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Another New Charlotte Unified Development Ordinance (UDO) Text Amendment Filed, More on the Way

New UDO Text Amendment

During last night's Charlotte City Council Business meeting, Planning Director Alyson Craig announced the filing of a new text amendment aimed at tightening rules for Conservation Developments.  The amendment will include the following:

  • Require an additional 15% tree save (green area) = 40% Total
  • Increase minimum project size to 5 acres
  • Increase minimum dimensions of open space
  • Increase standards for useable open space
  • Add additional perimeter buffer requirements
  • Require lots to front public streets or open space (not private streets or alleys)

The initial proposal (virtually identical to the one offered last night) was presented at the March 7th meeting of the UDO Advisory Committee where a more comprehensive presentation was provided.  As was earlier reported, this elicited a rather spirited discussion among committee members both through regular conversation as well as virtual chat.

This particular change appears to be on the fast track as the schedule is as follows:

  • March 28th UDO Advisory Committee
  • April 9th Planning Commission
  • April 30th Zoning Committee
  • May 20 Council Vote

We have submitted multiple comments on the above proposal and will reiterate those concerns during Thursday's UDO Advisory Committee meeting.   

Duplex/Triplex Issue

Two additional recommendations were also offered during last night's session:

#1 Prioritize New Housing Supply in Key Locations - Create a Compact Development Option for new residential subdivisions 2+ Acres     



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Congress Passes Spending Bill; Challenges Ahead for House Speaker

Originally published on March 26, 2024, by NAIOP.

Six months into the 2024 fiscal year, Congress passed a final $1.2 trillion funding agreement and President Joe Biden signed it into law. The package was approved by the House (286-134) and Senate (74-24) before going to the White House on Saturday. It will keep the federal government operating until Sept. 30, 2024.

On the eve of the spring Congressional recess, Rep. Ken Buck (R-CO) officially resigned from the House and Rep. Mike Gallagher (R-WI) announced that his resignation will be effective April 19. These developments will leave House Speaker Mike Johnson (R-LA) with a slim 217-213 majority, but that may not be the worst of his problems, as Rep. Marjorie Taylor Greene (R-GA) filed a motion to “vacate the chair” (remove the speaker) just before she left town. If the Democratic minority supports Greene’s motion, Johnson will have to secure unanimous opposition from the rest of the Republican Conference to save his leadership role.

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Industrial Space Demand Forecast, First Quarter 2024

Originally published on March 2024 by Hany Guirguis, Ph.D., Manhattan College and Joshua Harris, Ph.D., Fordham University for NAIOP.

With the U.S. economy expected to continue to grow slowly, the authors estimate that quarterly net absorption of industrial space will average 14.0 million square feet per quarter over the next two years, or 62.8 and 49.1 million square feet in 2024 and 2025, respectively. This forecast represents a relative “cooling” trend following what had been a protracted period of above-average industrial absorption following COVID-era demand shifts that accelerated the need for distribution space to meet consumers’ increased preference for home delivery. As such, the projected slowdown in net absorption reflects more of a “return to normal” than a negative outlook for occupiers of industrial real estate.

The Industrial Market

After two years of absorption that significantly exceeded long-term averages, industrial net absorption in 2023 totaled just 93.7 million square feet compared with a record high of 486.6 million square feet of completions. While such a supply and demand imbalance is usually a cause for concern, the effect has been to bring balance back to an industrial market that had been substantially undersupplied since 2020.

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From Historic Mill to Vibrant Mixed-use Community

Originally published for the Spring 2024 Issue of NAIOP Development Magazine by Anthony Paletta.

The Judson Mill District honors Greenville, South Carolina’s rich textile manufacturing history as it weaves a new plan for the future.

Greenville, South Carolina, once styled itself the “Textile Capital of the World.” While it might be difficult to quantify that superlative, there’s no question this small city along the Reedy River in the foothills of the Blue Ridge Mountains had ample claim to being one of them.

