Invest: Charlotte 2021

Charlotte 2021 An in-depth review of the key issues facing the Charlotte metro area’s economy, featuring exclusive insights from prominent industry and political leaders

$159.00 ISBN 978-0-9988966-1-8

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9 780998 896618

CONTENTS

Contents: 45

Professional Services:

46 Vital role: The professional services sector has played a key part in supporting individuals and businesses throughout the pandemic 47 Interview: Matt Snow, CEO, Dixon Hughes Goodman LLP (DHG) 48 Interview: Malcomb Coley, Central Region EY Private Leader & Charlotte Managing Partner, EY 50 Interview: Clark Goodman, Charlotte Office Managing Partner, Womble Bond Dickinson (US) LLP

9

Economy:

10 Economy in numbers: 12 Reignited: As vaccines roll out, the Charlotte metro area is primed for a rebound 13 Interview: Janet LaBar, President & CEO, Charlotte Regional Business Alliance 15 Interview: Michael Smith, President & CEO, Charlotte Center City Partners 16 Interview: Charles Thomas, Charlotte Program Director, John S. and James L. Knight Foundation 18 Interview: Tracy Dodson, Assistant City Manager & Economic Development Director, City of Charlotte 20 Roundtable: County priorities Mike Downs, County Manager, Cabarrus County; David Hudspeth, County Manager, York County; Randy Isenhower, Chairman, Board of Commissioners, Catawba County; Beth Jones, County Manager, Iredell County

25 Interview: Haley Gentry, Acting Aviation Director, Charlotte Douglas International Airport 27 Interview: Ralph Lopez, Vice President of Operations – Charlotte, American Airlines 29 Interview: David Irving, General Manager, Lamborghini Charlotte

31

Union County:

32 Best of both worlds: Wealth of offerings has Union County on a strong growth path 33 Interview: Mark Watson, County Manager, Union County 34 Interview: Michelle Lancaster, Deputy County Manager, Union County 37 Interview: Rhett Brown, President, Wingate University 39 Interview: Melissa Merrell, Chairperson, Union County Public Schools

22 Interview: Dena Diorio, County Manager, Mecklenburg County

40 Market voices: Mayor’s corner Michael Alvarez, Mayor, Town of Indian Trail; Bobby Kilgore, Mayor, City of Monroe; Marcus McIntyre, Mayor Pro Tem, Town of Indian Trail; Ron Pappas, Mayor, Town of Waxhaw

24 Last-mile push: Distribution needs reinforce the strength of the region’s transportation and logistics sector

42 Interview: Chris Plate, Executive Director & Economic Development Director, MonroeUnion County EDC

2 | Invest: Charlotte 2021 | CONTENTS

51 Market voices: Now trending …

Tom Gibson, President & CEO, DecisionPathHR; David Preston, Co-Founder & CEO, PeopleSuite; Jay Wade, CEO Wade, Associates, LLC 54 Interview: Geoff Gray, Executive Vice President, Southeast Region, Signature Consultants 56 Interview: Walter Fisher, Office Managing Partner, Charlotte, Troutman Pepper Hamilton Sanders LLP 57 Perspectives: Outlook 2021 58 Roundtable: Pandemic maneuvers John Bly, Regional Managing Partner, South Atlantic, Aprio LLP; John Norman, Managing Partner, GreerWalker LLP; Dan Warren, Charlotte Market Leader, Elliott Davis; Jeffrey Wilkinson, Office Managing Partner Assurance Services, BDO – Charlotte 60 Interview: John McDonald, Managing Partner, Charlotte, McGuireWoods

63

Gaston County:

64 Strong position: Gaston County is emerging from the pandemic with growth in mind 65 Interview: Kim Eagle, County Manager, Gaston County 66 Interview: Walker Reid, Mayor, City of Gastonia 69 Interview: John Hauser, President, Gaston College

72 Interview: Caleb Moore, Project Manager, NorthPoint Development 73 Interview: Tim Holiday, Director of Development, NorthPoint Development

77

Real Estate:

