- [Narrator] This is a production of PBS Charlotte.

- This Week in Off the Record, more give and take on Charlotte's 2040 plan.

Well, actually not much give as council members take stubborn stands on single family zoning, same story for CMS versus the County Commission, both sides meeting in private, but no public compromise on plans to hold back school funding.

Duke Energy pulls the plug in more than half of its high rise office space.

How hybrid work after COVID could change Uptown skyline.

And you know what they say about karma right?

Yeah, karma's a big job boost in FinTech as Credit Karma picks Charlotte as it's East Coast headquarters.

Plus it's Memorial Day weekend, Charlotte NASCAR fans in the stands getting vexed at the track and Charlotte's Airport crowds are back.

Lots to talk about next on PBS Charlotte.

(upbeat music) And from our PBS Charlotte studios in Historic Plaza Midwood I'm Jeff Sonier and we're Off the Record talking about the stories you've been talking about this week.

And if you watch the news, read the news and listened to the news well, you'll recognize the names and faces around our virtual table.

Dedrick Russell from WBTV and Ashley Fahey from the Charlotte Business Journal.

Also Elly Portillo from the UNC Charlotte Urban Institute and Mark Becker from WSOCTV.

Thanks for joining us this week.

And you can also join the conversation from home, just email your questions and comments to offtherecord@wtvi.org.

Well council members met this week they'll hear from the public and they heard from the public this week about the 2040 plan.

That's the plan we've been talking about ourselves for a couple of weeks now, the concept of a changing what much of Charlotte neighborhoods are used to in the form of single family zoning.

This is usually the time when council members give and take, when there's maybe a little political horse trading but Ashley, I know you've been watching this pretty closely.

They're kind of digging in right now it seems like on City Council.

- Yeah, so the second draft was released last week.

And of course, this is a much anticipated draft with all the public comments, the City Council comments, real estate developers comments having come in over the last six or so months.

Second draft was released lots of major and minor revisions but some council members say, you know, there's still a lot of fundamental problems they have with the plan.

You know, there was a lot of questions again on Monday night around the changing of the language around single family zoning so that the new draft now says, instead of allowing duplexes and triplexes on all residential lots, it now says allowing them in all place types which City Planning Director Taiwo Jaiyeoba says, this will allow the community to have some input during place mapping process which will take place next year after the plan passes.

But then there was some debate again on Monday about, well, you know, what does this actually mean?

'Cause there was some legal interpretation of, well this could actually just mean on all lots anyway.

So again, a lot of debate around the same things we've been hearing.

Council Member Renee Johnson used the term Groundhog day to describe the discussion on Monday.

And I think that's something those of us who have been following could probably relate to because it's been a lot of the same issues, a lot of the same conflicts, I guess.

And if this thing passes, if it comes up for a vote in late June, I think it will be a pretty narrow it could be a very narrow, you know approval or not approval either way six, five, but you know, we're in a two week comment period now for the public to come in and say you know what more revisions they wanna see.

I know the real estate community has submitted a another five page document with recommended changes.

There's a community meeting tonight on Thursday that again, kind of just rehashing what the community wants to see differently.

But again, Jeff, you know, it's a lot of the same things we keep hearing week after week and it's not just limited to single family zoning.

- Yeah.

- Okay, I'm gonna jump in from the outside here and Ashley, I know you guys following this a lot more closely than I am.

There's place types designation, as opposed to residential or residential developments how does that change anything?

You know, it seems like mumbo jumbo, but what's the distinction?

Why is that different?

- So the place types mapping process at a high level, it's basically when the community will be able to go in and look at their neighborhood and say, okay what place types do we wanna see in our neighborhood?

But the point that was made on Monday was, well, if you don't have a place type that only allows single family housing then you have to imagine that there would be some amount of duplexes and triplexes still built in the neighborhood.

But I guess that's the argument.

How much does this actually change?

The point that the planning director and assistant city manager was making was, well this way the community will have more input on where, you know, place types will go in their neighborhood on a more granular level, but again TBD on how much that will really change that specific issue.

- And it's just so, it's so interesting that some of the council members have already checked out of this whole process.