The city and its surrounding landscape once contained 18 textile mills, only two of which remain operational today. Four of the mills burned down or were demolished, but the rest remain standing, and they have proved to be excellent fabric for reuse. At least nine have been converted to new functions, including residential, office, and mixed-use. The most recent conversion is Judson Mill, an 800,000-square-foot complex that has returned to life as a mixed-use project containing apartments, retail, offices, and more.

A Century of Industrial History

Adaptive reuse is often an undertaking for buildings that have long sat dusty, but this wasn’t the case at Judson Mill, which produced textiles from 1912 until 2015. Renovation of the mill began in 2019 as a project of Belmont Sayre Holdings of Chapel Hill, North Carolina, and Taft Family Ventures of Greenville, North Carolina. The project was designed by the Greenville, South Carolina, studio of McMillan Pazdan Smith Architecture.

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States are at the Forefront of Transportation Electrification Infrastructure

Originally published on February 15, 2024, by Toby Burke for NAIOP.

The transportation sector accounts for 28% of greenhouse gas emissions – the highest percentage of any sector, reports the U.S. Environmental Protection Agency. The result of this has been greater public and private sector demand and interest in a national network of charging stations to support the use of more electric vehicles (EVs), including trucks, also known as transportation electrification.

During NAIOP’s Chapter Leadership and Legislative Retreat this week in Washington, D.C., chapter leaders and staff attended a session that recognized the leading role of state governments in establishing a national network of public EV charging stations following the passage of the bipartisan Infrastructure Investment and Jobs Act of 2021. Anne Blair, vice president of policy at the Electrification Coalition, highlighted this and its impact on the commercial real estate industry following the allocation of $7.5 billion from the federal act to establish this national network. The federal allocation is broken into two parts: $5 billion for states under a national EV infrastructure (NEVI) formula and $2.5 billion in charging and fueling infrastructure (CFI) grants.

After stating the case for transportation electrification as a cleaner alternative to oil-based fuels, Blair provided an overview of federal funding investments in the manufacturing and production of EV materials, such as battery production in the southeastern states. Her presentation also included a review of available grant and tax credit programs for heavy-duty trucks and port operations.

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From Vacant to Vibrant: Repurposing Retail Spaces for Healthcare

Originally published on February 28, 2024, by Brian Kane for NAIOP.

As the retail landscape continues to evolve with some well-known retailers declaring bankruptcy or streamlining their real estate portfolios, it doesn’t have to signal a loss for the surrounding community. The opposite is true. People increasingly want their healthcare brought closer to home, and with these abandoned spaces comes opportunity.

According to a report from CBS News, in 2023, retailers across the country shuttered more than 4,600 locations – an 80% increase from 2022. Leading the pack on these closures was Bed Bath & Beyond, which went bankrupt in April 2023 and subsequently closed 866 stores across all three of its brands. Discount home goods retailer Tuesday Morning filed for bankruptcy and shuttered 463 stores, Foot Locker closed 116 stores, and drugstore brands Rite Aid, CVS, and Walgreens closed a whopping 807 locations combined. Even big box titan Walmart wasn’t safe from the scourge of cutbacks, ultimately closing 21 stores across 12 states last year.

But from the dust of retail giants comes opportunity for healthcare systems looking to expand, grow, and better embed themselves in the communities they serve. While new construction in healthcare has slowed with the rise of lending and construction costs, many healthcare companies are finding that converting vacated retail space can be an affordable alternative to building a ground-up facility, and at the same time offer patients easier, more convenient access to the healthcare services they need.

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Industrial Construction Report: Manufacturing Takes Center Stage

Originally published on March 4, 2024, by Lucian Alixanderescu for NAIOP.

