Developer seeks tax incentives to build uptown apartments
Proposal calls for up to $19M from city and county to convert 'obsolete' former Duke Energy headquarters on College Street
The following article appeared in the April 8, 2024, edition of The Charlotte Ledger, an e-newsletter with smart and original local news for Charlotte. We offer free and paid subscription plans. More info here.
Developer seeks up to $19M in tax incentives to convert old Duke Energy HQ into apartments; commissioners skeptical
The new owner of the former Duke Energy headquarters building uptown is proposing that the city and county give tax breaks of up to $19M to transform the old office building into apartments.
At a meeting last week of the county’s economic development committee, Welch Liles, a managing director of Asana Partners, said that the plan to convert the office building into 448 apartments and retail space would represent a “first-of-its-kind conversion opportunity in Charlotte” — but that it can’t be done without a “partnership” with Mecklenburg County and the city of Charlotte. [Edited 4/9/24 to correct title of Liles]
The former Duke Energy headquarters at 526 S. Church St. (left) would be converted into 448 apartments and retail space, under plans by Asana Partners and MRP Realty (right). (Photo and rendering from Asana presentation to county commissioners)
He said Asana and owner MRP Realty are seeking a tax-increment grant of 45% of property taxes over 15 years and that the precise amount is still under discussion. The grants are intended to more than pay for themselves through increased property tax revenues. The city and county typically use such grants for transformational projects, such as the Dilworth/Midtown medical innovation district The Pearl and for the mixed-use Ballantyne Reimagined development.
It would be unusual to draw on such a grant program to build apartments, but city economic development officials and uptown boosters have said it could be one way to help pump new life into the older and mostly empty office buildings uptown. The old Duke building opened in 1975.
Even with the cost of the grants, the city and county would collect more than $10M more in property taxes than they would if the redevelopment doesn’t go forward, Liles said. The developers would spend an estimated $251M on the project, which would increase the property’s tax value by nearly five times.
“We feel like this is a first-of-its-kind opportunity to partner with both Mecklenburg County and the city of Charlotte to help address the concerns in vacancy moving forward,” he said. He called the building “obsolete,” “antiquated” and “less-than-welcoming.”
The meeting marked the first time that developers publicly discussed the level of government grants they are seeking. (An article last month in the Charlotte Business Journal cited an unnamed source estimating the amount at $10M to $20M.)
MRP bought the building, at the corner of Brooklyn Village Avenue and Church Street, in December 2022 for $35M. It originally announced it would convert the site to a mix of apartments, office space and retail, with no mention of seeking government assistance. It later dropped plans for the offices and scaled back some of the apartments.
In January, it won first place in a design contest by Charlotte Center City Partners that encouraged devising creative uses for outdated office space, at the same time that city economic development officials started laying the groundwork for incentives to help old office buildings. City council members have sounded open to the idea.
Commissioners at last week’s meeting, though, largely sounded skeptical of the plans and questioned whether the redevelopment would advance goals of economic mobility and reducing racial disparities. —Tony Mecia
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Executive editor: Tony Mecia; Managing editor: Cristina Bolling; Staff writer: Lindsey Banks; Business manager: Brie Chrisman