North End Redevelopment Pushes Out Small Businesses

Mar 12, 2019
Originally published on March 22, 2019 3:04 pm

Redevelopment isn't just pushing up housing prices in Charlotte's North End, it's also affecting small businesses that rent space in the corridor.

City North Business Center on North Tryon Street is less than a mile from uptown, in an area of old warehouses and factory buildings. Last fall, it sold for $8.8 million to a Texas developer, who plans to bring new services to the neighborhood, including a brewery, shops and offices for creative businesses.

[Related Content: Finding Home: North End Is Hot, But Can It Handle Coming Change?]

But that means dozens of current tenants, many of them black-owned businesses, have to go. That's frustrating to tattoo artist Jerrell Banks of the House of Pain Tattoo shop.

"To be honest, I think it's messed up because people had established businesses here that was cut short, [on] short notice," Banks said.

The tenants at City North are a mix of businesses — tax preparation, medical supplies, real estate, temporary staffing, personal care, even old car restoration. The building also houses arts and community nonprofits.

Low-Cost Offices

Rents here are cheap, by Charlotte standards. A small office goes for as low as $400 or $500 a month — one-half or one-third the cost of pricier parts of town. The low rents make many of these businesses financially viable, said Christopher Dennis, who runs a real estate company and a community nonprofit from the building.

"For what we are paying and what we receive as our rent, it was totally affordable," he said. "I couldn't have found this anywhere across town. And then on top of that, to be right in the community where we're working has been a gift."

Dennis has two offices side by side — one for the for-profit affordable housing company E-Fix Housing Solutions and the other for Community Dream Builders Inc., a neighborhood improvement nonprofit. For just $750 a month, he gets about 450 square feet — including two small offices, a reception area, and access to a conference room.

Dennis said gentrification's effects on housing are well known. But he thinks the city needs to start talking about commercial gentrification, too. He said some businesses may not survive losing their affordable space at City North Business Center.

"Commercial gentrification does happen," Dennis said. "There may be a lot of small business that just won't be able to overcome the challenge of having to relocate to a new area and find new clients."

For now, Dennis said he plans to move temporarily into a smaller space nearby while he reconsiders how his business and nonprofit operate. "Streamlining," he called it.

Lockwood Changing

City North Business Center is in the Lockwood neighborhood, where investors have been buying both residential and commercial properties. The City North building and 7.5-acre site were sold in November to Artesia Real Estate of Austin, Texas. The company plans to rename it General Assembly, and renovate the building with a mix of office and retail space.

In the letter to tenants Feb. 21, real estate managers Cushman & Wakefield said tenants had 60 days to vacate — double what's required in leases. It recommended a broker to help finding new locations before the April 30 deadline.

Zandra Smith has run her medical supply company out of the building for five years. She said she read about the sale in The Charlotte Business Journal.

"It seems like they would've given us more notice," Smithc said. "We've never had a meeting, we've never had any kind of real communication from the new owners."

Smith said she has found another space, but her move is complicated. She still needs approvals for her new site and she'll have to move a warehouse full of supplies.

Where Will They Go?

Some tenants had only just moved in, like the hemp and CBD supply company Hemp Hop. Manager Justin Henson said they pay about $475 for a few hundred square feet.

"So it's, uh, pretty reasonable," he said. But where else might they move?

"Nowhere, to be honest," Henson said.

Henson said the company makes deliveries around Charlotte, and needs the location near Interstates 77 and 277.

The location is exactly why investors like Artesia are targeting the North End. Nobody from Artesia was available for a recorded interview. But in a statement, the company noted that the building is in one of "Charlotte's hottest and most attractive growth zones," and said it wants to "create a project consistent with driving economic opportunity and investment in the vibrant North Tryon corridor."

City North Business Center is home to dozens of small businesses, many of them black-owned. They're being evicted to clear the way for a major redevelopment of the building.
David Boraks / WFAE
City North Business Center is home to dozens of small businesses, many of them black-owned. They're being evicted to clear the way for a major redevelopment of the building.
David Boraks / WFAE
Jerell Banks is a tattoo artist at House of Pain, which will have to move out of City North by April 30.
David Boraks / WFAE
Chris Dennis runs a business and a nonprofit community group out of City North Business Center. He says he'll have to streamline after he and other tenants are evicted April 30.
David Boraks / WFAE
General Assembly will be the new name of City North Business Center, once it's redeveloped by a Texas investment group.
Cushman & Wakefield / Redline Design Group