For the last few years, industrial real estate development has been on a tear, thanks to elevated demand for warehouse space. Specifically, increased demand for e-commerce – in conjunction with logistical difficulties – led companies to break ground on massive logistics and distribution centers. Now, with warehouse space vacancies normalizing and speculative projects slowing down, CommercialCafe highlighted the next trend taking hold in industrial space construction: manufacturing facilities, particularly for electric vehicles (EVs) and semiconductors.

In a study analyzing the current state of industrial real estate construction and the current pipeline, CommercialCafe highlighted which markets have the most industrial space underway, as well as the largest projects slated for completion in 2024.

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Predicting the Path of the Supply Chain

Originally published on March 12, 2024, by Kathryn Atkins for NAIOP.

When J.C. Renshaw, head of supply chain consulting North America for Savills, started his career 35 years ago, supply chains had not been invented. Okay, they were there, but it was when the COVID-19 pandemic hit that “supply chain” became a household phrase – especially for people who were late to their local retailer to purchase toilet tissue. For the layperson, and even those in the industry struggling to manage their unwieldy supply chain, the definition is the same: getting the right “stuff” to the right place at the right time. Simply said, not easily done. 

In his discussion, Renshaw set the stage for where we are now, covered some of the current megatrends challenging supply chains, and discussed the many countervailing and interwoven forces at work. The goal is to find and wield the magic wand that will result in even the smallest competitive edge in the marketplace. 

From labor shortages, retention issues, and rising costs to international transit through the Suez and Panama Canals, and huge fluctuations in inventory level requirements, supply chain leaders have their hands full. While port volumes and congestion have normalized, huge ports (Los Angeles and Long Beach, and New York/New Jersey) find themselves competing for business – and port incentives are a novel approach the industry has had to embrace.  

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Evolving Sustainability Regulations in Industrial CRE

Originally published on March 13, 2024, by Jennifer Lefurgy, Ph.D., for NAIOP.

Understanding the ever-evolving regulations and reporting requirements around ESG can be challenging. A panel of industry experts spoke to I.CON West attendees on why these regulations are about more than compliance. They can lead to market differentiation, improved communication with tenants, and interest from global investors. 

Moderator Megan Krest, associate director of ESG at Cushman & Wakefield, asked the panelists about their work in California involving reporting and compliance. Ethan Gilbert, director of global ESG at Prologis, discussed AB 802, a California law requiring buildings over 50,000 square feet to submit annual energy consumption data to the state. 

“It’s a challenge because most industrial owners are operating under a triple net lease model, so utilities are under the direct control of our tenants,” he said. “The usage is not something the landlords have insight into, yet the state holds us accountable.” 

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Industrial Outdoor Storage: Tips for Making these Unique Sites Succeed

Originally published on March 13, 2024, by Kathryn Hamilton, CAE for NAIOP.

Primarily used for the storage of trucks, trailers, containers, large equipment and materials, industrial outdoor storage (IOS) is a unique property type that comes with its share of challenges. A panel of IOS experts took the stage at I.CON West this week in Long Beach, California, to walk attendees through the pressures of this industrial-zoned land and why it’s important to an overall logistics portfolio. 

Moderated by Matthew Goelzer, AIA, LEED AP, principal with MG2, panelists included Jennifer Hall, partner, LIDD Consultants Inc.; James Hooks, senior vice president, CBRE; Michael Landsburg, chief development officer, NFI Real Estate; and Richard Weiss, senior vice president, Dalfen Industrial. 

Here are takeaways from their conversation: 

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AI and Technology in Industrial Development

Originally published on March 13, 2024, by Kathryn Atkins for NAIOP.

How do you know if you are optimizing the space in all your properties worldwide? How long would that take you to figure out with your current analytical tools?  

While everyone might think they know what AI is, a session at I.CON West this week in Long Beach, California, did the job of defining it. Taylor Odegard, founder, CEO, chairman and head of innovation for NavigatorCRE, said that AI needs two things before it can be defined as such: data analytics and machine learning. AI learns from each of these to deliver its “product.” 

