This past summer, Charlotte-based Simonini Builders Inc. received word that Professional Builder magazine, the bible of housing contractors, wanted to include the company in its hall of fame. That shouldn’t have been much of a surprise: Simonini has received numerous national awards and was the magazine’s builder of the year in 2006. But the company couldn’t decide if it should accept. It still hadn’t decided in September — when it announced it will fold by the end of the year.
Alan Simonini and Ray Killian Jr., who took over from Simonini’s dad in 1994, won’t say much about the causes. Simonini blames “catastrophic changes” in real estate. Industry insiders point fingers at a Charlotte economy — especially its housing market — that is sicker than civic cheerleaders let on. “If you look at the peak of the Charlotte market in 2006, the top 4% started at $850,000,” says Chuck Graham, principal of Charlotte-based Newton Graham Consultants Inc. and a Simonini consultant. “In 2006, Charlotte closed 800 new homes over $850,000. In the last 12 months, the top 4% of our market started at $550,000, and only 200 homes sold. The higher you go in the market, the more change you see.”
Simonini Builders also got caught in a trap partly of its own making. From the beginning, it staked its future on Charlotte’s silk-stocking housing market and banking economy, which by some estimates has lost 3,000 jobs worth $1 billion a year in wages since 2008.
But perhaps the biggest blow was the tightening of loan criteria by battered financial companies, says Karla Knotts, vice president of Knotts Development Resources Inc. in Charlotte. In a double whammy, Simonini’s lender — Wachovia Corp. — was among them, and it was simultaneously laying off employees who might have bought Simonini houses. “This spring was the first time in eight quarters — two years — that a jumbo loan was securitized in Charlotte,” Knotts says. In that market, she says, a loan is considered jumbo if it’s for more than $417,000, which means the buyer of a $1 million Simonini house would have to come up with nearly $600,000 on his own. Plus, Graham says, many of those potential buyers couldn’t sell their old homes elsewhere, and lenders had clammed up on high-dollar loans for speculative building.
Why not build cheaper houses? That would have required a change of business model, and the segment was already flooded — not to mention a step down for a builder that had copped national awards for swanky houses.
Knotts says she was surprised by the collapse of Charlotte’s housing market, but she isn’t surprised Simonini Builders was blindsided. “Their market was so dramatically affected by the credit market, their decision to close says more about the credit market than them as builders.”
CHARLOTTE — Belk changed its logo and tagline, the first major changes in its corporate brand identity in 43 years. Instead of “All for you!”, the department-store chain’s tagline is, “Modern. Southern. Style.” The $70 million rebranding is meant to attract new customers looking for updated brands and styles. Signs with new logos will go up in 60 stores by year-end and in the chain’s other 245 stores next year.
CHARLOTTE — Discount carrier Southwest Airlines could begin ser- vice here next year through its planned $1.4 billion purchase of AirTran Holdings, which has five daily flights at Charlotte/Douglas International Airport. Queen City air travelers have long hoped that Dallas-based Southwest would come in and push fares lower, but the effect might be muted because it is merely replacing AirTran’s already low fares and has few flights.
CONCORD — Charlotte Motor Speedway executives plan to turn the racetrack into a 2.5-mile drive-through Christmas-light show this year. They predict it will generate a $10.2 million economic impact and 80 seasonal jobs. “Carolina Christmas at Charlotte Motor Speedway” will run from Nov. 22 to Jan 2. Admission will be $20 per car to see the 500 light displays.
CHARLOTTE — New York-based private-equity firm Blackstone Group has agreed to buy Polymer Group, a public company that makes nonwoven fabric for medical uses, for $387.5 million — $18.16 per share. The stock had been trading above $20.
CHARLOTTE — UNC Chapel Hill plans to open a branch campus of its medical school here in fall 2013. The latest model, however, has been scaled down. Instead of 50 students training at Carolinas Medical Center, the new plan calls for 12.
CHARLOTTE — Todd Mansfield, chairman and CEO of Crosland, resigned after leading the real-estate development company 11 years. He didn’t say what he plans to do next. Chief Financial Officer Stephen Mauldin will succeed him as CEO; presiding director Paul Leonard will take over as chairman.
CHARLOTTE — North American Financial Holdings invested $175 million in a struggling Naples, Fla., bank. The bank holding company also reserved the right to invest another $175 million in TIB Financial, which has been losing money since 2007.
GASTONIA — The National Labor Relations Board ordered Stabilus to hold another vote on whether workers here want to organize. The German company’s local plant employs about 450 making pneumatic devices for automobiles and furniture. Workers voted against joining the United Auto Workers by narrow margin in 2004, but the NLRB found more than a dozen unfair labor practices.
CHARLOTTE — Online mortgage broker LendingTree sued four competitors, saying they are infringing on patents for its system of coordinating loans. The company wants compensation from Zillow, NexTag, Adchemy and QuinStreet for “lost profits.” It didn’t specify an amount.