North Carolina offered more than double the state incentives that real estate research firm CoStar Group ultimately accepted from the state of Virginia to open a major new facility in Richmond, according to documents obtained by the Observer Thursday.
CoStar had zeroed in on a location in Charlotte, but its board decided against the move because of opposition to the state’s controversial House Bill 2, which limits protections for LGBT individuals, sources have told the Observer. The project would have brought 732 high-paying jobs here over next three years.
A Sept. 12 proposal for the project – code named “Project Tiger” – shows CoStar had considered a $13 million investment in Charlotte for a new facility, which it was considering owning or leasing. The proposal shows that the state would have offered about $8.3 million in tax incentives paid out over 12 years for the project, plus about $1.1 million for customized job training.
Virginia Gov. Terry McAuliffe approved a $4 million grant for the project, among other incentives, according to a news release this week. Those other incentives included customized job training, without a dollar amount specified.
The average annual salary of the jobs brought to Charlotte would have topped $56,000, according to a state form CoStar submitted. All of the jobs would have been new hires, with no relocations from other facilities, CoStar said.
$48,400 200 Tenant Research Associates
$55,000 424 Portfolio Research Associates
$82,500 71 Research Managers
$126,000 10 Research Directors
$171,600 3 Vice Presidents
$57,000 5 Reporting, GIS, Analytics, Ratings
$57,000 19 Other Admin/Supports
CoStar this week confirmed it had been considering Charlotte as a finalist for the expansion, along with Richmond, Atlanta and Kansas City, but declined to comment on why it picked Richmond. In a statement, however, the company said “the rights of every one of our employees and those in the community are a very high priority and core to our firm’s values.”
In its proposal, CoStar said it was seeking to open a new research center in a “mid-tier” market with lower-than-average cost of living, such as Charlotte, in order to lower its costs. The company was seeking a city with a “strong pool of millennials, in addition to seasoned professionals.”
The Economic Development Partnership of North Carolina, which recruits businesses to the state, did not respond to a request for comment Thursday. But on Wednesday, Chris Chung, the partnership’s executive director, acknowledged Charlotte was among the cities considered for the expansion.
“CoStar is a well-known company with a great product that many of us in the economic development and real estate fields are familiar with or use regularly,” said Chung, who did not comment on discussions with the company. “I wish them the best as they embark on this latest expansion they’ve announced and, of course, we welcome any opportunities to assist them as they contemplate additional growth plans and new locations in the future.”
Gov. Pat McCrory’s office did not respond to a request for comment Thursday.
The state documents list CoStar’s hiring plans by position, along with salaries. The company was planning to hire 200 tenant research associates at $48,400, 424 portfolio research associates at $55,000, 71 research managers at $82,500, 10 research directors at $126,00 and three vice presidents at $171,600, in addition to administrative personnel.
A letter from July showed that the city would have offered $100,383 in incentives for the project, and Mecklenburg County would have offered $171,053. The September proposal did not include the city and county incentives figures.
Sources familiar with the matter told the Observer this week that CoStar officials had earlier focused their search on a new office tower under construction at 615 S. College St. in uptown Charlotte, where it would have been an anchor tenant.
Real estate brokers, especially those leasing new office towers, have been anxious about the potential fallout from HB2 for months. About 1.5 million square feet of new office space is set to open in Charlotte within the next year or so, most of it speculative – meaning it’s being built without tenants already signed up. Out-of-state business relocations are often key to filling new, speculative office space, because they don’t just shuffle tenants around from existing buildings.
McCrory signed HB2 into law in March to overturn a Charlotte nondiscrimination ordinance supported by Charlotte Mayor Jennifer Roberts that would have allowed transgender individuals to use bathrooms that match their gender identity. Since HB2’s passage, Charlotte has lost major sporting events such as the 2017 NBA All-Star Game, concerts by major performers and business expansions such as a 400-job PayPal operations center.