For William O’Donnell, managing partner with Prologis Ventures, AI helps them optimize their decision-making, customer engagement, and operating efficiency. Clifton Harness, CEO and co-founder, TestFit, Inc., jumped in with a real-life example: How could their client mitigate the parking problem where parking spaces are laid out effectively, minimizing land use, while avoiding banging car doors and fender-benders? Using AI algorithms, the problem went from “If we cut off two inches on each side…” to “What do people do in the building for which we’re designing this parking lot? What does each end user say about the size of the parking spaces? Doesn’t Costco need wider spaces than the local movie theater? If it’s a hospital, then what? Is it a shopping mall?” 

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Health and Wellness in Industrial Buildings

Originally published on March 13, 2024, by Jennifer Lefurgy, Ph.D., for NAIOP.

Warehouses used to be spartan, utilitarian production and storage spaces. The emphasis was on throughput and convenience. However, some companies are incorporating human-centric features focused on wellness to capture market differentiation, increase employee retention and impact productivity. Authors of the recent NAIOP Research Foundation report, Designing for Wellness in Distribution Centers, spoke to I.CON West attendees about their design ideas, and an end user who has incorporated wellness standards in their facilities. 

Why Design for Wellness? 

Nate Maniktala, principal at BranchPattern, Inc. stated that workforce retention is a top priority for warehouse tenants. If developers can leverage design to support that goal, there’s an opportunity. Between 2020 and 2023, there was a 50% increase in the number of people who work in a warehouse in the United States. Warehouses can be dangerous places and thoughtful design can help mitigate these impacts. 

“Typically, we think of wellness as individual wellbeing, physical health, mental health… but it also incorporates spiritual health and how individuals within an environment interact with one another,” said Maniktala. Other concerns are air quality, acoustical and visual properties, and thermal comfort. 

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Western States Take Up Permit Reform

Originally published on March 20, 2024, by Toby Burke for NAIOP.

NAIOP members know that the procurement of a local permit is a fundamental and essential part of commercial real estate development in providing communities with properties for people to live, work and play. However, local permitting processes vary and too often become unnecessarily delayed. These variations and delays lead to uncertainties that affect the development’s completion, the financing structure, the retention of contractors, resources and equipment, and, ultimately, the cost for the owner, tenant and end-user.

Because of this, NAIOP chapters across the U.S. are using Georgia’s legislation as a template in advocating for reforms that bring predictability, consistency and transparency to the local permitting processes within their respective states. Key features of the state’s reforms include:

  • All local jurisdictions must publish the time frame for review, and the requirements for a permitting application to be deemed complete;
  • The fee charged for the permit must be related to the cost of approving a permit and not a revenue source for other government services and programs;
  • Jurisdictions must notify an applicant within five days of submitting an application if it is deemed complete, and then make a decision within 30 days;
  • If a jurisdiction is unable to make a decision in 30 days, the applicant may seek approval from a certified third party, such as a licensed architect or engineer (at the applicant’s expense) with half the local fee redirected to the third-party reviewer; and
  • Inspections must be performed within two days of the developer’s request. Similar to the permitting process, the developer may seek third-party approval if the local governing entity is unable.
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ESG and Decarbonization Strategies for Industrial and Logistics Properties

Originally published on March 13, 2024, by Marie Ruff for NAIOP.

“Developers are prioritizing projects that go beyond standard building codes to deliver high-performance buildings,” said Grant Waldron, director of sustainability strategy, GAIA, moderator of a panel on ESG (environmental, sustainability and governance) and decarbonization strategies at I.CON West in Long Beach, California. He identified ESG reporting and requirements, tenant demands, operational savings and capital markets as factors driving change. 

“What excites me about ESG is that as developers, we get to communicate all the things we’re already doing well,” said Josh Cox, LEED AP, senior vice president, development, Hillwood Investment Properties. For Hillwood, this includes steps like pursuing USGBC LEED certification to have third-party verification that can communicate the company’s strong environmental and sustainability commitment.  

