Charlotte Revs Up for ‘08

2008 should be a signature year for Charlotte’s construction industry

By Bea Quirk

Charlotte is expecting 2008 to be a banner year for construction. That’s because an array of signature projects, most of them in the center city, are going full throttle. According to Charlotte Center City Partners, a group that promotes economic development in the city’s urban core, more than 50 projects worth about $4 billion were announced or begun in the area during the past two years.

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The vacancy rate for office space in the central business district was 2.3% at the end of 2007, lowest in the nation, according to CB Richard Ellis Group. Home to two of the country’s largest banks, Bank of America and Wachovia, Charlotte is the second-largest banking center in the U.S.

While new work isn’t coming in as fast as in the past, contractors remain generally optimistic that these projects and a growing population should drive the need for new building down the road.

According to the Charlotte Chamber of Commerce, there were a near-record high 326 new and expanding business announcements last year, creating 14,646 jobs and making $2.3 billion in investment. From 2000-20006, the Charlotte MSA had a population growth of 14.6%, seventh fastest in the nation. The chamber expects the city’s population to grow by 3.6% this year.

“2008 is when we’ll start seeing the plans made in ’04, ’05 and ’06 become reality we’ll be able to touch and feel them,” says Winston Kelley, executive director of the $157 million NASCAR Hall of Fame now under construction. “We’re replacing cranes with buildings this year, and there will be a lot of ribbon-cutting in 2009 and 2010.”

The 40,000-sq-ft hall of fame, which broke ground in January 2007, is set to open in late 2009 or early 2010, and the contractors are BE&K Building Group, as well as Turner Thompson Davis, a joint venture of Turner Construction, FN Thompson and Walter B. Davis Co., all of Charlotte. The project includes enlarging the ballroom of the Charlotte Convention Center, which will be connected to the hall by an over-street walkway.

Adjacent to the hall is the 20-story, $100 million Hall of Fame Plaza being built by Turner Thompson Davis and Indianapolis-based Lauth Construction, whose parent company will own and manage the 390,000-sq-ft structure, which is set to open in 2009. A 1,000-space parking garage will serve both buildings. Pei Cobb Freed & Partners of New York City designed the entire Hall of Fame complex.

Just a few blocks away, Wachovia is building a LEED-registered, 48-story office tower that will  anchor a $1 billion mixed-use development featuring a cultural campus with three museums and a performance hall; 300 residential condos; retail space; a university classroom building; and a 2,200-space, eight-level parking garage. All the various components of the Wachovia development will begin staggered openings in 2009.

Atlanta-based Batson-Cook Co. is the lead contractor, handling the infrastructure, including tunnels and the garage, as well as the 43-story condo tower. It is partnering with J. Russell & Co. of Atlanta on the office tower, as well as on the 46,000-sq-ft Harvey B. Gantt Afro-American Cultural Center.

Rodgers Builders of Charlotte and Walter B. Davis will jointly build the Bechtler Museum and the 1,200-seat Knight Theater. The contractor for the Mint Museum of Art has not yet been selected.

There are also plans to include on Wachovia site a satellite campus of the Wake Forest University Babcock Graduate School of Management.

Although located several blocks down the street from the Wachovia cultural campus, the $31.6 million renovation of Discovery Place is being funded through the same mixture of public and private funding. The 26-year-old children’s museum will close in January 2009 for the project and re-open in March 2010. Rodgers Builders is managing preconstruction services.

Wachovia’s crosstown rival, Bank of America, began a LEED-registered, 32-story office tower in 2006, and it’s expected to open in 2010. Connected to the 750,000-sq-ft structure (and 700-car garage) is a 150-room Ritz Carlton Hotel. The Charlotte office of Balfour Beatty Construction is the contractor for both buildings; the cost is estimated at about $400 million.

Tony Plath, a professor of finance at UNC-Charlotte who follows the construction industry, says recent woes in the subprime market shouldn’t negatively impact the growth plans of the two large banks. “The financial and banking industry will still be growing in Charlotte this year, and the long-term looks good,” he says.

The center city’s construction activity is not all about business. The EpiCentre, located on a 3.25-acre site that previously housed the old Charlotte Convention Center, is now starting to open its doors after three years of construction. A 267,000-sq-ft entertainment complex is opening in phases; a $25-million, 175-room ALoft Hotel will open in the fall; and a 53-story, 410-unit condo tower called 210 Trade will open in fall 2009.

Just outside the traditional boundary of the center city, a few blocks from the NASCAR Hall of Fame, the Metropolitan is a mixed-use development from a partnership of Pappas Properties and Collette Associates, both of Charlotte, and Birmingham, Ala.-based Colonial Property Trust. Atlanta-based Choate Construction is the contractor for all the project components.

A Target and Home Depot opened this fall, and 160,000 sq ft of office space and a Best Buy will be open later this spring. In the latter half of the year, 101 condominiums will be completed. Other retail space is also planned.

Condos are still relatively active in center city Charlotte, with about 5,800 units in 22 properties valued at about $2.8 billion planned or under construction. Although existing home sales fell 20% in November from the pervious November, the average sales prices still increased 6% to $233,141.

Not all of Charlotte’s construction activity is located in the center city or being done by the private sector. In November, voters approved a $516 million school construction bond, the largest in Mecklenburg County history. The bond will pay for expansion and renovations at 17 existing schools and construction of 12 new ones, including two middle and four elementary schools that could open as early as 2009.

Higher educational institutions are also conducting aggressive building programs. At UNC-Charlotte, Balfour Beatty is building a $65 million student union, the largest project in the school’s history. It’s slated to open for the fall semester.

Work is continuing on the 54,000-sq-ft, $35 million bioinformatics center for a 2009 opening. It is the first UNC-Charlotte building to seek LEED certification. Later this year, site development and construction work is expected to begin on a $45.8 million, 150,000-sq-ft, off-campus classroom building in the center city. Completion is planned for 2010. Rodgers Builders is the contractor for both buildings.

At Central Piedmont Community College, about $60 million in construction will be under way by year’s end. Among the largest projects are a $22.5 million allied health building and an $11.5 million culinary arts building on its central campus near uptown. Both projects are now being put out to bid.

Infrastructure is also being upgraded and expanded to meet the city’s growing population. The city’s first light-rail line, called the Lynx, opened in November, and ridership has exceeded expectations. The 9.6-mi line connects south Charlotte with the center city and cost $462.7 million to build. It has already led to about $1 billion in actual and planned development along its route.

Also in November, voters turned back a move to rescind the sales tax that funds Charlotte Area Transit, including the Lynx and bus lines, with a 70% vote. This frees CATS to pursue plans to extend the Lynx north from the center city to UNC-Charlotte.

Preliminary engineering should start soon, so there are no cost estimates yet, but CATS has said construction could begin as early as 2010 with completion by 2013.