Charlotte NC Real Estate News

Wachovia Corp. is expanding its plan for a mixed-use project on South Tryon Street , combining an office tower with condos, a park, a theater and an art museum.

The development would pump life into a drab patch of uptown and extend the company's headquarters campus across Tryon Street . The 30- to 35-story office tower would be uptown's first since the city's second tallest -- the 46-story Hearst Tower -- opened in 2001.

Wachovia last year announced plans for a building that would house a theater and classrooms for Wake Forest University 's business school, but found the project a tight fit for a half-block it owns on South Tryon . A push for new arts facilities also has moved slowly before City Council.

Now the Charlotte-based bank says it will use that half block and an adjacent city block it is buying from Duke Energy Corp., creating a four-acre site bounded by South Tryon, Stonewall and Church streets as well as the existing 400 South Tryon building. The complex would house Wachovia employees, the business school and other tenants, including retailers.

Wachovia real estate executive Bob Bertges told the Observer Tuesday that the company wants to move quickly on the tower, condos and park, scheduled to open in 2008. While Wachovia would contribute land for the arts facilities, it is asking the city and county to pay to build the theater and proposed Bechtler art museum using property taxes generated by the office tower and condos.

Spending tax dollars on arts and entertainment facilities has proved controversial in the past.

City Council member John Lassiter, who chairs the economic development committee, Tuesday called the plan an "exciting development ... that will allow us to make significant progress toward meeting our cultural facilities needs."

The project, however, would appear to stymie a plan pushed by Mayor Pat McCrory to combine the Bechtler museum with a new uptown site for the Mint Museum of Art. In recent months, the museums have eyed a joint facility on North Tryon Street property owned by Bank of America Corp.

McCrory declined comment Tuesday, saying he had not seen the latest plan.

The project would jumpstart a side of uptown largely devoid of the cultural facilities and restaurants that have sprung up a few blocks to the north. The company also said the development reflects its ongoing commitment to its headquarters city.

Bertges envisions a swath of development that ties Wachovia's three existing towers to the Charlotte Convention Center on College Street and Duke's headquarters building on Church Street . In the middle would be First Street flanked by condos and a park on one side and an office tower and museum on the other.

"My vision is we will jazz First Street up so it will really be a fun street," he said.

Wachovia would not disclose the cost of the project. A spokeswoman said the company would contribute land for the arts facilities as part of its previously announced $8 million commitment to the Arts & Science Council's proposed cultural package.

The office tower would be similar in height to the 32-story Three Wachovia Center -- the building across South Tryon with the colorful reflective sculptures on top -- and likely of a similar design. The condos and park would mimic the successful Ratcliffe and Green development across the street.

Responding to renewed interest in urban living, developers have shifted from office to condo construction in the center city, where seven towers have been announced during the past year.

The bank expects to occupy about half the space in the new building -- about 450,000 square feet -- by moving employees from leased offices uptown. Bertges said the nation's No. 4 bank by assets could save money by occupying a building it owns rather than leases.

The bank's landlords on other buildings would have to find new tenants, but "with the project approximately three years off, that's enough of a planning window to begin re-tenanting the buildings," said real estate analyst Melanie Sizemore of Carolinas Real Data.

She said the center city office market should be able to withstand the additional space.

Carolinas Real Data's first-quarter office report likely will show the center city vacancy rate has shrunk to around 7.1 percent from 8.81 percent in the fourth quarter of 2004, Sizemore said.

Real estate analyst Frank Warren of Warren & Associates said, "This is purely speculative, but by 2008 the financial landscape in terms of the large regional (banks) could change again. We could see more consolidation in the industry and a bigger need for more space."

Childress Klein Properties will be the developer, while TVS Architects and Batson-Cook Co. will design and construct the theater and office tower.

Based on the estimated size of 900,000 square feet, real estate experts say the tower could cost $270 million or more, including parking and ground level retail space. To generate enough property tax revenue to pay for the theater and museum, the project would have to approach $300 million.

Duke Energy has owned its property on South Tryon Street for about 10 years and had considered it the possible site for a new headquarters building. But spokesman Randy Wheeless said the company now has enough space.

A Firestone service station, which would be demolished, leases part of the land. Parking lots and a Duke-owned print shop cover the rest of the property.

Got, Alotta, Charlotte!

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