Last week, the U.S. Senate passed the Inflation Reduction Act of 2022, a $740 billion budget reconciliation measure with provisions to address climate change and energy security, extend federal healthcare subsidies, and allow Medicare to negotiate prescription drug prices. As we informed you last week, the bill, which had been negotiated by Senate Majority Leader Charles Schumer (D-NY) and Senator Joe Manchin (D-WV), contained a proposal changing the taxation of carried interests that would have harmed the commercial real estate industry and real estate entrepreneurs.

When the Schumer-Manchin agreement was announced, NAIOP and NAIOP Arizona, along with our national real estate allies, mobilized to support Senator Kyrsten Sinema (D-AZ) in her efforts to oppose the proposed changes to carried interest. In order to ensure her vote, the proposal was dropped from the bill before the legislation was brought up for floor debate.

We are gratified that the concerns of NAIOP and the real estate industry were considered on this very important issue. For more than a decade, NAIOP has successfully opposed various proposals to alter the tax treatment of carried interests, or “promotes” as they are known in real estate. While characterized in the media as affecting Wall Street hedge fund managers, these tax increases would have had a much broader economic impact, impacting real estate partnerships, the venture capital industry and others. We have been engaged with policymakers long before this latest proposal was introduced, and our members’ support has been extremely helpful.

Senator Sinema promised to continue working with Senator Mark Warner (D-VA) to develop legislation reforming carried interest taxation. I want to assure every NAIOP member that, on this and the other important issues affecting commercial real estate, we and our NAIOP chapters will continue our strong advocacy on behalf of you and our industry.

Congrats to Sagar Rathie for being named a 2022 Developing Leader award winner by NAIOP. 

Sagar joined Crescent Communities in 2016, and leads all aspects of Crescent Communities Commercial development and new investment growth through the East and West, including North Carolina, Tennessee, Georgia and Florida. His primary responsibilities include acquisitions, predevelopment, and financing, as well as managing Crescent Communities' $800 million commercial pipeline. Rathie has extensive capital markets experience, having collectively raised over $3 billion in capital throughout his career.

Previously, he was Crescent Communities' Director of Corporate Finance and Investor Relations, and led the execution of the Company's multiyear strategic plan. Sagar received his MBA from UNC-Chapel Hill, Master's in Engineering from Duke University, and BS in Biomedical Engineering also from UNC-Chapel Hill.

Last week, NAIOP members met with City Council Candidates Dimple Ajmera and Marjorie Molina to discuss important issues impacting Charlotte’s CRE industry.

The Lunch with a Leader series provides NAIOP Charlotte members an exclusive opportunity to meet and interact with key leaders in our community. Look for upcoming NAIOP Charlotte fall events here.

Compiled from REBIC, staff reports

REBIC’s Rob Nanfelt reported Tuesday that the City’s Planning Committee is taking up the matter of the proposed Unified Development Ordinance. Next month, committee members will take any additional recommendations before the third/final draft.

Last week, the Charlotte City Council received comments from the community during a public hearing on the proposed UDO. Click here to view the resolution. The entire hearing is available to view here – beginning approximately at the 2:51:30 mark.   

Next is a review and recommendation from the City’s Planning Committee scheduled to begin Tuesday, July 19, at 5 p.m. Those interested can view it on the City’s Planning Department YouTube Channel. The complete agenda and meeting packet is available here.

On Monday, Charlotte's proposed Unified Development Ordinance (UDO) public hearing took place in the City Council Chambers. 

REBIC's Rob Nenfelt and his team put together this week's Two For Tuesday and UDO takes center stage early next week.

UDO - Public Hearing Scheduled for Monday

The Charlotte City Council has scheduled a public hearing on the proposed Unified Development Ordinance (UDO) for Monday, July 11. The Council Action Review begins at 5:00 pm followed by the Public Forum/Business meeting at 6:30 pm. An agenda should be available here by Friday afternoon. Click here to sign up to speak. 

Also, Planning Staff has just released responses to public comments submitted prior to last Thursday's deadline. Additional changes will be reflected in the next and likely final draft when it is released which will occur prior to the expected vote on adoption in late August. Here's a link to the page containing the Second Draft Public Comments - With Staff Responses.

For additional UDO resources, please visit Charlotte's Unified Development Ordinance (UDO) - (charlotteudo.org).

The Charlotte Future 2040 Policy Map took effect on July 1. This map will replace the current Future Land Use tool. The city thanked all who participated and provided input.