You know, one meeting Council Member Egleston was talking and right beside him you have Council Members Tariq Bokhari, he is on playing with a Rubik's cube right there and just trying to figure out the size of a Rubik's cube during a meeting.

So, you know, it's just very interesting how this will all evolve.

I was talking to some people and they were saying Charlotte is the 15th largest city in the country.

And so therefore we always said that we wanted Charlotte to be a world class city.

So now with world-class city, we have world-class problems and we're going to need people and leadership in order to solve those problems so that we can continue to grow and grow healthy and grow where it can benefit all people no matter what zip code, no matter what area you live in.

So let's bring it on city leaders.

- And you know, right now, as Ashley was saying, if this plan came up for a vote today, I think it would pass six, five.

The votes are there for that.

But city leaders really don't wanna see a comprehensive plan that's supposed to guide our growth for the next two decades approved on a one vote majority.

So, you know, Mayor Lyles has urged them to talk to each other, figure out for people who are on the fence maybe, what issues they might be willing to do some horsetrading around, can they get to a bigger vote margin?

But part of the problem is, you know, fundamentally, some of the council members, some of those five who are opposed to it really just don't like the plan.

They don't like the plan and they don't like the process that created it.

And they say it was kind of flawed from the beginning.

And at this point, I don't see, you know, this late in the game, how they can fundamentally change their stance towards the plan as a whole.

So they might get one or two more votes swayed to approval.

But, you know, I don't think we're gonna see anything close to a unanimous approval for this plan.

- That's not, probably not a good look that here we have a divided board going into how Charlotte should grow over the next 20 years, you know, that's division right there.

So that's not a good look to me.

- That division though is different than a lot of the divisions we often see on City Council.

I mean, we've got, you know, the White Republicans if you will, against this plan, we've also got several council members who represent lower income and minority neighborhoods.

Victoria Watlington is maybe the most outspoken of them also coming out against this plan for basically the same reasons that whether it's you know, Myers park or Eastover or Westover, which is off of West Boulevard, this is gonna change the nature of some of these neighborhoods.

And in the words of Council Member Watlington, it's gonna change our neighborhood a lot faster than it changes Myers Parker or Eastover because of the cost of land and the gentrification and changes that are already occurring there.

So it is, you know, it is kind of interesting that while it's a close vote and a sharply divided vote, a lot of people dug in that there are folks siding with each other on this particular issue that don't normally side with each other on other issues.

- And let me just jump in and bring in along with Jeff and Dedrick some of us who've been around for a while, that the historic context, Jeff I don't remember this kind of debate over one of these plans that have come out every 20 years or so that the 2000 plan, the 2020 plan.

I mean the single defining issue and sometimes problem in Charlotte over the years has been growth and how to manage that, which is a far better problem than managing the opposite, right?

Which is some of the Northeastern or Iron Belt cities dealing with shrinkage, we're dealing with growth.

And it's a great to have.

It's the first time though, I can remember this kind of controversy over a growth plan, right?

- And I want you to just say these 10, 20, 30 year plans in the past, a lot of them have dealt with kind of the big picture, you know, here comes rail, how were we gonna develop Uptown?

Where's the stadium gonna go?

Those sorts of things.

This is really the first one that I recall that really reaches the, I mean, maybe it's 'cause we're maturing as a city, reaching outside of the center city and the big you know, economic growth ideas and touching all the neighborhoods.

So when you touch every neighborhood not everyone likes to be touched.

- And I think in this- (indistinct) And this plan too, you know you're seeing a lot of ideas that have been uncomfortable maybe for some people and town, whether it's inclusionary zoning or impact fees things that aren't legal today but things that are mentioned in the plan as things we wanna get to one day in order to get more affordable housing or see things more equitably developed.

And I think that a lot of that kind of stuff has been a point of contention.

You know, some council members say, why can't we have a more aspirational rather than tactical plan?

So I think that's partly why we're maybe seeing this more contentious today.

- Well, we're supposed to see the final version of this in about a week and a half and a final vote by council sometime next month.

So, I guess we'll be talking about this again very soon and we'll see how this all shakes out, but right now it does not look like a whole lot of room for compromise among those council members on either side.

