The nearly vacant Wake Forest University Charlotte Center office building in uptown Charlotte, sold last week for about $33 million. That's about half of its previous sales price and about a quarter of the county's assessed tax value for the 36-year-old building on North College Street. For more on what's behind the lower sale -- and what it means for office buildings and also taxpayers, I'm joined now by Tony Mecia of the Charlotte Ledger Business Newsletter for our segment, BizWorthy.
Marshall Terry: Who bought this building, and what are the plans?
Tony Mecia: Property records show, the company that bought the building is connected to a Dallas businessman. And they haven't detailed a lot of the plans. but they did say in a press release on Monday that they want to redevelop the site into apartments and ground-level retail.
Terry: So, why was the sale price so low? And what are the implications, especially as far as tax values of commercial buildings go?
Mecia: Well, right. As you mentioned, this site sold for $33 million. It sold for about $67 million in the 2010s, and then the assessed value was $133 million.
The office market is really challenged right now. A lot of these office buildings, especially the older ones, are empty or majority-empty. People aren't fully in the office typically. Tthey're working hybrid arrangements, they have work-from-home arrangements -- that's causing the value of these office buildings to drop. This is really one of the first office buildings that's been sold in the last couple of years. And if it's at a greatly reduced price, you can just imagine if this is replicated across uptown, across other office buildings in Charlotte, it's going to result in a huge drop in tax revenue as the value of these buildings drops.
The implications of that are, we're going to see more of the tax burden shifted onto residential property taxpayers -- people who own houses as opposed to people who own commercial buildings.
Terry: All right. Well, according to Charlotte's tourism agency, October was a record-breaking month for hotels. So, what brought all those people to the city?
Mecia: There were a lot of concerts, as well as the effect of Helene driving people into Charlotte from the North Carolina mountains. The Charlotte Regional Visitors Authority said the occupancy in Charlotte area hotels was 81.2%. That's ahead of the 78.7% record from 10 years ago. There were concerts in Charlotte in October, including Usher, Morgan Wallen, Post Malone, and of course the benefit concert for western North Carolina at Bank of America Stadium -- that wound up being the fourth-busiest night of all time for hotels in Charlotte.
Terry: Well, all right. Over to the airport now. Delta Air Lines carries only about 2% of the passengers at Charlotte Douglas, but it's just opened the newest lounge. What does that say about the airline's plans and implications for business travelers?
Mecia: I think Delta Air Lines could be looking at an expansion down the road. They have a bunch of gates at Charlotte's airport, but those gates are not fully booked. And, so it could be an indication that Delta Air Lines is looking at adding a bunch more flights to Charlotte.
Terry: Let's end this week on restaurants and how they suffered during COVID-19 -- which you and I talked about a lot on this segment. The North Carolina Supreme Court this week ruled that insurance should cover lost sales restaurants suffered due to forced closures. That ruling goes against many other similar claims around the country though, right?
Mecia: It does. There have been a number of lawsuits born out of COVID, about how these losses that restaurants experienced when they were closed -- you know, whether insurance is going to pick up the cost of those. It's been a dispute because the contracts don't really address that. The question is what constitutes a direct physical loss? And insurers had argued that it had to do with damage. These restaurants weren't damaged, they were closed on government orders because of the pandemic. North Carolina Supreme Court ruled that those losses should be compensated as business interruption brought about by an extraordinary event -- that does contradict rulings in other states as well as appellate court rulings. But I think it's still going to be playing out in the courts.