governments to give them $19 million in property tax breaks that would be paid out over 15 years. Asana said the city and the county would still see an increase in $10.6 million in new property tax revenue, even after the rebate.
The proposal has gotten two very different receptions from the city and the county.
Many Charlotte City Council members loved the idea when they discussed it in February. They are concerned about empty office towers post-COVID and saw the conversion as a win-win.
“It’s very appealing, right?” said City Council member Ed Driggs. “I like the idea of creating the residential units. And I like the activation at that location.”
Council member James Mitchell was also enthusiastic.
“I’m a yes for all three bullet points,” he said. “We hear over and over from our visitors who come to our great city that one thing we are lacking is retail and center city. So that checks a big box for me.”
Dante Anderson, the mayor pro tem, also raved about the idea, saying it’s a “benefit across the board.”
The city’s economic development director, Tracy Dodson, supports the property tax break. She told council members she would ask whether some of the apartments could be affordable housing.
“From my seat, workforce housing, affordable housing, would be a part of the discussion,” she said. “I asked (Asana) to look at the numbers and back into that so that we aren’t assigning a number that they can’t hit.”
Last week, Welch Liles, managing partner at Asana Partners, asked Mecklenburg County to consider the property tax rebate to make the project work. The county’s support is important because Mecklenburg’s share makes up about two-thirds of property tax bills.
When asked about affordable housing, Liles had some bad news.
“Today we have not assumed any affordable housing as part of the project,” he said. “There is a gap between this project being economically viable and changing the rent profiles just furthers that economic gap.”
That was not what Mecklenburg Commissioners wanted to hear.
And while City Council members loved the idea, members of the county’s economic development committee, like Leigh Altman, disliked it.
She first asked Liles whether Asana is a for-profit company. She asked: “So you are in the business of making money. Why shouldn’t every other for-profit business who is in a difficult market come to government to help them? I don’t see why this is distinguishable at all.”
Liles said that is a “valid point.”
He then added: “We aren’t here to make our problems the city or county’s problems. First and foremost we are going to work tirelessly to get this project out of the ground.”
Commissioner Arthur Griffin said the project wouldn’t do anything for low-income residents and would “exacerbate” disparities.
Commissioner Elaine Powell had the same criticism.
“Are we going to invest our taxpayer dollars to help you get more wealthy?” she asked. “Or are we going to invest our tax dollars in areas where it’s necessary to reduce disparities?”
Mecklenburg Commissioners often vote in favor of subsidizing new projects, but they are usually for companies relocating to the county from another city, promising to bring jobs.
Commissioner Susan Rodriguez-McDowell said she “couldn’t look herself in the mirror” if she approved the tax rebate.
“I just can’t even fathom,” she said. “A group comes in with $7 billion in assets and wants to take taxpayers … to help create more wealth (for them). It’s not something that’s in our DNA.”
If the apartment conversion doesn’t move forward, it’s unclear what Asana would do with the old office building.
