How a food-truck kitchen pushed Charlotte to update the law

Plus: Atrium and Novant propose expansions; $50M Lynx Silver Line design study approved; Beef 'N Bottle predecessor had a 'boom-boom room'

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Like breweries and scooters, growth of commercial kitchens led to ordinance change; BB can make her crab cake mix

Dave Hegnauer remembers when he first received a violation notice from Charlotte’s code enforcement division last year, and he wasn’t pleased. For four years, out of a 13,000-square-foot former K&W Cafeteria building on Mallard Creek Church Road in University City, Hegnauer had been running The City Kitch, which rents kitchen space to food trucks and caterers.

Although his kitchens repeatedly passed inspections from the county health department, city code enforcement was alleging that zoning rules didn’t allow The City Kitch to operate in the strip shopping center where it is located — even though the site used to be a restaurant. That interpretation threatened to put him out of business.

But rather than fight the citation, Hegnauer took a different approach. With his business planning to expand into other areas of Charlotte, he suggested the city change the law. “Rather than just bitch about the fact that they sent us a zoning violation after we’ve been in business for a few years, we said, ‘Heck, we’ve got a good attorney. Let’s see if we can get it changed.’”

Last month, he won. After months of hearings and meetings, the City Council voted unanimously to change the ordinance, create a definition of a commercial kitchen and clarify that they’re legal in a wide range of business zoning classifications. And Hegnauer is off the hook for his old citation. Changes to city zoning laws almost never originate from residents. “It was kind of a unique situation,” says Laura Harmon of the city’s planning department.

Keeping pace with business: Hegnauer’s saga illustrates how emerging business trends can sometimes move faster than city ordinances and regulations. In recent years, Charlotte has changed its ordinances to adapt to a string of new industries, from microbreweries to e-scooters to ride-hailing services such as Uber and Lyft.

At the public hearing in July, council member Braxton Winston told Hegnauer: “We have been playing catch-up with this whole food truck industry. I just wanted to recognize that you saw a problem or something that is lacking within a regulation or the way we are enforcing government, and it seems like instead of kicking and screaming for somebody else to fix it, you are stepping up to the plate to work with us and figure out a solution, not just for yourselves, but for the city to move forward.”

The City Kitch co-owner Dave Hegnauer and operations manager Dana Winstead say the demand for kitchen space is growing so fast that the company plans additional locations in west Charlotte, Greensboro and elsewhere. Hegnauer started the company with his wife, Johnson & Wales instructor Carrie Hegnauer, in 2014 (not pictured).

Commercial kitchens — also known as commissary kitchens or shared-use kitchens — are a growing industry around the country, as food trucks and food-delivery services take off. They’re like a WeWork for chefs: They allow fledgling entrepreneurs or amateur cooks to try their hand at running a food business without a lot of expense. Clients can rent space at The City Kitch starting at less than $1,000 a month.

Expansion on the menu: The company is planning new locations in west Charlotte on Thrift Road off Freedom Drive and in Greensboro. There are a few competitors in town, including Carolina Commercial Kitchen on Latrobe Drive near the Home Depot on Wendover Road, but Hegnauer says there’s plenty of work for everybody.

The City Kitch has 45 active clients that rent one of its 10 shared kitchens or pay more to rent one of nine private prep spaces. Businesses using the kitchens, which are available 24 hours a day, include 29 food trucks, a company that delivers healthy meals, a bakery that specializes in desserts created with alcohol and a guy who makes pickles.

On a recent weekday morning, Brenda Bivins, owner of BB’s Homemade Krab Cake, was mixing some mayonnaise, parsley, eggs and other ingredients for a mix that she sells every Saturday at the Charlotte Regional Farmers Market. She moved to Charlotte from Maryland and was astonished that she “couldn’t find a decent crab cake.” One night, the idea hit her: “Don’t sell the crab cake, sell the mix.” Even small operators like Bivins can’t legally prepare food for sale at home, so renting kitchen space makes their businesses possible.