While the environmental piece of ESG often takes center stage, the panelists talked about volunteering as part of the social component of ESG. “It’s phenomenal what you can do for your community, with your community,” said Erin Thrash, vice president, of architecture and design, Rexford Industrial Realty, Inc. Rexford bought a hotel that the company is going to turn into an industrial facility; the company opened the doors to 11 charities for a “shopping experience” where they picked up 4,000 items from the property including linens, dishwashers, pizza ovens and more. “All of these items would have been things that we might have had to pay to demo, but instead we gave that all back to the community.” 

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REBIC Hosting Transportation Event With Region's Mayors

Please mark your calendars for our upcoming event on April 9th where we'll be hearing from several mayors from the area about their vision for mobility and connectivity within the Charlotte region.  Come and learn how to support advocacy in transportation policy and public-private partnerships.  Moderated by Tracy Montross with American Airlines, this is a can't miss event.  

Please RSVP by March 31, 2024, to [email protected]
Location:  Canopy Building, 2nd Floor, 1120 Pearl Park Way, Charlotte, NC

New Charlotte Unified Development Ordinance (UDO) Text Amendment Filed, More on the Way

New UDO Text Amendment

Last Monday, March 5th, planning staff filed a new text amendment they refer to as a "clean-up" amendment to "provide greater clarity" for users.  Also included are updated definitions, use permissions and prescribed conditions, revised names, and changes to standards.  This amendment incorporates some, but not all of the recommendations suggested through the UDO Change Request Form process REBIC developed last July.  City staff plans to hold informational sessions in April with a hearing anticipated in May and a vote in June.   We'll provide more details on the proposed amendment in next week's edition.          

Changes to Conservation Subdivisions Discussed

During last week's Transportation, Planning, & Development Committee, staff provided a presentation to the committee that mentioned the text amendment referenced above but also described a new proposal aimed at tightening rules for Conservation Developments.  The suggested changes included the following:
  • Require an additional 15% tree save (green area) = 40%
  • Open space cannot be on individual lots
  • Increased minimum dimensions of open space
  • Increased standards for useable open space
  • Add additional perimeter buffer (landscape yard) requirements
  • Require lots to front public streets or open spaces (not private streets or alleys)

This proposal was introduced at Thursday's UDO Advisory Committee meeting where a more comprehensive presentation was provided.  This elicited a rather spirited discussion among committee members both through regular conversation as well as virtual chat.  While a new amendment was slated for introduction this week, it appears that has been pushed back to allow for additional input.     

Duplex/Triplex Issue

During the two meetings before last Thursday's session, the UDO Advisory Committee received presentations on potential changes related to parking and driveway standards for duplexes and triplexes on infill lots as well as the potential for changes in regulations for larger lot subdivisions.  Those meetings occurred on February 15th and February 22nd but no formal proposals have yet been forthcoming. 

Tree Manual Revisions

Comments on the proposed Tree Manual revisions are being accepted through the end of today, March 12th.  Please take a look and submit any recommendations to [email protected]

Area Planning Process

A presentation was also provided to committee members on the Community Area Planning process during last week's Transportation, Planning, & Development Committee.  A new Policy Map was just released a little while ago.  Staff still believes it can complete its work and be ready to request a council vote on the final product by early next year.

2024 Talent Recruitment and Compensation Trends Webinar

2024 Talent Recruitment and Compensation Trends
March 19, 2024 | 2:00PM | Virtual

Talent has become the number one issue affecting companies today. Examine the biggest trends in commercial real estate employment so you can make more strategic hiring and business decisions. Join these experts for a discussion on how current market conditions and the pandemic have reshaped the talent management industry, recent findings on industry employment trends and compensation, recruitment and retention tactics, and the future of the commercial real estate workforce. We will start with a presentation on compensation, benefit, and talent recruitment trends and then move to a discussion on these and other employment trends.

