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August 2006
A Triple-header for Charlotte
By Lisa Hoffmann

Over the past few years, more than 50 development projects have been announced, broken ground, undergone renovation or reached completion in the city of Charlotte, representing investments of more than $3.6 billion. These projects comprise thousands of housing units, 500,000 square feet of retail space, and 2.3 million square feet of office space. This kind of building boom doesn’t happen by accident; the urban core of Charlotte is pulsing to the beat of organizations committed to the city’s growth.

Charlotte Center City Partners is one of the organizations that works every day to promote the city as a viable business arena and an exciting place to live and play. Founded in 1979 by business leaders, center city residents and city government, its exclusive purpose is to facilitate and coordinate public and private development.

Last spring, Michael Smith came on board as president, moving from his prior position as chief financial officer at the Charlotte Chamber of Commerce. In just over a year, Smith and his colleagues have engineered a complex economic development plan involving land swaps, relocations and the construction of a new baseball stadium in Third Ward. Viewing the ambitious plan on maps and the bulleted list of transactions involving so many different parties makes you wonder how it can possibly succeed. Speaking to Michael Smith, though, makes you wonder why anyone doubts it will.

 

A Man on a Mission

Smith grew up in Greensboro and attended the University of North Carolina at Chapel Hill as an undergraduate. He attained an M.B.A. at Kellogg Graduate School of Management at Northwestern University in Evanston, Ill., and moved ahead in corporate positions at Lucent Technologies in Dallas and AT&T Communications in Chicago. Despite his corporate success, he yearned to settle back in his native state.

“I was pretty committed to returning to North Carolina,” Smith says. “Once you’ve lived here, you want to stay here.”

He took a job in First Union’s capital market department and moved to Charlotte. When he decided to become CFO of By-Products Interactive, a Chicago-based start-up, he commuted to Chicago rather than uproot his young family.

Smith left the Chicago start-up shortly after the 9-11 terrorist attacks. “At that point they needed an accountant, not a CFO,” he says, so he took stock of what he wanted to do next. After some soul-searching, he decided he wanted to do something mission-based, something with the potential to make a difference in peoples’ lives. He became CFO for the Charlotte Chamber of Commerce and stayed for three years.

“While contemplating a move to Center City Partners, I had the opportunity to talk to the likes of Krista Tillman, Jim Palermo and Michael Marsicano, and it became perfectly clear to me that Charlotte Center City Partners offered a unique opportunity to really serve the region,” he says.

Tillman is president of Bellsouth’s North Carolina operations, Palermo is executive in residence at Johnson & Wales University’s Charlotte campus, and Marsicano is CEO and president of the Foundation for the Carolinas. All three sit on the board of directors for Charlotte Center City Partners.

Smith became president of Charlotte Center City Partners in April 2005 and quickly set to work.

 

A Plan Takes Shape

Charlotte Center City Partners is focusing on several major objectives for the urban core of the region in the fiscal year 2006-2007. It plans to create and implement a retail development strategy through the work of a specialized committee. Smith feels that it’s time to bring more retail outlets that are compactly positioned to serve the city’s residents.

The group also plans to work with the city and the Department of Transportation on a parking and wayfinding study that will reveal ways to provide consistent parking signage, more public and private parking decks, and to develop a parking consortium among local businesses.

“Not only will this make the city more visitor-friendly, but it also improves air quality when we can prevent having people circling around the city looking for a place to park,” Smith says.

In addition to its ongoing commitment to support growth of center city’s job base, the organization also plans to launch a marketing campaign to raise awareness of South End and uptown across the region.

As Smith and his staff turned to economic development, he reviewed the new park plan proposed for Third Ward. He thought its proposed location would prevent it from meeting its potential as an active, safe park.

“I don’t think Charlotteans are going to walk two and half blocks down Third Street to the park to spend 20 minutes on their lunch hour or between meetings,” Smith explains. “We began to review the adopted 3rd Ward Neighborhood plan and review the recommendation of Civitas (the consultant) for the locations that would make the park more accessible.”

Smith looked to an adjacent parcel of land he thought was a better locale. Bordered by Church, Third, Mint and Second streets, the 5.2-acre park could easily be connected to South Tryon Street by a 35-foot-wide park promenade with a gateway on Tryon Street, making it more accessible to workers, residents and visitors. It seemed like the perfect solution. There was only one problem: the land belongs to Mass Mutual Financial Group.