Brenda Bivins and Eric Jenifer of BB’s Homemade Krab Cake prepare their special mix that they sell each week at a farmers market. “This is the first place I found that was wheelchair accessible, and that’s important to me,” Bivins said.

“We’re able to help them get started without huge overhead,” said operations director Dana Winstead, as she walked by another part of the kitchen where there were big baskets filled with onions, celery and bell peppers.

Hegnauer, who worked at a car dealership in Cornelius before meeting his wife, a Johnson & Wales instructor, said he’s happy to put the conflict with the city behind him and focus again on expanding the business. Or at least he was, until he received his bill from the lawyer he hired to press his case with the city.

“We said, ‘Let’s see if we can work together and resolve it, and we did — other than the fact that it cost me more than I expected it to.”

Operators of nearly three dozen Charlotte food trucks prepare their food at The City Kitch in University City. Company officials said much of the recent growth has been in food-delivery and catering operations.

Dueling hospitals propose millions in expansions

Atrium Health and Novant Health are butting heads over plans for new hospital beds and operating rooms in Mecklenburg County.

The state’s Department of Health and Human Services said Tuesday that the hospital giants have filed applications with state regulators for competing plans involving sites in Matthews, University City, Cornelius, Pineville and Atrium’s Carolinas Medical Center complex in Dilworth. Some of the projects have been previously announced.

The proposals:

  • Novant would like to add a $2.2M operating room and 20 additional acute care beds at a cost of $27.2M at its medical center in Matthews. Those would open in 2023.

  • Atrium would like to add:

    • a $147M hospital in Cornelius, to be named Atrium Health Lake Norman. It would have 30 acute-care beds and two operating rooms and would open in 2023.

    • 16 acute-care beds in University City at a cost of $3.8M. Those would be complete in 2021.

    • 18 acute-care beds at CMC in Dilworth at a cost of $10.5M plus two operating rooms at a cost of $8M. Those would be finished in 2021.

    • 12 acute-care beds in Pineville at a cost of $7.2M, plus two operating rooms at a cost of $15.7M. Those would be completed in 2022.

Regulators have to certify that the plans for additional operating rooms and beds are actually necessary — that is, that they’re not just building them because they have gobs of money and want to one-up each other and raise healthcare costs. There’s a public hearing on the proposals on Dec. 16 at 10 a.m. in room 270 of the Government Center uptown.

Reader: Actually, there are already million-dollar cars in Charlotte; ‘the ultimate rich guy hack’

In response to the Ledger’s assertion on Monday that there are no million-dollar cars registered in Mecklenburg County, car guy and Ledger reader Mike C. says there’s more to the story:

Surprisingly, there are several multi-million dollar cars tucked away in Charlotte garages. DMV/tax value does not always align with street value or market price. For example, I know of a 1987 Porsche 959 that on Kelly Blue Book would be about $100,000 maybe in value. But street value would be well over a million, based on iconic status and low numbers produced.

There are tons of Ferraris, Porsches, McLarens , and Lambos that are owned by local residents that would top $200-500K+, but the cars are registered in South Carolina, where they have a second home. The ultimate rich guy hack is to register your cars in Montana, where you can avoid property tax on a high dollar vehicle.

Just a few counterpoints from an old car guy! 

In brief

  • Light-rail rolls on: The City Council approved spending up to $50M to design a new light-rail line linking Matthews, uptown, the airport and Gaston County. The council’s two Republicans voted no, citing concerns about paying for the line, which is estimated to cost at least $3B and has no source of funding. Democrat Braxton Winston said the line is “a matter of desegregating our city.” (Biz Journal)

  • Discovery Place plans: Renovations and expansion of Discovery Place could cost up to $400M — and the city might not have the money if it kicks in money to land Major League Soccer. A council member told the Business Journal that if the city helps fund the soccer bid, “other groups vying for tourism dollars may be on the outside looking in.” (Biz Journal/paywall)