Speaking of not a lot of room for compromise, CMS continues to battle the County Commission over commission's desire to hold back some funding to tie that to quality of education in some of the lower performing schools, Dedrick any movement on this at all?

I know that things are getting kind of personal between both sides, but what about actual change in positions on either side for this?

- As council, as CMS chairperson would say, no progress, no progress, this week the two leaders on both sides they met for like 48 minutes behind closed doors trying to hammer out a deal.

And at the end of that meeting, no deal that and we had the straw vote this week where majority of county commissioners have agreed to withhold $56 million from CMS until the school district produces a plan of academic achievement for Black, especially Black students.

And I guess CMS is saying that this is going to adversely affect students and staff.

CMS said this week, that with that budget cut, in addition to what the county is not giving them, they're looking at an $81 million budget shortfall.

And CMS said that it will be very, very hard for cuts not to happen in the classroom with that budget shortfall.

And so it's, you know and CMS says that they do have a plan but if you look at the plan, the plan is very aspirational and they don't want to, you know, and they've been there before where they've given like three years we're going to do this and they really haven't approached that.

And then (indistinct) just said that if we continue to give county commissioners, if we continue to bow down to county commissioners like this, what will they want next year?

And then what will they want the year after next?

So, this was the first time where I've heard (indistinct) come out very forceful and say, this is our plan.

And she said that we don't go up to county commissioners and tell them, show us the plan that you have for affordable housing and show us the plan you have for this.

So it's just a nasty situation.

And at the end of the day, the kids are the ones who are suffering.

- I've been surprised by the kind of intensity of the rhetoric directed against the schools.

I listened to the county commission budget straw votes this week.

And, you know, it really sounded like a lot of the rhetoric that you hear sometimes from the other side of the political spectrum about not funding public schools because they're underperforming.

And, you know, you got the sense really of a lot of frustration boiling over.

And then with the Black political caucus also supporting the county's plan to withhold funds you know, there's kind of a lot of political firepower lined up against CMS and they're in a really tough spot.

I think you talk about the intensity.

I mean, what we're seeing really nationally even across the world is the intensity of the discussion and I think a lot of that has to do with social media.

You can't ignore the people who are chiming in on Twitter and Facebook and, you know, putting pressure on politicians to take extreme positions and to dig in.

And it's the nature and the tone of the conversation over anything political as intensified.

And I'm not sure that's all good.

- Yeah and, you know, as adults, can we not work together to come up with a plan?

You know, CMS is saying that, hey, we came up with that strategic plan and we came up with a strategic plan with the community.

You know, they had community forums where you could come and figure out and say what we need to happen in our schools.

And so they said that the strategic plan that they have was a community plan.

And so now people who are complaining, you know CMS is asking, where were you with we were coming up with this strategic plan?

But nevertheless, I understand, and I get the frustration on both sides, but at the end of the day, something has to happen to make sure that our students are able to read, write and do arithmetic once they leave high school.

- Yeah, what's interesting about the whole dynamic here is that county commission can withhold 56 million and 56 million is significant because they say that would essentially be the salaries of leadership if I'm not mistaken, but they can't control how the school board spends its money regardless of how much they give them.

So the honest truth is CMS can make this hurt.

I mean, this could really hurt kids, depending, you know we're that $56 million shortfall winds up whether it's the actual salaries of people that the county commissioner intends or somewhere else depending on how the money's spent.

So, you know, again, nobody argues that schools need to get better.

Nobody argues that there needs to be a plan but as I think we all agree here, why can't both of these two sides kind of figure out a better process than this, you know, this hostage taking that seems to be going on right now with the budget.

- We talking about Congress or we talk about?

I mean you know, again, it seems pretty universal but that's how politics are done these days.

And that, I think it's unfortunate.

- Yeah, again another topic that we'll keep on talking about week after week until they do finally work out something one way or the other, we weren't here last week, but a big surprise story that I think has got legs, as they say will continue to be talked about is the downsizing of Duke Energy.

A surprise announcement in many ways them deciding to step back their footprint if you will, 21 floors in that iconic Duke Energy Center Uptown, they're going to pull out and move somewhere else across the street.