78 Getting hotter: Despite challenges, Queen City real estate proved resilient in the face of the health crisis 79 Interview: Clay Grubb, CEO, Grubb Properties 80 Interview: Johno Harris, President, Lincoln Harris 82 Roundtable: Demand drivers Daniel Cottingham, CEO, Cottingham Chalk; Valerie Mitchener, Owner, HM Properties; John Porter, President, Charter Properties; Yuriy Vaynshteyn, President & CEO, Engel & Völkers Charlotte 86 Interview: Flint McNaughton, CEO & Founder, SunCap Property Group 88 Interview: John Barton, President, Northwood Office 91 Perspectives: Sectoral views 92 Roundtable: Commercial reflections Greg Copps, Managing Partner, Charlotte, Colliers International; Brett Gray, Managing Principal, Cushman & Wakefield – Charlotte; Chris Thomas, Partner, Childress Klein; Ben Yelm, Regional Manager, Charlotte, Marcus & Millichap 96 Interview: Charles Hodges, President & CEO, New Forum 97 Market voices: Growth regions Brannen Edge, Managing Partner, President & Chief Executive Officer, Flagship Healthcare Properties; Andrea Howard, Managing Director of Investment Sales, Northmarq; Jared Londry, Co-Market Leader & Executive Managing Director, Stream Realty Partners; Karen Mankowski, Associate Director, Newmark

100 Interview: David Kennedy, President, Canopy Realtor® Association

103 Construction & Infrastructure: 104 Building confidence: 2020 saw a dip in construction and infrastructure activity but the forecast is for strong growth 105 Interview: Pat Rodgers, President & CEO, Rodgers 106 Interview: Michael Byrd, Regional Vice President and Division Manager, Brasfield & Gorrie – Charlotte 108 Interview: Mark Dent, Vice President & General Manager, Turner 112 Roundtable: Architecture Tripp Beacham, Managing Principal, BB&M; John Gaulden, Co-Managing Director & Principal, Gensler – Charlotte; Zena Howard, Principal & Managing Director, North Carolina, Perkins&Will; Tim O’Brien, Studio Manager, LaBella Associates 114 Interview: Zach Pannier, Business Unit Leader, DPR Construction 115 Perspectives: Challenges 117 Interview: Keith Poettker, President, Poettker Construction 120 Interview: David Harker, CEO & Founder, Harker

123 Banking & Finance: 124 Critical role: From PPP loans to digitalization, the banking and finance industry has been front and center during the pandemic 125 Interview: Heath Campbell, President, Charlotte Metrolina Region, Truist 126 Interview: Weston Andress, Regional President for Western Carolinas, PNC 130 Roundtable: Sector landscape Kendall Alley, Regional Bank President, Wells Fargo; Brent Gore, Head of Commercial Banking, Carolinas Region, JPMorgan Chase;

Blaine Jackson, Charlotte Division President, Park National Bank; Rick Manley, Mid-Atlantic President, First Horizon Bank 132 Perspectives: Opportunities 133 Interview: Jeffrey Brown, Chief Executive Officer, Ally Financial 137 Interview: Lee Fite, Regional President, Mid-Atlantic, Fifth Third Bank 138 Interview: Steven Fisher, Chairman & CEO, F&M Bank/F&M Financial Corporation 139 Market voices: Wealth Management Edward Doughty, Managing Partner, Epic Capital Wealth Management; Tim Flanagan, President, Carolinas, MassMutual Carolinas; Burt White, Managing Director, Investor and Investment Solutions & Chief Information Officer, LPL Financial 140 Perspectives: 2020 143 Interview: William Hedgepeth, President & CEO, Select Bank & Trust 144 Charlotte region financial services:

145 Healthcare: 146 Brighter days: A positive outlook and a burgeoning life sciences hub point to a healthy future 147 Interview: Dr. Dale Owen, CEO, Tryon Medical Partners 148 Interview: Lindsay Muns, CEO, Charlotte Radiology 149 Interview: Trey Sutten, CEO, Cardinal Innovations Healthcare 150 Interview: John Green, President & CEO, Iredell Health System

153 Central Piedmont Community College: 154 Pivotal player: Central Piedmont looks to Charlotte’s recovery with an eye on the region’s long-term future 155 Interview: Dr. Kandi Deitemeyer, President, Central Piedmont Community College

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Contents: 156 Interview: Dr. Heather Hill, Vice President of Academic Affairs, Central Piedmont Community College 157 Interview: Dr. Tracie Clark, Vice President for Strategy and Organizational Excellence, Central Piedmont Community College 158 Interview: Dr. Chris Cathcart, Vice President of Student Affairs, Central Piedmont Community College 159 Interview: Mark Short, Vice President of Talent & Organizational Engagement, Central Piedmont Community College