  • No buggy whips at CPCC: Central Piedmont Community College’s enrollment has grown by 11% since 2007. It’s one of only 18 of the state’s 58 community colleges to add students in that time. Some colleges with falling enrollment are pushing outdated programs, one college president said this month at a meeting: “They’re still worried about making buggy whips.” (EdNC)

  • Jeweler closing: David’s Jewelers is closing its store in SouthPark. It opened uptown in 1977 and also used to have a location in Cotswold. “It’s just the right time,” co-owner David Rousso said. (Observer)

  • Office renovation: Levine Properties and Washington commercial real estate firm Akridge plan to spend around $30M to renovate a nine-story office building Levine owns on Hedgemore Drive south of Park Road Shopping Center. It will be renamed One Montford Park. (Biz Journal/paywall)

  • OSHA fines Carowinds: Carowinds has been fined $42,000 after a contractor’s hand was severed while he inspected the Windseeker ride in March. The worker “was working at the top of the tower when his hand got caught in a pulley.” The company said in a statement: “At Carowinds, nothing is more important than safety, as it is at the core of everything we do. We take these citations seriously.” (WSOC)

This week in podcasting

A round-up of interesting moments in recent Charlotte podcasts

  • Managing growth: Architect Rob Crane of C Design talks with host Jack Ossa about the challenges his clients are facing: “If you look at Charlotte, the amount of growth we’ve had, whether it’s the airport or UNC Charlotte or Queens or CPCC or any of these institutions in the area and private companies that are growing — growth is really difficult to manage. Some mentors of mine have always said downsizing is not hard logistically. It’s hard emotionally but not hard logistically. But growth is very difficult logistically, to be able to manage that growth and handle it … That’s been affecting a lot of our clients, particularly the airport. The amount of growth they have had in the last decade is incredible, and that’s difficult to manage.” (The Power of Design, Nov. 3, 31 minutes)

  • Go-go dancers at the steakhouse: Former longtime Observer food editor Kathleen Purvis talks with hosts Jason and Yvonne Ackerman about the origins of Charlotte’s food scene, including the reasons for so many local Greek restaurateurs and the creation of the venerable Beef ’N Bottle on South Boulevard: “Everybody thinks the Beef ’N Bottle is older than it is. It actually has an older history. The Beef ’N Bottle was started by a man named George Fine. … He opened a downtown restaurant called the House of Steaks. It was where Discovery Place is now. The House of Steaks was a businessman’s restaurant. This is where you went for business deals. It actually did have what they called a ‘boom-boom room’ upstairs. There were go-go dancers. And in 1978, when Discovery Place was built, they had to tear down the old House of Steaks. So George Fine went out to South Boulevard and found this little building, and that became the Beef ’N Bottle.” (Scallion Pancake, Nov. 3, 1 hour and 10 minutes)

Cheap getaways from CLT

  • This weekend: Charlotte to Newark, $62 round-trip on American (nonstop), Nov. 16-19 and various dates through February.

  • Charlotte to Philadelphia, $28 round-trip on Frontier (nonstop), various dates in November-December.

  • Charlotte to Fort Lauderdale, $62 round-trip on Spirit (nonstop), various date November-February.

  • Charlotte to Calgary, $303 round-trip on Delta/American/United (one-stop), various dates December-April.

  • Charlotte to Honolulu, $530 round-trip on Delta (two stops), various dates in January-February.

  • Charlotte to Hong Kong, $582 round-trip on Air Canada (one-stop), Feb. 17-25.

Source: Google Flights. Fares retrieved Wednesday morning. They might have changed by the time you read this.

Programming note: Ledger editor Tony Mecia appears as a guest on 90.7 WFAE at 6:40 a.m. and 8:40 a.m. on Thursdays for a discussion of the week’s local business news in the station’s “BizWorthy” segment. Audio and transcripts are also available online.

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The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.

The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.