Are Charlotte’s uptown transit center plans in danger? Questions emerge over county money
Charlotte’s multi-million dollar plan for a renovated transit hub in uptown may be in jeopardy amid rising costs and questions about a key funding source.
The cost of the Charlotte Transportation Center replacement project is expected to go up due to inflation associated with construction, Brent Cagle, interim CEO of the Charlotte Area Transit System, told City Council members Monday. Mecklenburg County has yet to make a “firm commitment” to provide critical funds for the project, he added. And county government may not be interested in participating at all.
“There are some headwinds that we need to figure out as we go forward on that project. There are some financial challenges that we see there,” he told council members.
The existing $89 million plan — approved by the City Council in 2023 — calls for a new underground bus hub to be built at the site of the current transit center at Brevard and East Trade streets. It was slated to include private development above ground at the site, including a new Charlotte Hornets practice facility that has since been moved.
Cagle said the plan included an assumption the county would provide a $20 million tax increment grant to help make it happen. But the county provided a statement to The Charlotte Observer attributed to Commissioner Leigh Altman saying that assumption wasn’t relayed to them.
The uncertainty around the cost of the project and funding means the city may have to “rethink the thing,” said City Council member Ed Driggs. That could include considering changing sites.
“What we have to do is reexamine some things that we had already thought about before and find out what works in context of the current financial realities,” said Driggs, who chairs the council’s transportation committee.
Uncertainty around Charlotte Transit Center funding
Cagle told council members during Monday’s meeting that it was “clearly stated by the county” during a budget workshop with the Metropolitan Transit Commission the previous week “that the county had made no firm commitment to” providing a sizable tax incentive grant for the transit center project.
“We had always assumed and we still are hopeful that a TIG would be possible of $20 million, but that would require commitment from the county, and there is no commitment at this point,” he said.
A tax increment grant, or TIG, allows local governments to borrow money for some public improvements to attract private investment in a designated area, and the debt incurred is secured by and repaid from the additional property tax revenue generated by the development, the UNC School of Government says in post on its website.
Then-CATS CEO John Lewis said when the plan was first presented in 2022 that it would require multiple funding sources, the Observer reported at the time. Assistant City Manager Tracy Dodson said in 2023 when the plan was endorsed by a City Council committee the city would discuss a public-private partnership to fund the development.
In a follow-up statement to the Observer this week, CATS said that despite the county’s lack of commitment, “our partnership with the county remains strong, and our discussions about this and other projects reflect our shared interest in advancing our transit system.”
“CATS is currently evaluating all options,” the statement said.
Altman, who represents the county on the Metropolitan Transit Commission, said CATS’ assumption caught the county off-guard.
“Normally when the county partners with the city on a business development project, there are extensive conversations and planning between the city and the county’s Economic Development teams. Given that we are talking about tens of millions of dollars in taxpayer funds, you can imagine the level of detail and planning that attends each such decision for a tax incentive grant,” she said. “However, to the best of my knowledge, other than assigning a dollar value to the county in a CATS presentation — which was quite a surprise to all the county personnel with whom I spoke — there have been no such negotiations or conversations initiated by the city.”
Asked if there had been any staff-level conversations about transit center funding, county spokesperson Alex Burnett said, “The only thing we can add is that county staff had been asked to participate in the project, and the county informed city staff that it would not participate.”
CATS did not respond to a follow-up question from an Observer reporter about what communication had or hadn’t taken place with the county about CTC funding.
Driggs said he wasn’t aware “of what consultation did or didn’t take place.”
“But I can imagine sometimes people proceed based on prior experience on the assumption that, you know, we will work together on something,” he said. “It was innocent enough … I think it may have come as a surprise to some of us that the county took that position.”
How much is project cost going up?
Cagle also said Monday that White Point Partners — the development firm brought on for the project — told CATS in the last week the cost of the project could rise due to “inflationary factors.” A CATS’ statement did not directly address an Observer question about how much the developer is estimating the project cost will increase.
“Don’t have all the answers, late breaking developments, but clearly the project is under further evaluation,” he said.
In its statement, CATS said it “encountered a shift in our funding landscape due to an approximate 20% rise in local construction costs, impacting the CTC Redevelopment Project.”
Could Charlotte bail out transit center plan?
Asked if the city could chip in more to help with the rising costs, Driggs said he “couldn’t speculate right now how that might turn out.”
“We just haven’t had a chance to talk about it,” he said, noting that the council would have to evaluate the “impacts something like that would have” on the city’s capital planning process.
The new issues mean everyone involved now has to “go back to considering some alternatives that have been contemplated before,” Driggs said.
That could include discussing use of a city-owned lot adjacent to the transit center, Driggs said.
“We have been talking with White Point about how to develop that or where that would fit into, say, a temporary location for the bus center or a permanent one,” he said.
What about Charlotte Hornets practice facility?
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In addition to questions about funding for the transit center, changes in plans for the Charlotte Hornets’ new practice facility also impacted the project in recent weeks.
When the City Council first approved plans for the transit center in 2023, it included the practice facility. But the NBA franchise’s new ownership group came back requesting major changes to the practice facility, including moving it to a gravel lot at Caldwell and Trade streets, near the Spectrum Center. Those changes were approved by council members last month.
Asked about the potential impacts of that decision on the transit center, Cagle previously said the CTC project was still moving forward.
“It’s always been a project to replace the CTC and have private development over build on the same parcel. All of that remains the same. That has not changed,” Cagle told the council’s economic development committee during a discussion last month.
This story was originally published April 4, 2024 at 10:08 AM.
