Charlotte Report:

Construction Opportunities Should Keep Growing in 2007

By Bea Quirk

Tony Crumbley, vice president of research for the Charlotte Chamber of Commerce, says he was taken aback when he saw the final figure for the amount invested by new and expanding businesses in Charlotte during 2006: $4.2 billion.

That's nearly double the previous record of $2.2 billion in 1998 and triple the 2005 figure of $1.34 billion. Even subtracting the $880 million being spent on the emerging uptown cultural campus - the costliest project in the city's history - 2006 was still a record year.

"The investment figure includes projects that will be permitted later, so it is a leading indicator of construction down the road," Crumbley says. "The future looks very strong for Charlotte."

The new development is expected to create 12,000 jobs, another record.

People in the field agree that the future is bright. Eric Laster, president of Charlotte-based contractor Edifice, says: "This is the most building starts I've seen by far in the last 20 years. And from what I'm hearing from architects, the pipeline is full, too. I don't think we'll see any kind of slide for the next 24 months."

Another Charlotte company, Tyler 2 Construction, expanded its staff by 10% in January and is investing in technology to keep up. President Katie Tyler says: "We have a lot of loyal subs locally, but they're reaching their capacity. So we're beginning to talk to subs outside of the area."

Why the record growth? "We're finally coming out of the recession, and the abundance of office and industrial space we had is gone," Crumbley says. "The population is growing, the residential market has not slowed down and we are still a labor magnet. Our construction costs are 20% below the national average, which gives us an advantage, and land costs are less than in comparable cities."

advertisement

One announcement in particular also speaks well for Charlotte's future. In March, Charlotte/Douglas International Airport began work on its third parallel runway, making it one of only a handful of airports in the nation that will be able to land three planes simultaneously. About $80 million of the runway's $180 million cost is being funded by the Federal Aviation Administration, and an additional $40 million is being spent on road relocations and other infrastructure.

The runway is slated to open in early 2010.

Another transportation project that will have a dramatic impact on Charlotte's future is the LYNX light rail line, set to begin operating in November. With an expected cost of $462.7 million, the 9.6-mi line connecting the center city with Interstate 485 in the south is the first of six the Charlotte Area Transit System is planning to build. When completed, the system is expected to have a price tag of more than $4 billion.

CATS hopes to begin initial work on the next two lines - an extension of the current one and a commuter rail line to the north - this summer.

Charlotte's center city remains the major focus of the construction activity. "We're in a strong period - no doubt about it," says Steve Gennett, president of Carolinas Associated General Contractors. "The growth is being fueled by the banking industry, especially uptown."

Wachovia has been the driving force in the creation of a downtown cultural campus, a joint venture between the bank and the private and public sectors. It will feature the Bechtler Musuem of Art, Mint Museum of Art, Afro-American Cultural Center and a 1,200-seat performance hall. Anchoring the campus will be the bank's 48-story office tower and a 42-story condominium.

Batson-Cook Co. of West Point, Ga., is constructing the office tower, a 2,500-space underground parking deck and an underground vehicular tunnel. Excavation work for the entire complex began in January 2005 and will be completed this spring. The office tower, which is being built to meet LEED-certified specifications, has a completion date of June 2009. Construction schedules for the other components have not yet been announced.

About a block away, work has just started on the 100,000-sq-ft NASCAR Hall of Fame being built by the City of Charlotte with BE&K Building Group of Birmingham, Ala., as the construction management firm and Turner Thompson Davis, a joint venture of Turner Construction Co., F.N. Thompson (BE&K) and Walter B. Davis Co., all of Charlotte, serving as the general contractor.

The $154.5 million price tag also includes parking and an addition to the Charlotte Convention Center, which will be connected to the hall by an overstreet walkway. The hall is slated to open in late 2009.

Adjacent to the hall of fame, Indianapolis-based Lauth Property Group is developing NASCAR Plaza, a 19-story, 390,000-sq-ft office tower with a 1,000-space parking deck. TTD and Lauth Construction are serving as general contractors for the project, which was scheduled to break ground in February and is set to open in early 2009.

Further along in construction is EpiCentre, which is being developed by The Ghazi Co. of Charlotte and being built by Clayco Construction of St. Louis, which began work last year. In addition to a 267,000-sq-ft entertainment-retail complex on the site of the old Charlotte Convention Center, the $100 million-plus project will include a 50-story residential condo tower called 210 Trade Street.

Ghazi is developing that in conjunction with Flaherty & Collins of Indianapolis and is also building a Starwood A-Loft Hotel. Various components will begin opening next year.

Across the street, Bank of America will start work later this year on a 32-story office tower with a 17-story Ritz Carlton Hotel, to open in 2010 and 2009 respectively. Centex Commercial of Dallas is developing the $450 million project with Bank of America.

In addition, 13 condo towers are in various stages of construction. That includes the $65 million TradeMark with 28 stories and 202 units being developed by Boulevard Centro Development of Charlotte and being built by Batson-Cook for a summer completion.

Another condo tower is the 36-story Avenue, featuring 386 units, being developed by Atlanta-based Novare Group with Dunn Southeast of Charlotte as the contractor. It should top out this summer.

Also, at the first of the year, city and county governments were negotiating with the Charlotte Knights, a AAA minor league baseball team affiliated with the Chicago White Sox, about a joint public-private venture to build a stadium in uptown. The estimated construction cost for the 12,000-seat facility is $35 million; county government is considering a $7.8 million investment in infrastructure to support it.

The Knights, who now play in South Carolina, hope to throw out the first pitch in April 2009.

Already going up on the outskirts of uptown - just down the road from the hall of fame - Pappas Properties and Collett & Associates, both based in Charlotte, and Colonial Properties Trust of Birmingham are developing the Metropolitan, a $225 million mixed-use project.

The first phase, expected to open this fall, includes a Home Depot Design Center and a Target store, plus parking, all being constructed by Atlanta-based Choate Construction Co. The second phase will feature 135,000 sq ft of retail, 30,000 sq ft of restaurants and more than 200 condominium units.

The building boom encompasses the entire city. For example, in southwest Charlotte, near Interstate 77, Atlanta-based Pope & Land Enterprises will soon be breaking ground on a mixed-use development on the site of the old Charlotte Coliseum. The firm bought the 154-acre site from the city for $23.35 million, and Skanska USA Building of Charlotte is handling sitework for the project, which will eventually have 625,000 sq ft of office, 271,000 sq ft of retail and hotel space and 823 residences.

In the suburbs southeast of downtown, the first residents will start moving into the 134 units at Rosewood, developed by WCDM Development Co. of Macon, Ga., and constructed by Batson-Cook.

Carolinas Healthcare System, one of the largest hospital systems in the Southeast, is undergoing the largest building expansion it its history. At its flagship facility, Carolinas Medical Center, the $85 million Levine Children's Hospital and the $83.8 million expansion of the intensive care unit will open in tandem in October. Robins & Morton of Birmingham is the general contractor for both.

In addition, the system has about another $90 million of projects going on at its three satellite hospitals and an assisted-living center located in Mecklenburg County. Construction is being handled by Robins & Morton, BE&K, Birmingham-based Brasfield & Gorrie and Charlotte-based Myers & Chapman.