The world according to Johnny Harris
Plus: Why can't Piedmont cover gas-price increase?; Airport traffic relief; Era of vested bankers ends
|Tony Mecia||Apr 3, 2019|
The Charlotte Ledger
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Good morning! Today is Wednesday, April 3, 2019. Here are today’s big stories in Charlotte-area business news:
It’s tough to think of a Charlotte business leader who has played a bigger role in shaping the city’s growth than Johnny Harris, CEO of Lincoln Harris. His biggest hits include developing SouthPark and Ballantyne, luring the PGA here for the annual Wells Fargo Championship and more recently building the Legacy Union building on the old Charlotte Observer site uptown.
So, like a modern-day E.F. Hutton, when Harris talks, people listen. He spoke Tuesday to a roomful of power brokers at the Charlotte Rotary. There’s no finer distillation of Charlotte’s dominant business/political thinking. So here’s Harris on a few hot-button issues:
Change: “There are three kinds of people in this world. People who fear change, people who watch change, and then there are people who embrace change. The people who embrace change are the ones we call leaders.”
Light rail: “Think about the impact of light rail on Charlotte. Think about what South Boulevard was like before light rail was built. Think about the taxes that this city received from South Boulevard before light rail was built. … The same process that is happening in South End and out South Boulevard is starting and is going crazy going up through NoDa and up to the university. The same thing will happen.”
Civil Rights Movement: “The biggest wins, from a social standpoint, were probably John Belk and Fred Alexander dealing with the Civil Rights Movement and being able to take this city and stop it from being like some of the other cities in the South.”
Regionalism: “From Washington to Atlanta, that’s 639 miles. We are seeing the development of a very special economic center. … We need to put together an economic region marketing program to sell our region like they sell California. … There’s an infrastructure here that works already. … You have basically five ports and six major cities, if you call Richmond major.”
Dumb Raleigh decisions: “The biggest mistake ever made in this state’s history was made by the Raleigh City Council when they decided not to pursue a light-rail line from Raleigh to Durham to Chapel Hill. Had they done it, Amazon would clearly have been there in the Raleigh area. There are no three stronger universities in the country than in Raleigh, Durham and Chapel Hill. … People gotta get over their own self-value, what’s important to them, and start thinking about what’s important to others.”
HB2: “The runner-up biggest mistake is clearly HB2. That was a law that was passed to solve a problem that did not exist. … It cost us so much business that it was unbelievable.”
Republicans: “I have a real problem with the Republican Party in North Carolina. But there’s nothing wrong with what happened when they passed the flat 3% state corporate income tax. All these companies that are coming here are moving here because they like that, No. 1, and No. 2, they are bringing people here who make a significant amount of money.”
Millennials: “God bless the millennials. They are moving here to be part of this great city. … Now, they’ve got some problems we need to talk about. No. 1, they won’t ride a bus. . … They will ride light rail at 1 in the morning, but they won’t get on a bus during the middle of the day. Buses aren’t working for those people. They don’t want to live on a bus line. They want to live on a light-rail line. They want to run beside it. They want to have lunch looking at the light-rail cars going by. I like to look at the mountains or the ocean. They like to look at the light rail!”
Off-message on economic mobility?
Perhaps Harris’ most heretical comment came in the Q&A portion of the meeting, when he was asked how he can be so bullish on economic opportunity when a recent study showed Charlotte last among major cities for economic mobility. His response:
I think that’s interesting, because you don’t know, if I decide the evaluation criteria, I can control [coughs]. It has to do with who is involved in upward … By the way, all you gotta do is look at downtown Charlotte. There are people moving here every day. There are people buying homes. … When you go through the statistical review of upward mobility, it’s how you do it. I don’t know how they, I don’t know that. It’s interesting that I asked for copy of what was done, and I have yet to receive it from the organization that did that. It was Harvard that did it.
Coincidentally, a few blocks away at almost precisely the same time that Harris was speaking, SunTrust and BB&T pledged a combined $30M to the Charlotte area for affordable housing. One-third of that will go to a fund by the Foundation for the Carolinas, which has been using the much-discussed economic mobility study as a rallying cry in a campaign to encourage local philanthropy and community collaboration to address the problem.
Incidentally, the economic mobility study, by Harvard and University of California-Berkeley economics professors — came out in 2014 and is readily available on the internet. It uses statistical analysis to estimate the odds by city of people born into the lower-fifth income quintile moving to the top-fifth quintile.
Using complex formulas that conjure nightmares of calculus class, the study placed Charlotte 50th out of 50 cities studied, though the conclusions are almost comical in their precision in handicapping the odds of future events, like this: “The probability that a child reaches the top fifth of the income distribution conditional on having parents in the bottom fifth is 4.4% in Charlotte, compared with 10.8% in Salt Lake City and 12.9% in San Jose.”
Who are you going to believe: Johnny Harris? Or a group of economists?
Farewell to airport traffic jams?
Charlotte-Douglas International Airport is opening five additional traffic lanes on its upper level (departures) today, which should help solve some of the traffic logjams around the terminal.
