NC Rescinds Charlotte HRO

[vicupstate]

NC Gov. McCrory will be on Meet The Press this Sunday.

http://www.charlotteobserver.com/news/politics-government/article72037457.html

He also  filled a legislative vacancy with an openly gay man.  Interestingly enough, it wasn't his idea.  The vacancy was caused by the death of a Democrat House member.  By law, the local incumbent party nominates someone to fill vacancies and the Governor is required to appoint them.

http://www.charlotteobserver.com/news/politics-government/article71903617.html

[vicupstate]

Since HB2 in went into effect in NC, the titans of business have been openly concerned about lost economic development prospects, but few have put hard numbers to the impact. This article does cite numbers and they are brutal if truly representative.

On Urban Planet someone posted that Tampa and Jacksonville are in the running for the PayPal jobs that Charlotte lost. Since Tampa was the runner-up the first time, I would think they would be in the catbird seat.

The first question at Wednesday's state of the market panel from moderator Richard Kelley, senior vice president of InterFace Conference Group, was about HB 2's impact on North and South Carolina real estate.

"If you look at our business and core offerings, (there are) several different areas where we help our clients," said Chris Schaaf, executive vice president at JLL. "One of those is major (company) relocations to the state of North Carolina.

"It's come to an absolute screeching halt," Schaaf continued. "Those inquires have essentially gone away."

Schaaf and other panelists throughout the day agreed that the biggest concern in real estate over HB 2 are for companies that had quietly short-listed North Carolina as a place to grow or relocate, but have now crossed Charlotte, Raleigh and other cities off their lists.

"It's much less about PayPal, it's much less about Maroon 5 not coming here, it's much less about Cirque du Soleil — it's more about the other companies, events, concerts that nobody has even heard about that were considering coming to N.C.," but now aren't, Schaaf said. Just weeks after announcing it would bring a 400-job operations center to Charlotte, PayPal (NASDAQ: PYPL) pulled the plug on those plans, citing HB 2.

At JLL, Schaaf said the firm tries to internally track the amount of inquires by companies looking to create jobs in North Carolina.

Since the bill was signed into law, that number is down 90%, Schaaf said.

"It's having an impact on (tenant) prospects," said John Ball, senior leasing agent at Trinity Partners, who is leasing Portman Holdings' 19-story office tower under construction at 615 S. College St. "Hopefully, it's not a long-term problem. The companies that are a year or year-and-a-half away are still keeping Charlotte on the list, but the problem (is) the ones that have to make a decision today."

  http://www.bizjournals.com/charlotte/news/2016/06/02/hb-2-election-uptown-office-market-big-topics-at.html

[fsquid]

rest of the state seems to be doing ok.

http://edpnc.com/about-the-edpnc/news-events/

[finehoe]

rest of the state seems to be doing ok.

http://edpnc.com/about-the-edpnc/news-events/

That may or may not be true, but the website you link to doesn't support that conclusion in the slightest.

[fsquid]

rest of the state seems to be doing ok.

http://edpnc.com/about-the-edpnc/news-events/

That may or may not be true, but the website you link to doesn't support that conclusion in the slightest.

neither does a bunch of real estate folks who's quotes cannot be validated.

[vicupstate]

rest of the state seems to be doing ok.

http://edpnc.com/about-the-edpnc/news-events/

That may or may not be true, but the website you link to doesn't support that conclusion in the slightest.

neither does a bunch of real estate folks who's quotes cannot be validated.

What does it benefit then to broadcast to the world that prospects are drying up? Given their personal interests they would only have incentive to downplay the impact.

[Tacachale]

NC may still be doing fine. But it's a fact that they're losing out on businesses that otherwise would have been slam dunks if they hadn't pulled this nonsense.

What sucks is that Charlotte's getting hit the hardest, and they're the city that *passed* an HRO.

[vicupstate]

http://www.charlotteobserver.com/news/business/biz-columns-blogs/development/article82819767.html

HB2 hurting leasing for speculative office buildings.

For the developers planning to open 1.5 million square feet of new office space in Charlotte within the next year or so, the timing of the controversy over House Bill 2 couldn't be much worse.

New office towers are rising across the city, from Ballantyne to uptown, and almost all of them are being built as speculative projects, meaning they don't have an anchor tenant yet. The new law has put Charlotte and North Carolina in the crosshairs of a national firestorm at exactly the time developers hoped to be luring new tenants and making splashy announcements about the first occupants of their new office towers.

"The timing on this is pretty sour," said Maxwell Hanks of Spectrum Properties, which is developing a 25-story office tower at 300 South Tryon Street. They have an anchor tenant, Babson Capital, but still have about half the building left to lease. It opens in about a year.

Developers are particularly keen to land new tenants from outside the market, companies that want to open a Charlotte office or relocate significant operations to the city. That helps grow the overall office market more rapidly and fills new space without simply shuffling existing companies already in Charlotte between office space.

But it's those companies most likely to be put off by HB2, a new state law passed in March that nullified a Charlotte ordinance which would have expanded non-discrimination protections for LGBT individuals. Last month, the Charlotte Chamber said inbound inquiries about new economic development were down 58 percent since lawmakers passed the bill in March, and client visits down 69 percent from the same time last year.

"You really want as much demand from out of the market as possible," said Hanks. He said he's still seeing "pretty good" interest from prospective tenants, but is concerned some companies won't relocate to Charlotte. "I think HB2 really hampers their ability to do that. Intuitively and logically, it's got to hurt...Perception is reality on the national stage."

No major leases have been announced yet for any of the speculative buildings planned or under construction.

In the most dramatic protest by a company so far, PayPal canceled a planned 400-employee office in Charlotte just weeks after the project was first announced. They had planned to lease office space in University City.

