Light rain falls on a lunchtime crowd as men in hard hats and reflective vests prowl a cluster of construction sites on the south side of downtown Charlotte. Metal clanks against metal. Cranes lift and lower objects next to a towering concrete skeleton half covered by glass skin. Another skyscraper rises in Banktown — even as the fortunes of its owner have fallen.
Once upon a time, business was so good for Wachovia Corp. that erecting a 48-story headquarters building didn’t raise many eyebrows. When a company nets billions of dollars a year, it usually gets the benefit of the doubt. So no serious opposition surfaced three years ago when the bank announced its $1 billion “cultural campus,” which will include two museums, an African-American cultural center and a theater paid for with public and private money.
But when loan losses and a nationwide credit crunch pushed Wachovia to the brink of bankruptcy in September, the campus that would showcase its success and deep involvement in Charlotte civic life began to look ill-timed at best and extravagant at worst. Work continued, though, and there are no plans to stop — yet. But what happens when San Francisco-based Wells Fargo & Co. closes its acquisition of Wachovia — it’s expected to later this year — is anybody’s guess. A Wells spokeswoman declined to comment.
Wachovia employs about 20,000 people in the Charlotte metro area and controls about 20% of the multitenant office space downtown, according to the Charlotte Chamber of Commerce. Wells told local leaders it will make Charlotte its East Coast headquarters, but nobody is sure what that means.
Gary Chesson, a partner in commercial real-estate broker Trinity Partners LLC, guesses Wells will cut about 2,000 Wachovia jobs in Charlotte as it eliminates duplicate headquarters jobs and likely will vacate about 500,000 of Wachovia’s 2.8 million square feet downtown. The job losses could more than double if Wells sells Wachovia’s investment-banking division. The Charlotte chamber estimates that for every 1,000 jobs lost in banking, the city will bleed 390 more in companies that do business with banks.
Trinity projects that the downtown office vacancy rate, 2.1% at the end of June, could rise to 7.5% in 2010. But Wachovia job losses might be offset by gains from Bank of America Corp.’s purchase of New York investment bank Merrill Lynch & Co. Wells probably won’t need all of the space it will acquire, but it’s likely to move into the new skyscraper and vacate Wachovia’s current headquarters, Chesson says. “They’re going to have an opportunity to put their name on top of the newest marquee tower in this market, anchored by the cultural campus. That will be the center of gravity for Wells Fargo in downtown.”