But what they're talking about is reducing their footprint because of hybrid work, hybrid work schedules not fewer employees, but just less need for office space for the employees there'll be retaining.

This is the first step perhaps in, you know maybe other employers doing the same I suppose.

- Yeah, you know, this has been the hottest topic of discussion in commercial real estate circles I mean, since the pandemic started about how much, office space companies will need, how much impact remote work is going to have on their real estate footprint, cause you are seeing there's been to some companies' surprise a lot of productivity among employees, perhaps even more than when they worked in the office over the pandemic.

And so you're seeing everyone talking about the word hybrid, hybrid work workplace, you know work in the office three days a week, work from home twice a week or some mix of both.

And so that's really taking, you know, I mean after labor real estate is a company's biggest expense.

So that's taking, a lot of companies are taking a hard look at their footprint and can we negotiate out of a deal or is our lease about to expire?

Should we downsize?

We saw Grant Thornton earlier this year has been an Uptown tenant for a long time, reduce their footprint by 44% with their move to South Bend.

And now Duke Energy slashing their footprint by 60%, exiting Duke Energy Center and they already had that 40 story building, were set to anchor it and fill that whole building before the pandemic.

And that will become their new headquarters and pretty much their main headquarters building.

They're exiting their old building on Church Street.

They're exiting another building in Uptown.

Eventually they'll leave a building in South Park.

So it's really a consolidation measure, but Jeff I think you're right.

It really begs the question of, well, what are the banks gonna do?

I mean, what are Uptown's other major employers gonna do in the coming years and the coming months?

You know, I think, you know Wells Fargo does own the Duke Energy Center and says we intend to backfill Duke Energy at least some of their floors.

So they have an idea of taking more space, but you know, I think it's gonna be a really interesting thing to watch.

- Yeah, and it's hard to put the genie back in the bottle after people have experienced working from home for more than a year.

And if you look at survey after survey, employees are saying that, hey, I want to have a hybrid work schedule.

You know, that it works good for me that where I can have that flexibility and have those options.

So and I guess people have found out that by people working from home, that may be they get more from their employees when they're able to have that flexibility and those options.

So, hey, that genie is out of the bottle.

- And, you know, it really could have effects beyond just commercial real estate landlords.

You know, we're talking about where are the people who still restaurants at lunch?

What happens if Uptown's daytime population never gets back to the same level?

What is our commute look like?

How does this influence how we need to build the transit system, the eight to $12 billion that Charlotte is considering right now?

You know, do we still need that exact same kind of network designed to bring people into the city in the morning and out at the afternoon?

So there's a lot of ripple effects.

- Well, let's just say the paradigm is shifting.

I remember 30 years ago when they were talking about that IMK came in and was designing or more than 30 years ago what is now the Bank of America Tower.

And, you know, he talked about density being critical to a city's growth and having the density in that center city, where you can have people walk from one place to another and be out on the streets create all that energy.

Models change, changing I think as we see, and if you've been Uptown in the last six, eight months, it's not what it used to be now, is it necessarily gone?

No, but it's going to be different just like Duke Energy is now sort of pioneering.

- And Atrium Health cut 10% of their office space.

I think companies Uptown, whatever can adjust to that level, if a bunch more companies cut 60% of their office space, that's a whole different ball game.

- Yeah, that's huge.

- Duke is a legacy employer.

And I think a lot of folks wondering what the legacy employers like Bank of America and Wells would do next.

Someone had to take that first step and Duke's taken it.

So let's begin- - And just one quick thing, 60% of Uptown is leased to five tenants.

So that says everything I think - By the way- - And this is one of them.

- To follow up on Elly's point, Ron Tober the former CEO or CATS often considered the godfather of light rail because of his leadership during that period, even he's saying maybe we need to take a step back and see what happens over the next year or two before launch another big rail building plan not necessarily what he'd like to do, but maybe what needs to be done, hard to argue against that right now.