163 Education: 164 Sea Change: Emerging from the pandemic, education already looks very different 165 Interview: Fred Whitt, President, Lenoir-Rhyne University 169 Interview: William Downs, President, Gardner-Webb University 170 Roundtable: Future of education Sharon Gaber, Chancellor, University of North Carolina at Charlotte; Charles Iacovou, Dean of School of Professional Studies and Vice Provost of Charlotte Programs, Wake Forest University; Daniel Lugo, President, Queens University of Charlotte;

Charlotte 2021 Cheryl Richards, President – Charlotte Campus, Johnson & Wales University 172 Interview: Clarence Armbrister, President, Johnson C. Smith University

ISBN 978-0-9988966-1-8 President & CEO: Abby Melone Chief Financial Officer: Albert Lindenberg Regional Director: Jack Miller Senior Editor: Mario Di Simine

173 Perspective: Job ready

Regional Editor: Max Crampton-Thomas

174 Interview: Carol Spalding, President, Rowan-Cabarrus Community College

Art Director: Nuno Caldeira

176 Interview: Scott Bullard, President, Pfeiffer University 178 Educational attainment by county in the Charlotte area:

179 Tourism, Arts & Culture: 180 Horrible aberration: Optimism is seeping through the cracks of COVID, pointing to brighter days ahead 181 Interview: Tom Murray, CEO, Charlotte Regional Visitors Authority 182 Interview: Douglas Hustad, General Manager, Omni Charlotte Hotel 184 Interview: Matt Allen, General Manager, Hyatt House Charlotte/ Center City 185 Perspectives: Landscape 186 Interview: Randy Rushakoff, Area General Manager, Midas Hospitality

Executive Director: Chris Chapman Content Manager & Senior Writer: Felipe Rivas Writers: Sara Warden, Esteban Pagés, Cameron Saunders Office Assistant: Michelle Orellana Invest: Charlotte is published once a year by Capital Analytics Associates, LLC. For all editorial and advertising questions, please e-mail: contact@capitalaa.com To order a copy of Invest: Charlotte 2021, please e-mail: contact@capitalaa.com All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, without the express written consent of the publisher, Capital Analytics Associates, LLC. Whilst every effort has been made to ensure the accuracy of the information contained in this book, the authors and publisher accept no responsibility for any errors it may contain, or for any loss, financial or otherwise, sustained by any person using this publication.

Capital Analytics Associates, LLC accepts no responsibility for the return of unsolicited manuscripts and/or photographs, and assumes no liability for products and services advertised herein. Capital Analytics Associates, LLC reserves the right to edit, rewrite, or refuse material.

187 Interview: Tom Gabbard, President & CEO, Blumenthal Performing Arts Center 188 Interview: Billy Dunlap, President & CEO, Visit York County

Photo Credits: Contents: pg. 2 – DPR Construction Economy: Pg. 9 – ProgressiveAE; Gaston County Pg. 12, 14 – The City of Charlotte Pg. 23 – ProgressiveAE Pg. 24, 26 –Charlotte Douglas International Airport Pg. 28 – Lamborghini Charlotte Union County: Pg. 31, 32, 34 – Union County Professional Services: Pg. 45 – Frontier Growth; Dixon Hughes Pg. 46 – Dixon Hughes Goodman Pg. 48, 55 – DecisionPathHR Pg. 52, 61 – Frontier Growth Pg.57 – Wade Associates LLC Gaston County: Pg. 63, 64, 66, 70 – Gaston County EDC Pg 72 – NorthPoint Pg 74 – Belmont Abbey

4 | Invest: Charlotte 2021 | CONTENTS

Real Estate: Pg. 77 – ATCO Properties & Management; Canopy Realtor Association Pg. 78 – ATCO Properties & Management Pg. 80 – Brian Twitty Photography Pg. 84 – Northwood Office Pg. 86, 94 – Childress Klein Pg. 98 – Wilkinson ERA Real Estate Pg. 100 – CHARLOTTE BRANDIN

Pg. 140 – Truliant Federal Credit Union

Construction & Infrastructure: Pg. 103 – DPR Construction Pg. 104 – Grubb Properties Inc. Pg. 106, 116 –Brian Twitty Photography Pg. 108, 110, 118 – Rodgers Pg. 115, 120 – Barringer Construction

