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Let’s say you are planning to add a room to your house.
Maybe a game room. Maybe an office.
But the contractor is giving you a high estimate, or the interest on a home equity loan is really high, throwing the project into doubt.
Here’s an idea: Ask the city of Charlotte to give you a break on a portion of your property taxes so you can make the numbers work — perhaps $200 a year for 15 years?
After all, once the room is built, the tax value of your house will go up. You will be adding new value to the overall tax base, meaning the city will eventually collect higher property taxes.
Everyone comes out a winner!
That’s a ludicrous example, of course.
But it came to mind this week after Charlotte City Council members and Mecklenburg County commissioners reached completely opposite conclusions about a proposal to use public money to subsidize converting an uptown office building into apartments.
Though they hadn’t heard the full details, several City Council members were enthusiastic in February about the idea of using public money to help Asana Partners transform the old Duke Energy headquarters.
Mecklenburg Commissioners, however, came to a different conclusion last week.
They not only shot down the proposal to rebate the developer nearly $19 million in property taxes over 15 years — they chided Asana for even asking.
“Are we going to invest our taxpayer dollars to help you get more wealthy?” Commissioner Elaine Powell asked. “Or are we going to invest our tax dollars in areas where it’s necessary to reduce disparities?”
Commissioner Susan Rodriguez-McDowell chimed in: “I just can’t even fathom. 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.”
This story is interesting for many reasons.
For one, Inside Politics has never seen city and county leaders so far apart on anything.
There are also questions about fairness, and whether city leaders are picking uptown over other distressed parts of the city, such as the city-branded Corridors of Opportunity (or even Ballantyne, which has a higher office vacancy rate).
It’s also unusual because the developer already bought the Duke building and announced its plans for apartments. The proposed tax breaks are arguably more of a bailout than an incentive.
Tax breaks are common
To be sure, handing developers and companies tax breaks is nothing new.
They are often given to companies that promise to bring new jobs to the city. Or to reimburse a developer for building new roads to service their project. Or to a professional sports team owner like David Tepper, who could theoretically move his team to another city.
But the Duke Energy headquarters conversion project is unusual.
No new jobs are coming to Charlotte.
No roads are being built.
There isn’t any affordable housing pledged for the project.
It’s just new retail space plus 448 new apartments, which would presumably be marketed as “luxury,” in an existing building.
The main justification from the city’s perspective is that uptown is struggling post-pandemic and converting the Duke building to apartments will provide a boost to uptown.
But the Duke building is only a stone’s throw from the one area of uptown that’s thriving: Brooklyn Village Avenue with the new Legacy Union skyscrapers, the new Ally office building, the new JW Marriott hotel and Whole Foods.
It’s hard to answer how the empty Duke office building is different from someone renovating an empty strip mall on the west side.
Or … someone renovating and expanding their house, except on a much larger scale.
Charlotte city staff likes the idea, and several council members have followed their lead, even before getting a concrete answer as to whether there will be affordable housing. (There are no plans for that.)
City Council member Dante Anderson, the mayor pro tem, raved about the project two months ago, saying it’s a “benefit across the board.”
But Mecklenburg Commissioners' approval is what’s really critical, since the county would be providing two-thirds of the property tax revenue that would be returned to the developer.
Commissioner Leigh Altman was unimpressed.
She asked the developer: “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 the government to help them? I don’t see why this is distinguishable at all.”
Welch Liles, managing partner at Asana Partners, 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.”
