A fast-growing software company plans to add at least 600 workers and build a new headquarters at the N.C. Music Factory, stirring hopes for technology sector growth and redevelopment in that part of uptown.
AvidXchange, which automates bill payments and invoicing for mid-sized companies, will invest $20 million in the expansion project, Gov. Pat McCrory announced Monday.
Michael Praeger, CEO and co-founder of AvidXchange, said the firm currently employs about 200 at its headquarters at the Metropolitan near uptown, where it occupies three floors.
“We can’t get over there fast enough,” he said, referring to the planned campus at the N.C. Music Factory. “We’re busting at the seams.”
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The firm expects to hire about 150 workers per year for the next four to five years. Inc. Magazine ranked it the 20th fastest-growing company in the Charlotte area, and No. 197 among the nation’s fastest-growing software companies this year.
The new jobs will pay about $52,000 on average, officials said, and will include software developers, engineers, finance, research and development, and project management posts, among others.
A spokeswoman for McCrory said the state offered tax incentives worth more than $7.5 million to aid the company’s expansion in Charlotte. The city of Charlotte and Mecklenburg County added $1.1 million.
“These are great-paying jobs, innovative jobs,” McCrory said. “It is another great example of the business opportunity North Carolina offers.”
A ‘city within a city’
Rick and Noah Lazes, the father-son team that began developing the 50-acre N.C. Music Factory property about 14 years ago, called Monday’s news vindication of their quest to revitalize old textile buildings in a neglected area near Fourth Ward.
“A lot of people said we were crazy,” Noah Lazes said, “but it gets us closer to our goal of having a true 24-hour city within a city.”
The N.C. Music Factory is home to restaurants, bars and concert venues. Smaller businesses such as lawyers’ offices and public relations firms occupy some 50,000 square feet of existing office space.
Rick and Noah Lazes said they have two apartment complexes under development and hope to build a hotel as well. After AvidXchange moves there, the site will have room for at least 3 million more square feet of office space – enough for another corporate headquarters.
“This really opens up a new chapter in the ongoing development of the N.C. Music Factory,” Rick Lazes said of the AvidXchange project. “Those (new) jobs are going to spur more development relative to apartments and hotels. … They also create a lot of demand for the many restaurants that are already in the area.”
AvidXchange will initially move into about 33,000 square feet of renovated space in the Silver Hammer Studios building, across the street from the Music Factory. The 60,000-square-foot building provided sound stages for Showtime’s “Homeland” drama series and other productions.
Sound stages won’t be used in the building anymore, but post-production work will still occur in the part AvidXchange won’t be leasing, Noah Lazes said. The renovated space in the Silver Hammer building will be ready for AvidXchange in about two months, he said.
The firm’s new four-story, 115,000-square-foot headquarters building will be ready in 18 to 24 months. A second building could be added, with as much as 150,000 square feet, said Louis Stephens of JLL, the real estate firm representing AvidXchange.
Praeger said his firm began about 14 years ago in a small warehouse at Ninth and Brevard streets, with five employees. The electronic payments sector is growing fast, he added, because most mid-sized firms still haven’t automated their payroll processes.
About 85 percent still distribute paper checks.
“We still have a lot of runway in terms of what the market will support,” Praeger said. “I think we can be a catalyst to bring more technology companies to Charlotte.”
Emerging tech sector?
McCrory pounced on that thought, saying Praeger’s decision to expand in Charlotte suggests the city and state can compete against Silicon Valley and Boston for technology jobs.
The cost of doing business in those regions is much higher, McCrory said, allowing companies such as AvidXchange to operate at lower cost in Charlotte.
To be sure, Charlotte’s IT workforce remains much smaller than that of Silicon Valley or Boston, or even Research Triangle Park. A recent JLL report on high-tech industry employment pegged Charlotte’s workforce at 19,000, compared with 52,000 for Research Triangle Park and more than 213,000 for Silicon Valley.
Still, in cities such as Charlotte, demand for IT professionals is growing outside of traditional tech firms, as corporations such as Belk hire more software developers, programmers and analysts to stay on top of e-commerce and data innovations.
A recent study by consulting firm CEB suggested Charlotte has too few IT workers to keep up with demand – placing Charlotte among the top 15 cities nationally when it comes to IT workforce supply shortages. Charlotte had about 7,000 IT job openings last year, the study said, a higher percentage based on its workforce than all the other top cities except Philadelphia and Oklahoma City.
The Charlotte Chamber’s research director, Paul Hendershot, said he believes the Charlotte region has nearly 30,000 information technology professionals, factoring in tech employment in the banks and other large corporations.
“We’re not thought of traditionally as an IT hub,” he said, “but we do have quite a bit of it here.”
Stephens, the JLL official helping AvidXchange with its headquarters search, agreed.
“We looked very closely at Atlanta,” he said, “but at the end of the day I think Charlotte is in the very early stages of explosive growth in the high-tech sector.”
UNC Charlotte’s computer science department is seeing companies snap up students as fast as they graduate, even though enrollment has doubled to about 1,900 students in the past five years.
“We’re going as fast as we can,” said Yi Deng, dean of the College of Computing and Informatics, “but we still can’t keep up with the demand.”