AvidXChange, Dimensional Fund Advisors and Ballantyne developer Bissell are all building new office projects. What do they have in common? State and local tax incentives helped lure the companies whose growth is spurring construction.
Incentives are always a contentious subject. Many on the right side of the political spectrum don’t like incentives because they’re seen as government picking and choosing winners and distorting markets, while many on the left see incentives as corporate handouts to greedy corporations.
Supporters contend that companies invest more than they get back, making incentives a win for the state. And, they point out, everyone else is offering incentives, so not doing so on principle would shoot North Carolina in the foot.
But whatever your thoughts about incentives, they have helped to power some of the high-profile office projects being built around Charlotte. AvidXChange broke ground on a 200,000 square-foot headquarters Monday at the N.C. Music Factory. The company was offered offered state tax incentives worth more than $7.5 million to aid the company’s expansion in Charlotte, while the city of Charlotte and Mecklenburg County added $1.1 million.
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Dimensional Fund Advisors announced in July that it plans to build an East Coast hub in Charlotte, bringing 316 jobs. The company is building a new, 250,000-square-foot building in South End, where Food Truck Friday and the Common Market are located. The price tag: About $18 million worth of state and local incentives.
Bissell is building a new, 10-story office building in Ballantyne, due to the indirect effect of incentives. The office park is almost at full capacity, in part because MetLife opened a major hub and hired 1,500 people in Ballantyne. That’s prompted Bissell to start work on a new, speculative office building, which doesn’t have a tenant signed yet. MetLife was lured with a state incentives package that could bring the company more than $87 million.
And South Carolina isn’t shy about using incentives either. Lash Group and LPL Financial are both former Charlotte companies building big new headquarters buildings just over the state line, in Fort Mill.
That’s not to say all – or even most – of Charlotte’s office construction is being fueled by incentives. Lincoln Harris is building a pair of speculative office towers in SouthPark (they’ve now signed their first tenants) and Portman Holdings is building a spec building at 615 South College Street. Spectrum Properties is building a new tower at 300 South Tryon Street, anchored by Babson Capital Management.
And other office buildings, such as 500 East Morehead by Beacon Partners and Tryon Place by Crescent Communities, are underway without incentives luring any tenants.
So, while politicians are wrangling over how to recharge the state’s depleted incentives program – the House and Senate could reach a final decision this week – North Carolina economic developers and companies building office space are watching closely. They want to see if the state will pass an incentives program that helps draw more companies to fill new office buildings.