Education: Pg. 163 – Gaston College Pg. 164 – Johnson and Wales University Pg. 166 – Wake Forest University – Charlotte Pg. 168 – Union County Public Schools Pg. 174 – Rowan-Cabarrus Community College Pg. 176 – University of North Carolina at Charlotte

Banking & Finance: Pg. 123 – Consolidated Planning; Fifth Third Bank – Charlotte Pg. 124, 142 – Wells Fargo Pg. 126 –The City of Charlotte Pg. 134 – TowneBank Pg. 136 – Fifth Third Bank - Charlotte

Healthcare: Pg. 145 – Tryon Medical Partners; Charlotte Radiology Pg. 146 – Tryon Medical Partners Pg. 151 – Iredell Health System Central Piedmont Community College: Pg 153, 154, 156 & 161 – Central Piedmont Community College

Tourism, Arts & Culture Pg. 179 – AC Hotel Charlotte City Center; Hyatt House Charlotte Pg. 180 – Visit York County Pg. 184 – Courtyard by Marriott Charlotte City Center

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Economy: The regional Charlotte economy stalled in the first half of 2020, but signs of increasing activity in the second half of the year provided momentum that has carried over into 2021. Expectations are for a jobs rebound by the end of the year, underpinned by a diversified economy. A steady influx of new residents seeking a better quality of life is also sparking optimism.

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Economy in numbers: Charlotte metro area indicators, comparisons: Average weekly wages for all industries by county, 3Q20 (U.S. = $1,173; Area = $1,140)

Unemployment rates for the nation and selected areas

3.8

United States

6.6 Iredell

3.4

Charlotte area

$1,119 5.5

Rowan

$901 3.8

Gaston Co., NC

Lincoln

$816

6.1

Cabarrus

$877

Gaston

$835

3.4

Mecklenburg Co., NC

Mecklenburg

$1,286

5.7 3.3

Union Co., NC

4.5 2.9

Lancaster

$823

4.8 5.0

Feb-20

Union

$910

Chester

York Co., SC

0.0

York

$952

$977

10.0

Feb-21

Source: U.S. BLS,Local Area Unemployment Statistics

Over-the-year changes in employment on nonfarm payrolls and employment by major industry sector

Source: U.S. BLS,Quartely Census of Employment and Wages

Residential Housing Market (February 2021):

12-month percent changes in employment United States

Charlotte area

Median price:

Closed sales:

2.0

$300,000

4,048

0.0

+12% Y/Y

+3.4% Y/Y

Supply:

Norada 2021 forecast:

4.0

-2.0 -4.0 -6.0 -8.0

0.6 months

-10.0 -12.0 -14.0

+12-15%

-16.0 Feb-18

Feb-19

Feb-20

Feb-21

Source: U.S. BLS, Current Employment Statistics

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| Invest: Charlotte 2021 | ECONOMY

Source: Norada Real Estate Investments

Year-on-year change in the prices paid by urban consumers for selected categories

Over-the-year changes in the selling prices received by producers for selected industries nationwide

12-month percent change in CPI-U, February 2021

12-month percent changes in PPI

4.0

Charlotte area

15.0

U.S. city average

3.5

General freight trucking Hospitals

10.0

3.0

Depository credit intermediation

5.0

2.5

0.0

2.0

3.8

3.6

1.5

-5.0

2.7

1.0

2.0

2.4

-10.0

1.7 -15.0

0.5

-20.0

0.0 All items

Food

Energy

Feb-18

Feb-19

Source: U.S. BLS, Consumer Price Index

Feb-20

Feb-21

Source: U.S. BLS, Producer Price Index

Hotel peformance Jan-Feb (Charlotte MSA): Occupancy rate

Average daily rate

60%

Revenue (Y/Y)

$100 2020 2021

40% ADR ($)

Occ. Rate (%)

2020 2021

61% 20%

$50

51.70% Demand (Y/Y)

$110 $77

40%

-31.10% $0

0%

Source: CRVA

COVID-19 – Daily new cases per 100,000: 100

80

60

40

20

0 Mar 2020

May 2020

Jul 2020

Sep 2020

Nov 2020

Jan 2021

Mar 2021 Source: Opportunity Insights

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Reignited: As vaccines roll out, the Charlotte metro area is primed for a rebound As one of the leading business hubs in the Southeast and the economic driver of North Carolina, the Charlotte metro area is poised for a strong recovery from the pandemic that decimated economies around the world in 2020. It’s bustling healthcare, finance and professional services segments along with a highly touted talent pool, have made it a prime destination for company relocations, while the pandemic itself may have provided a surprise advantage as people flee denser regions for sunnier and more open areas like Charlotte.