To give some history about the plan, the Charlotte Future 2040 Comprehensive Plan was adopted in June 2021. Charlotte City Council adopted the Charlotte Future 2040 Policy Map on March 28. 

To access the map, go to here. To see the 2040 Comprehensive plan, go here.

Have more questions about the Policy Map?
Planning Department staff will host virtual and in-person office hours each month
for the rest of the year to answer additional questions.

June 23, 2022:  More than 100 commercial real estate professionals registered to hear a panel of local industry professionals share their feedback on the latest draft of Charlotte’s Unified Development Ordinance (UDO). Roger Manley (BB+M Architecture), Jon Morris (Beacon Partners), Tim Sittema (Crosland Southeast) and moderator Rob Nanfelt (REBIC) discussed their participation and impacts the new ordinance will have on the future of commercial real estate development.

Some of the highlights included:

Affordability after the UDO's implementation.  Yes, development and housing costs will go up. But the new draft should offer more flexibility.

Vacant Storefronts Can be Repurposed into Retail Incubators

They can provide an immediate boost in shopping districts and grow future businesses into long-term tenants.

• Written by Ilana Preuss, Development Magazine

The COVID-19 pandemic has left America’s retail districts pockmarked with empty storefronts, but there is a creative solution. These vacant spaces, which often can be purchased or rented at reduced prices, are prime targets for conversion into retail incubators.

Retail incubators, like business incubators, nurture new or small-scale entrepreneurs during the startup phase. They mitigate some of the challenges of opening a business by providing financial and technical assistance, such as the basics of marketing and business plans. Tenants typically share space, ideas and operating expenses in locations that they could not otherwise afford. Many spaces have flexible or temporary lease terms. Some allow for small-scale manufacturing and hold community events, such as product demonstrations, fashion shows and art openings.

According to the U.S. Chamber of Commerce, new business applications in the United States set an all-time record of 5.1 million in 2021. At the same time, the pandemic has led to consolidation of space and locations by major retail brands, which reduced the prospect of attracting businesses. The challenge for small businesses is they can’t immediately fill the footprints of major store closings. However, they can make temporary use of retail space to establish their businesses, and occupying formerly abandoned stores can help energize struggling downtowns.

2040 Planning Academy Starting Tuesday, June 21

Do you have questions about all the development you see in CLT? Do you want to know more about how CLT plans for its future? Are you interested in influencing the future of your neighborhood?

The 2040 Planning Academy, formerly the Community Planning Academy, is a free 5-class program aimed at helping residents better understand the role planning plays in building communities. Through group discussions, presentations, and interactive activities, participants will learn when and how they can be involved in planning processes and help influence the future of their community.

The application window is open starting today, Tuesday, June 21, 2022, and will close on Sunday, July 17, 2022, at midnight.

As part of an annual visit, NAIOP members visited elected North Carolina's elected officials today in Raleigh. Representing the commercial real estate industry’s perspective is critical to cultivate future relationships when challenges arise in the state legislature. 

 Phase 3 Real Estate Partners’ Genesis Marina, a 550,000-square-foot life science development south of San Francisco, is the nation’s first precertified TRUE zero-waste project. Photo courtesy of Phase 3 Real Estate Partners

By NAIOP Development writer Alice Devine

Zero-waste efforts attract greater attention, including a new certification program. 

New buildings can create architecturally pleasing skylines and yet leave construction debris in their wakes. In fact, the U.S. Environmental Protection Agency estimates that construction and demolition debris accounts for more than twice the amount of generated municipal solid waste in the U.S. 

Other key takeaways mentioned 

Thursday will mark the release of the Strategic Mobility Plan (SMP) draft. The public can access the May 19 meeting at this link.

The SMP’s goal is to shape the mobility future for the City of Charlotte and expand on the “Safe and Equitable Mobility” goal of the Charlotte Future 2040 Comprehensive Plan (2040 Plan). The SMP dives deeper into the mobility policies of 2040 Plan to achieve a safe, connected, equitable, sustainable, prosperous, and innovative mobility vision for Charlotte. To learn more, follow this link to the Strategic Mobility Plan homepage.

SMP Virtual Engagement Sessions will be live on Thursday, May 26 (6 p.m.) and Tuesday, May 31 (noon). Meeting links will be available by visiting charlottenc.gov/smp.

Additionally, you can sign up to share input during the public comment portion of the City Council Business Meeting on Monday, June 13, at 6 p.m.

UDO – Updates

On Wednesday, there will be a presentation on the findings related to the Economic Analysis of the draft UDO.