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Charlotte

Tight money squeezes condos 

Three years ago, downtown Charlotte’s condo market was cooking. At least seven developers had high-rise projects planned or under way (Skyline Drive, June 2005). But one of four things, local real-estate marketer Emma Littlejohn warned, could cool things off: shrinking demand, higher interest rates, increased construction costs or cautious lenders.

All four have been felt, but it’s the last factor that has hindered Queen City developers, just as it has their peers across the state and nation. Several projects are on hold for various reasons, usually financial, and a 22-story tower went into foreclosure and was auctioned at the Mecklenburg County courthouse. Three contractors forced The Park into bankruptcy to delay the sale and recover $1.8 million they claim they’re owed.

Carl Felson of developer Verna and Associates declined comment on what happened. In 2005, the project’s estimated completion date was late 2006, but it’s only 70% complete, according to court papers filed in August by the project’s lender, Madison, Wisc.-based BB Syndication Services. When the developer stopped making payments earlier this year, $28.1 million of the $30.7 million loan had not been repaid.

The Park is the worst symptom of a market under stress, Littlejohn says. “It’s just sad. It’s a marketable project. He has people that want to buy, and it’s a good location. It’s just unfortunate that it took him so long, and he didn’t get the project completed.”

Lenders beset by rising loan losses have changed their equity requirements, and financing costs have risen in the past few years, she says. “The numbers just don’t work. The cost of doing business is too much. There’s no profit left in these deals.” There might be more pain to come.

Wachovia, the nation’s fourth-largest bank and employer of many downtown residents, recently announced nearly 7,000 layoffs. “They’re cleaning house, and people are going to be losing jobs, which will affect demand. And it’s also psychological because its such a big part of the downtown office market and everything else.”

Sweet Charity

After news of its president’s hefty compensation ignited a public firestorm, the United Way of Central Carolinas board gave Gloria Pace King 30 days to resign or be fired, notwithstanding that the board — a who’s who of the Queen City’s business elite — had approved the pay package. Her ouster will cost the nonprofit plenty. Unless she gets another job, it will have to pay King her $275,000 annual salary for the two years left on her contract. And if she and her lawyer have their way, it will have to fork over retirement benefits estimated at about $500,000 a year for three years. Plus it’s paying retired bank executive Mac Everett $20,000 a month — “It’s a full- time job,” he told The Charlotte Observer — to pinch-hit while it searches for a permanent replacement. His gig is limited to four months. Everett gave the United Way a rebate of sorts by pledging $20,000 to this year’s fund drive. That won’t come close to replacing contributions the fiasco is expected to lose in this fall’s campaign.

 

CHARLOTTE Time Warner Cable plans to spend nearly $3.7 million to expand and add almost 200 jobs within four years. That will give it more than 1,000 here. The New York-based cable-television provider is eligible for nearly $3.2 million in state incentives over the next decade.

CHARLOTTETIAA-CREF cut 158 local jobs as part of a companywide cost-cutting effort. The New York-based pension giant still employs more than 2,800 here.

KANNAPOLISHarmony Labs, which makes skin-care products, says it will expand its factory and add 50 jobs by the end of 2009. That would bring employment to about 275. Kannapolis approved $43,000 in incentives.

CHARLOTTE — Fluor, an Irving, Texas, engineering and construction contractor, plans to add 100 employees by February. That will bring employment here to about 280.

MOUNT HOLLY — Portland, Ore.-based Daimler Trucks North America will cut 675 jobs this month — leaving 470 — because of decreased demand for medium-duty trucks. On the bright side, about 650 of the 1,500 workers laid off in June from its truck factory in Cleveland were recalled because of an increase in orders. That will boost employment there to about 1,985.

CHARLOTTENucor bought Auburn, Ind.-based Ambassador Steel for $185 million in cash and $136 million in debt retirement. Because of growing demand for rebar in the Southwest, the steel maker also plans to spend $30 million to start production in a mill it bought five years ago in Kingman, Ariz.

CHARLOTTEMecklenburg County hired John Allen as its first economic-development director. Allen, who will be paid $96,000 a year, had been filling the same role in Winston-Salem.

CHARLOTTECato promoted John Howe, 46, to chief financial officer. He has worked for the women’s apparel company since 1986, most recently as controller, and has been interim CFO since Tom Stoltz resigned in April.

KANNAPOLIS — Defunct textile maker Pillowtex reached a settlement with Concord, Kannapolis and Cabarrus County on back property taxes. It will pay about $550,000, instead of the $1.75 million it owes.

CHARLOTTETree.com, formerly LendingTree, was spun off by New York-based IAC/InterActive, which bought it in 2003. Founder Doug Lebda is CEO of the online mortgage marketplace.

CHARLOTTECogdell Spencer, a real-estate investment trust, will team with Milwaukee-based Northwestern Mutual to buy medical-office buildings. The two could spend up to $350 million nationwide.

GASTONIAPSNC Energy compromised with consumer advocates and will ask to raise the typical residential natural-gas bill by 0.11% — or 28 cents a month — rather than the 3% proposed in March. If approved by the state Utilities Commission, the increase could take effect Nov. 1.

CHARLOTTEWachovia plans to open its first branch in downtown Los Angeles early next year. It plans to open 30 branches in California this year and about that many in California, Arizona and Nevada in 2009.

CHARLOTTEMedCath, which builds and operates heart hospitals, will add weight-loss surgery and other procedures to expand its busi- ness. It will build larger hospitals with more than 100 beds.

GASTONIA — Gaston Memorial Hospital will continue to collaborate with two larger hospital systems nearby but will not merge with either. It heard proposals from Winston-Salem-based Novant Health and Charlotte-based Carolinas HealthCare System.

HICKORYDiversified Structural Composites doubled its work force to 30. The Erlanger, Ky.-based company makes parts for wind turbines and fiberglass sheets for marine products.

GASTONIA — Gaston The city won’t sell its golf course to Richard Duffie, who has been course director since 1995. It considered the sale to shed a $150,000 annual subsidy of the course.