Now, because of the bad publicity, developers worry that they're being crossed off potential clients' lists before they even know they were under consideration.

"We don't know if there are folks that would be calling us from outside the market if we didn't have HB2," said Mike Harrell of Beacon Partners. They're building a 7-story, speculative office building in Dilworth that will open next year. "Everybody wants as many people coming to lease headquarters space as possible. I don't think there's a lot of those deals out there now. It (HB2) could be why we're not seeing a lot of out-of-town prospects."

Harrell said the new space coming online in the Charlotte market will get leased, even if it takes a little longer than anticipated. But if the issue drags on for months or even years, making it less attractive for companies to relocate to Charlotte, the next round of office development might be sidelined.

Still, developers are optimistic in the long term. Charlotte's economy remains strong, the city is adding jobs and they're confident state lawmakers and city leaders will reach a compromise – even if they're not sure how. And last year, the vacancy rate for Class A office space dropped to 12.6 percent, according to Integra Realty Resources, the lowest it's been in Charlotte since 2008.

"The big picture is still really solid," said Hanks.

John Ball, senior leasing agent with Trinity Partners, is working to lease 615 South College, a 19-story office tower under construction. He said that while it would be ideal to land big tenants from outside the market, many Charlotte companies are growing and can also take more space.

"In a perfect world, yes," he said. "We feel confident we can lease it to existing companies and growing companies in the market."

For now, he said the controversy puts people pitching out-of-town companies at a disadvantage to office projects in other cities.

"Anytime you have to explain something your competition doesn't," said Ball, "that's not a good thing."

Brian Leary, of Crescent Communities, said the perception problem extends beyond office space. He said he was recently talking with brokers about marketing a planned new warehouse and industrial complex just over the state line in South Carolina. One of the first things they said the project has going for it: Since it's not in North Carolina, there's no HB2 issue to deal with when talking to possible tenants.

"It's something people want to avoid," said Leary. The reason, he said, is potential negative backlash and criticism, not anything actually negative with the state's fundamentals. "If they could sign a lease and it never get out, that would be one story."

He said the issue is even coming up now when he talks with potential investors.

"It's the real deal," said Leary. "When I talk to potential equity partners, they say listen, I've got 49 other states that aren't causing heartburn with my funders."

Still, Leary is hopeful that the controversy will fade after a deal is reached. He said Crescent is still talking to potential tenants for Tryon Place, a planned office tower at Stonewall and Tryon streets the company hopes to start work on later this year.

"I do believe once this gets resolved, the hangover will be fairly short," said Leary. "However, the longer you go the greater the risk of the cure harming the patient."

[pierre]

Won't be long before the NBA pulls next year's All Star game from Charlotte.

And it is only a matter of time before the NCAA starts pulling events from the state. Greensboro is slated to host opening round games of the basketball tournament next year.

[vicupstate]

You can add 730 to the number of jobs lost because of HB2:


North Carolina's House Bill 2 played a deciding role in a Washington-based real estate company choosing Richmond, Va., over Charlotte for a 730-job expansion, real estate sources told the Observer Tuesday.

CoStar Group, a real estate research firm, announced Monday that it had chosen Richmond for its research operations center after a national search. The company said it expected to create 730 jobs and invest $250 million into the "local economy."

CoStar officials had earlier focused their search on a new office tower under construction at 615 S. College Street in uptown Charlotte, where it would have been an anchor tenant, said the sources, speaking on condition of anonymity because they were not authorized to discuss the matter publicly. But the company's board rejected the location because of HB2, which limits protections for LGBT individuals, the sources said.

Read more here: http://www.charlotteobserver.com/news/business/article110349597.html#storylink=cpy

[fsquid]

It looks like Charlotte repealed the ordinance this morning and the State is expected to repeal HB2 tomorrow.

http://www.wral.com/charlotte-acts-1st-hb2-repeal-could-come-this-week/16353736/

[finehoe]

So if I'm reading this correctly, Charlotte has repealed their HRO (which was rendered invalid by HB2), and now the state government will rescind the state law.

So bottom line, LGBT folks still have no legal protections in NC.

Is this correct?

[fsquid]

So if I'm reading this correctly, Charlotte has repealed their HRO (which was rendered invalid by HB2), and now the state government will rescind the state law.

So bottom line, LGBT folks still have no legal protections in NC.

Is this correct?

it means the law goes back to being silent on the issue I believe which is good enough for the NBA and NCAA

[Jimmy]

While it may be good enough for the NBA, it's no longer good enough for the NCAA.  They have issued some new guidance and the very first question asked of sites bidding for events is something like: do you have state or city protections for fans and competitors?

In essence, HB2 has moved the ball from the position of no-protections, fine, to no-protections, not-so-fine-we're-going-to-look-at-Atlanta-and-Orlando-and-Tampa.

[Tacachale]

So if I'm reading this correctly, Charlotte has repealed their HRO (which was rendered invalid by HB2), and now the state government will rescind the state law.

So bottom line, LGBT folks still have no legal protections in NC.

Is this correct?

That is true, but it appears to be an honor killing.

The plan is for modified HRO's to be widely passed.  But they are HROs that do not protect transgendered people.

So if I'm reading this correctly, Charlotte has repealed their HRO (which was rendered invalid by HB2), and now the state government will rescind the state law.

So bottom line, LGBT folks still have no legal protections in NC.

Is this correct?

it means the law goes back to being silent on the issue I believe which is good enough for the NBA and NCAA

This is correct. The current HB2 actively discriminates against transgender people, and prevents local governments from protecting any LGBT people. The compromise is that HB2 will be rescinded, but (some) local governments will pass ordinances that protect LGB people but not T. It's a deal with the devil to remove state-sponsored discrimination.