Moderator:
Andrew Hunt, Vieth Director, Center for Real Estate, Marquette University

Speakers:
Christopher Lee, President and CEO, CEL & Associates
Ryan Neale, Managing Director, SelectLeaders

Register Now

Thanks to our sponsor:

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Powerhouse Legislative Lineup Visits REBIC

Regulatory reform was at the top of the agenda during yesterday‘s visit from North Carolina Senate President Pro Tem Phil Berger and House Speaker Tim Moore.  Also in attendance were Senator Dave Craven and Senator Brad Overcash.  We also welcomed House Senior Appropriations Chair Jason Saine who is responsible for developing and gaining approval of the State Budget.  What were the highlights?  The General Assembly members agreed to continue to strategically streamline and simplify the regulatory process aimed at making housing more attainable.  They also mentioned their efforts to provide continued regulatory relief, and the expansion of water and sewer capacity through additional funding to aid growing municipalities intelligently handle the influx of people choosing the Charlotte region as their new home.

Several industry leaders at the event brought up the subject of tax abatement strategies in other states, and how it is being successfully utilized to provide workforce and affordable housing, adding solid reasons why we need to explore its benefits more ardently here.  Our guests expressed great interest in learning more about that solution and requested additional details.  As such, we are enlisting assistance in putting together a presentation on how tax abatement works, specifically when scaled.  We will note where it is being successfully utilized and include some examples of projects that have been built using this tool.  The next step will be developing a detailed strategy that will include specific policy recommendations for future action at the General Assembly level. 

Our Premier Members enjoyed and appreciated the direct access we received from these key members of the House and Senate who took their time to address matters of importance to the industry.  We look forward to the next opportunity to check in with this group and we thank them for their continued support and leadership that has resulted, among other things, in North Carolina being the top place to do business in the country.

Charlotte Urban Forestry's Proposed Tree Manual Revisions Released

Charlotte's Urban Forestry Department has just published proposed changes to the Charlotte Tree Manual.  Some of these updates, which provide additional flexibility for builders and developers are targeted for review and will likely make their way into the regulatory framework already established under the Unified Development Ordinance (UDO).  As these updates were just introduced yesterday, we are still in the process of completing our analysis.  Stay tuned for updates! 

Draft Charlotte Tree Manual Proposal
Submit Comments on Draft Tree Manual
(Now until March 12, 2024)

RECAP: 2024 NAIOP NC Conference

That’s a wrap on the 2024 NAIOP NC Conference! Hosted by NAIOP CharlotteNAIOP Raleigh Durham, and NAIOP Piedmont Triad
400+ CRE professionals met in Pinehurst last week to hear the latest on economic and real estate trends in NC.

Congratulations to the 2024 Project of the Year Award Winners! Take a closer look at each project here: https://lnkd.in/gFCxnR7x

New Development Project of the Year: 2151 Hawkins - The Line in Charlotte, NC (submitted by Gensler)
Redevelopment Project of the Year: Camp North End in Charlotte, NC (submitted by BB+M Architecture)
Industrial Project of the Year: Western Carolina Energy Production Facility in Cullowhee, NC (submitted by The Christman Company)

Thank you to our event sponsors for your support!

Presenting: LS3P ASSOCIATES LTD.
Lunch: Merritt Properties, LLC | Metromont
Conference Refresher: Schell Bray PLLC
Taste of Pinehurst Reception: McAdams | McMillan Pazdan Smith Architecture
Supporting: Cline Design
Lanyard: Bolton & Menk, Inc.
Wi-Fi: Kilpatrick Townsend & Stockton LLP
Room Key Card: Choate Construction Company
Sessions: ECS Limited | Elliott Davis | JDAVIS | MCI - Mechanical Contractors, LLC | Windsor Commercial
Meeting Break: Akerman LLP | Bohler | First & Early Partners | Samet Corporation | Strategic Connections, Inc. | V3 Companies

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