“We started talking to Mass Mutual and thinking about some of our other priorities, and what might work for them in terms of a land swap,” Smith explains. “Mass Mutual is highly invested in Charlotte and agreed to consider a swap.”

Wachovia owns a portion of the parcel and is agreeable to allowing Mass Mutual to purchase its portion if it will become a park.

Back in September 2001, the city of Charlotte launched the Second Ward Neighborhood Master Plan Study as part of the Center City 2010 Vision Plan. This study revealed a want and need for mixed-use development incorporating a pedestrian-friendly neighborhood with affordable workforce housing, connectivity and open spaces.

“This area was once known as the Brooklyn Neighborhood, a vibrant African-American community, but has since become primarily a government district,” Smith says. “The Second Ward Neighborhood Plan could bring vibrancy back to the area and honor its history.”

Charlotte Center City Partners examined Marshall Park and the Board of Education property in Second Ward as a possible offering for a land swap with Mass Mutual, allowing Mass Mutual to build a new urban village with a park in its center for the Second Ward.

To assemble the land in the Second Ward, Charlotte-Mecklenburg Schools must agree to relocate its headquarters. The County would compensate CMS for their land through funds created by the future property tax paid by this development.

“It’s a great opportunity for the school board to update an outdated and inefficient facility,” says Moira Quinn, senior vice president and COO for Charlotte Center City Partners.  “We believe this gives the school system  some choices it doesn’t have now.”

In early 2005, the Mecklenburg Board of County Commissioners asked Center City Partners to lead a AAA Baseball stadium site selection analysis. Attendance at the AAA ball club’s games was sagging and talk of moving the stadium to uptown has waxed and waned over the years. The Site Selection Committee recommended three potential sites as South End, Memorial Stadium and the Third Ward park site.

Smith says. “As we began to piece together our land swap proposal, I revisited these recommendations and then contacted the Knights to measure their interest and appetite for funding a Stadium, if the premium location at 2nd – Graham – 4th – Mint were available. The Knights organization shifted to being willing to pay for the new stadium privately only for this location in Third Ward. It suddenly became clear to us what an incredible opportunity was becoming available.”

The projected cost of the new Knights stadium is $35 million, and the prospect of encouraging such an extraordinary investment in Charlotte energizes Smith. If the deal goes through, the Knights would be the only team in the International League to own its own stadium.

 

Meeting the Bottom Line

If all this sounds like a life-sized chess match, it is. If this proposal is successful, it could trigger many new projects in the Second and Third Wards. Citizens and elected officials are bound to have lots of questions, many that center around one big concern: How much is this going to cost us?

“This is a good investment for Charlotte. Financially, there’s no new ask of the taxpayers to move the West Park – that was already in the budget in the other location,” he explains. “The land swap would remove the burden of operating expenses for Marshall Park from the city and give it the opportunity to massively stimulate develop in the Third Ward. By offering the Knights a land lease deal similar to the one it offered the Panthers, the incremental contribution would be the infrastructure to facilitate the Knights’ $35 million investment.”

“Aha!” you’re thinking, that’s going to cost us! Smith has an answer at the ready. Center City Partners has been talking to landowners around the proposed ballpark and they are sharing development plans that hinge on the approval of this proposal. The plans include about $900 million of development.

“The city will recoup more than its infrastructure costs within a year after this surrounding development is built out,” he projects.

The Third Ward Neighborhood Association, Friends of Fourth Ward, and many of the city’s major employers have publicly opined in favor of the transaction. Smith meets weekly with city and county officials, Charlotte-Mecklenburg Schools representatives, Mass Mutual and the Charlotte Knights organization to update and inform them and keep the negotiations flowing. Like a house of cards, each piece of the transaction rests on another.

“Michael presents a compelling case based on facts and hardcore numbers,” Quinn says. “This is not just based on dreams and speculation.”

There’s more at stake here than just the city’s economic growth, according to Smith.

“Bringing baseball back to center city will provide affordable family entertainment during 71 home games each season,” Smith boasts. “Having a beautiful, accessible urban park will improve the quality of life of the people who live, work and play here. Realizing the vision of the Second Ward Development Plan will recreate a vital and vibrant section of our city and provide affordable housing for the people who help keep this city running.

These are the tools that are going to allow us to mature as a community so we can become a place where it’s easy to recruit and retain the best talent in the world.”
Lisa Hoffmann is a Charlotte-based freelance writer.
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