Special Report

Charlotte: Southeast’s Financial Epicenter

Major Projects Funded by Bank of America, Wachovia are OK for Now

By Debra Wood

No place in the Southeast felt the reverberations from the recent financial crisis quite like Charlotte, N.C. As the nation’s second largest financial center, and home to Bank of America and Wachovia, the fiscal meltdown had the potential to dramatically impact the city, both in jobs lost and construction activity halted.

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That’s because both of those banks were funding nearly $1.5 billion in large, mixed-use projects – the $1 billion Wachovia First Street project and the $450 million One Bank of America Center, a new corporate headquarters. (Wachovia was constructing four cultural facilities as well as an office tower and trading floor.)

As is well-known, those two companies headed in opposite directions this fall, when Wachovia was bailed out by Wells Fargo & Co. of San Francisco in a $15.1 billion deal, while Bank of America added to its portfolio with the $50 billion purchase of Merrill Lynch & Co. of New York in an all-stock transaction.

Tony Crumbley, vice president of research for the Charlotte Chamber of Commerce, says the deal with Wells Fargo is better for stockholders and employees than the one initially announced with Citigroup. Wells Fargo stated in a written release its intent to keep the Wachovia offices as an East Coast headquarters for the merged company.

“With Wells Fargo, we feel like we just won the Super Bowl,” adds Steve Luquire, of Luquire George Andrews, a Charlotte marketing communications firm and a board member and former chairman of the Charlotte Regional Partnership, a nonprofit, public/private economic development organization. “It looks like Wells Fargo has a strong commitment to the major communities they are in.”

As for the construction for the two banks, it appears some aspects may be put on hold, but most will continue as planned.

Randy Thompson, project executive for Batson-Cook of West Point, Ga., lead contractor for Wachovia’s project, said that the bank had instructed Batson-Cook to remain on course.

The company is erecting steel on the 48-story, LEED-registered office tower. It has topped out the Afro-American Cultural Center and the 10-story podium, which will include a trading floor. The condominium portion of the project has been placed on hold.

At Bank of America, spokesman Larry Grayson says its project remains on schedule, adding that it represents a long-term investment and commitment to uptown Charlotte.

Crumbley says after the dust settles, Charlotte will remain the nation’s number two financial center with $3.3 trillion in banking assets, compared to $4.1 trillion in New York.

Michael Smith, president and CEO of Charlotte Center City Partners, a municipal service district-supported organization that promotes the economic and cultural development of the urban core, shares that optimism.

“The pace of change in the economy is unprecedented, and in Charlotte we are feeling it in a heightened way because of Wachovia,” Smith says. “Charlotte is going to be fine.”