Emerging Executives Discuss Real Estate Trends with Local, State and National Experts
About 50 NCEDA members gathered at Rocky Mount Mills on January 29 for a forum on real estate and place-making. The half-day event, “Spaces, Places & Properties in Economic Development,” was organized by NCEDA’s Emerging Executives Group.
Tyler Mulligan, director of the Development Finance Initiative at the UNC School of Government, offered an overview of Opportunity Zones, a federal initiative stemming from the 2017 Tax Reform Act. There are 8,700 Opportunity Zones across the US, Mulligan explained, 252 of them in North Carolina. “Almost every county has one,” he said. The zones offer deferment of capital gains taxes on liquidated investment holdings when they are directed into a zone or Opportunity Zone Fund. Investors holding capital there for at least 10 years will owe the IRS no capital gains tax at all. Thus, the race is on to find “investment-ready projects” while the window is open. “The first stage in the development process is to have an idea,” explained Mulligan. Key among the requirements are site control and a credible development plan. Successful initiatives will likely be those that enjoy support from local governments. “As economic developers, you’re making sure the Opportunity Zone investor has a good public partner,” Mulligan told the group.
Rocky Mount Mills is a re-development initiative led by Raleigh-based Capital Broadcasting Company, which also owns the American Tobacco Campus in Durham. Michael Goodmon, a fourth-generation owner of the company, spoke to the energy, vision and patience required in leading such transformative projects. “There’s a difference between a long-term investor and a short-term investor in terms of what they’re willing to stomach,” Goodmon said. “This is an art. You’re trying to protect a community’s context.” Rocky Mount Mills produced textiles until the facility’s closure in 1987. The 150-acre site is now home to housing, retail shops, restaurants, office space and more. For such re-development ventures to flourish, support from the surrounding community is crucial. “Our best cheerleaders are the people who live in our communities,” Goodmon said. “Without that you’re running uphill.” CBC’s real estate properties succeed because they feel welcoming to a full spectrum of residents, visitors, businesses and employees. “Communities will fail if we do not know how to embrace diversity,” he said. “That’s not PR. It’s good business.”
The event included a panel discussion on redevelopment strategies, with Liz Parham, director of the NC Main Street and Rural Planning Center at the NC Department of Commerce, encouraging participants “to really dig in and identify the assets in your community and develop those assets.” She cited New Bern’s waterfront, Goldsboro’s military families, and Kinston’s food and beverage enterprises as examples of redevelopment strategies built off a unique local feature. Success also comes to those communities and organizations that can articulate a compelling value proposition to investors. “Most communities would tell you their biggest challenge is money, but it probably isn’t,” Parham said. “You can find the money for anything you want as long as you can sell it as a win-win for whoever you’re talking to.”
In recent years, the City of Wilson has received state and national attention for a downtown redevelopment vision that began with less than $1 million amid the 2010 economic downturn. Kimberly Van Dyk, planning and community revitalization director for the City of Wilson, credited Whirligig Park for starting Wilson’s successful “place-making” strategy. “We had an amazing asset in our community, but it was rusting away,” she said in reference to a local resident’s collection of large kinetic sculptures. Wilson now expects to announce $61 million in total investment directed into downtown projects, including a move by BB&T Bank to build a $35 million facility there. But patience and perseverance are required, Van Dyk cautioned. “You’ll encounter challenges,” she said. “This is a long game.” Those sentiments were echoed by Evan Covington Chavez, development manager at Rocky Mount Mills, who also spoke of the importance of staying-power. “You have to have a long-term perspective,” she said. “You can’t be dictated to by election cycles.”
Sara Maffey, Atlanta-based managing director for place-making at Transwestern, presented a “Real Estate 101” on place-making. At the heart of most site-selection and property development opportunities are shifting tastes and preferences. “As organizations change so does their real estate decision-making,” Maffey said. Today’s companies are utilizing less real estate due to trends in “hoteling,” remote working, automation and technology. Real estate choices boil down to the social links embedded in today’s commercial environments and workplaces. “Place-making is about spaces that allow people to connect – a place where you’re generating business value just by being there,” she said. In a dramatic departure from the past, companies are increasingly mobile, moving to where their talent wants to be. “Now, instead of location, location, location it’s about people, people, people,” Maffey said.