Eventually, buses, taxis and shuttles will take the three existing lanes closest to the terminal, while we lowly regular drivers will be steered toward the outer five lanes. But those inner lanes won’t open for a few years, because the airport is planning to use them to house equipment needed for renovating the airport lobby. That’s a four- to five-year project.
Here’s a look from yesterday, when crews were putting on the finishing touches:
New lanes for passenger vehicles on the right. Old lanes on left (next to the terminal) will be for taxis, limos and shuttles.
Of course, the biggest airport traffic nightmares are on the lower level. The airport says eight new lanes down there should open by the end of the year.
Pro tip: If you’re picking somebody up from the airport, consider meeting on the upper level (arrivals), because the lower level is a little crazy right now.
Passing along gas costs
At a time when natural gas prices are hovering around historic lows, Piedmont Natural Gas says it needs to jack up gas bills by 9% to cover the cost of expansion.
The company filed for approval for a rate increase with state regulators this week. Piedmont says it’s the first increase it has sought in six years. If approved, the average customer’s bill would rise by about $6 a month, Piedmont says.
If that sounds like a lot for the poor and people on fixed incomes, well, Piedmont says in a fact sheet that customers are in a better position these days to send the company more money:
How much of an increase is Piedmont requesting?
Piedmont is requesting to increase its rates by approximately 9 percent. Much of the impact of this rate increase has been mitigated by recent federal and state tax reform, which will return $37 million to customers.
While that might be true, the good news is that tax reform helped Piedmont’s parent company, Duke Energy, even more. It paid $1.2B in income taxes in 2017. But with tax reform, in 2018, its tax bill plunged to $448M — a savings of more than $700M.
Sounds like tax reform actually mitigated the need for a rate hike.
Wait, Charlotte had a pro lacrosse team? “Charlotte's lacrosse team is folding but expects to return in 2021” (Biz Journal)
Wait, Charlotte has an arena football team? “Carolina Energy Start Season 2 With New Lineup, Sponsors” (WFAE)
To the ground floor: Elevator lady retiring: “NC Labor Commissioner Cherie Berry Won’t Run In 2020” (WFAE).
To the law firm: Bob Morgan’s new gig: “Former Charlotte Chamber CEO joining Robinson Bradshaw” (Biz Journal)
To the big house? “Former Rep. Robin Hayes indicted in North Carolina political money scandal” (Roll Call)
Property watch: VanLandingham Estate sold, future uncertain (Observer)
Attention, plane geeks: Inside Lufthansa’s Airbus A350, the biggest plane serving CLT. With lotsa photos. (CharlotteFive)
SouthPark to get lit: SouthPark ski jump church is becoming church/apartments/hotel, with “a massive cross [that] will rise above the church roof, bordered by glass and metal ‘swoosh’ shape. At night, this will be able to be lit up in any combination of colors, like the Duke Energy Center.” With renderings. (Charlotte Agenda)
Tweet of the week
Binna Kim@binnaskimNews - @patagonia just told us they are no longer doing branded vests for financial services companies. This is going to cause a #fintech crisis. Run for the hills.
Carolinas & Beyond
Lyft shares falling: “Analyst slaps $42 target on Lyft — 42% below its IPO price — says buying it is a ‘leap of faith’” A Ledger reader points out that Lyft’s market cap ($19.7B) is greater than that of American Airlines ($15.1B).
Middle of the pack: N.C. tax burden ranks #26 in the country, according to a new study. S.C. at #40.
Off the Clock
Low-key ideas for the weekend
Big-time sports on TV:
7:00pm, Raptors @ Hornets
6:09pm, NCAA Tournament semi-final, Auburn vs. Virginia, CBS
8:49pm (est.), NCAA Tournament semi-final, Texas Tech vs. Michigan State, CBS
4:00pm, Hornets @ Pistons
Movies opening in Charlotte this weekend:
Pet Sematary (R) (Rotten Tomatoes: 84%) Beware pet burial ground
The Best of Enemies (PG-13): Klansman, activist battle in Durham
Shazam! (PG-13) (92%): Kid becomes super hero
Highly rated movies now playing:
Us (R) (94%)
Hotel Mumbai (R) (75%)
Captain Marvel (PG-13) (78%)
How to Train Your Dragon: The Hidden World (PG) (90%)
Cheap getaways from CLT:
This weekend: Charlotte to Orlando, $158 round-trip on Frontier (nonstop), April 4-8
Charlotte to San Diego, $203 round-trip on Delta (one-stop), April 26-29
Charlotte to Ithaca, $263 round-trip on Delta (one-stop), April 25-29
Farther out: Charlotte to London, $441 round-trip on United/Lufthansa (one-stop), various dates in October, November
Farther out: Charlotte to San Jose, Costa Rica, $358 round-trip on Spirit (one-stop), various dates in October
Source: Google Flights. Fares retrieved Wednesday morning. They might have changed by the time you read this.
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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.