That's what the former CATS chairman is telling folks recently after the Duke Power move as a matter of fact but the good news is that Charlotte's still obviously a destination for companies in particular tech companies and even more particularly FinTech companies, we heard about Credit Karma this week expanding their footprint, expanding their footprint in Charlotte and adding jobs and I guess prestige to the city as a tech city.

- Yeah, 600 new jobs over the next five to six years, a 13 million or so an investment.

And I actually, you know the CEO was on the call this week, Kenneth Lin.

And I did ask him about remote work and how that might influence their real estate and hiring because those 600 jobs are Charlotte jobs.

And he said, you know, of course we value being in the office and everything, but I will say Jeff, as we kind of build on Robin Hood and Credit Karma and whatever else may be coming in the pipeline, it really is something that economic developers are seizing on.

Like we're becoming this FinTech capital of the world, of Charlotte, of the United States.

And they're really hoping to kind of build on that momentum and energy.

I think it's going to be interesting though to see as we kind of bring in more of these employers what that war for talent among these companies is gonna look like because even though we have, 121 people moving to the region every day, it's a lot of competition for talent.

So I think that will be interesting but definitely exciting for Charlotte and good to see.

- Yeah, and they're locating in Ballantyne by the way, where they are now not Uptown.

So I guess a while the Uptown market wonders what the future's like, obviously the suburban markets are still doing quite well.

And as long as we can continue to attract companies like that, I guess that will help make up for the, you know, the pull back on some of our existing employers.

- Yeah and it's just so interesting as we talk about education you know, they say that one of the reasons why they're coming is because the technical talent is here in this area.

And I guess I was talking to one leader and him saying that we need to really appreciate what we have here in Charlotte.

We have a good airport and it's good to be in a place where people want to come.

So that shows that it ain't all bad, right?

- You know, whether or not you have everybody in the office, all these people who work for your company have to live somewhere.

And so if you're a California based company and you're gonna expand and you want to have an East Coast, you wanna find a place that's affordable because frankly you don't have to pay your people as much to live there, right?

The salaries are commensurate with the cost of living, our cost of living still pretty reasonable despite recent real estate increases.

I think pretty reasonable.

So it does make some sense, even if you don't pull everybody into the office everyday.

- Dedrick mentioned the airport, just wanna touch real quickly.

The airport looks like it'll be back to pre-pandemic levels this Memorial Day weekend, which is great news for the airport and for the travel industry and Race weekend out at the Speedway, they're expecting the biggest crowd in Northwest South Carolina since the beginning of the pandemic, at least 50,000 for the race.

It all is starting to feel a little bit normal again, isn't it folks?

- Yep, show up early this summer for your flights, that's what they're saying.

- Labor shortages even at the airport.

(speaker laughing) - And they're actually gonna have a section of the track, the grand stand that's gonna be devoted to a vaccination center.

So you'll be able to go to the track this weekend and get vaccinated if you're also going to the race.

I'm not sure how that works exactly.

But thank goodness they didn't put it in the infield I guess the.

(speakers laughing) - Tracks and vaccs.

- Tracks and vaccs.

- And I guess all of that shows that everybody is trying to get on the same page about the importance of getting vaccinated and that the benefits of becoming vaccinated.

If you're not, if you are vaccinated, fully vaccinate you don't have to wear a mask and things like that.

So, you know, so hopefully we'll see if all of these extra stuff is that we're gonna boost the numbers when it comes to how many people will get fully vaccinate.

- And the optics are important.

You're gonna have how many people?

Could be a hundred thousand plus people in the stands and in our time, we're still not over this thing.

And if you have a small number of people getting vaccinated, you can say, well, look, we, yeah, we put a hundred thousand people on stands but we also are offering vaccinations.

I think the optics would.

- Yup.

- By the way the Panthers also will be reopening this coming season to 100% capacity.

And Carolyn's is back open again too.

So two more steps in the right direction to getting back to normal.

We're about out of time but I wanted to thank our normal gang for being here this week.

Appreciate your, the being with us as always.

And again, if you're at home and you ever wanna join us either before or after the show, just to send your comments to offtherecord@wtvi.org.

Thanks for joining us this week on, Off the Record.

And we'll see you next time.

(upbeat music) - [Narrator] A production of PBS Charlotte.