To say that the past year was a severe challenge for the region would still be an understatement, however. The COVID-19 pandemic took a heavy toll on businesses and individuals, and continues to have a strong impact. By mid-March 2021, total regional cases since the outbreak had neared 300,000, with 10,082 cases per 100,000, higher than both North Carolina and the national number.

But as the vaccine campaign slips into high gear, optimism is returning. In fact, the Charlotte Regional Business Alliance, in its 4Q20 quarterly report, suggested the “outlook for 2021 is bright.” It added that job numbers, which had already started rebounding in the second half of 2020, could return to pre-pandemic levels by the end of this year.

A number of other factors also contribute to the 12

| Invest: Charlotte 2021 | ECONOMY

heightened level of optimism. Charlotte, or the Queen City as it is known, is the second-largest banking center in the United States after New York City. Bank of America calls the city home, along with nine other Fortune 500 companies as of 2019. Total 2019 GDP for the Charlotte-Concord-Gastonia metro area was $178.4 billion, a result of a well-diversified economy. In addition to banking, other pillars of Charlotte’s economy include energy, transportation and real estate. It also has a large concentration of tech companies and leading IT association CompTIA in June 2020 ranked Charlotte the “Top Tech Town” in the United States, topping well-known tech hub and northeastern neighbor Raleigh.

A low cost of living and for doing business, along with an envious level of connectivity to both the United States and the world, particularly through Charlotte Douglas International Airport, only add to the allure of the Charlotte metro area and its economic prospects.

History The Charlotte-Concord-Gastonia Metropolitan Statistical Area (MSA) is defined as seven counties in North Carolina and three counties in South Carolina. The central county in the region is Mecklenburg County, which is also home to the city of Charlotte, ( )

ECONOMY INTERVIEW

Transformative Centene’s decision to locate its HQ in Charlotte demonstrates the success of decades of action

Janet LaBar President & CEO – Charlotte Regional Business Alliance How big a factor for Charlotte’s economic development is Centene’s decison to build its headquarters here?

The Charlotte Regional Business Alliance was launched in 2018, although it is built on two legacy institutions: the Charlotte Chamber of Commerce and the Charlotte Regional Partnership. Even with the decades of experience these organizations had, Centene is the largest project in the state’s history and by default the largest project for the CLT Alliance and our partners at the city and the county. It is certainly transformative.

The reason that is a good reflection of this market is because it will translate into 6,000 jobs and $1 billion in investment. They knew they would find the talent, the quality of life, the business climate, all the key elements that are going to drive the success of their company. This speaks volumes about investment decisions that were made by elected officials, policymakers, the business community and higher education. Things that have been put in place probably over decades have manifested in the environment that we have today, attracting a company such as Centene.

We are also really excited about Arrival. This is an electric vehicle manufacturer from the UK. They’re setting up their first U.S. microfactory in Rock Hill.

The company is also setting up its U.S. headquarters in the South End of Charlotte and a just-announced electric van microfactory in Mecklenburg County in West Charlotte.

What are the main strategic campaigns you are working on to transform Charlotte’s future?

As a reflection of what we saw happen in 2020, our 2021 plan focuses on three strategies: the first is accelerating economic revitalization through business growth. This relates to the Charlotte region’s economic comeback and how we’re going to make that recovery quicker in comparison to other markets. The second is driving

racial equity in the business community. This is going to be a multiyear commitment for us as we think about how to be a go-to resource for all businesses that are seeking to embrace, implement and hold themselves accountable to diversity, equity and inclusion. We’ve been explicit in calling out racial equity in business as something that we’re going to champion. The third strategy has a 30-year horizon. This relates to the outlook for transforming the Charlotte Region and what investments we can make in infrastructure, in innovation and in higher education that will be game changing for this region over the next few decades.

The shorthand of all of those things is accelerating revitalization for the economy. That is all about business for us. www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

Charlotte’s desirability stems from its low cost of living, growing population, and strategic location in the mid-Atlantic market.

( ) the county seat. Both Mecklenburg and Charlotte were named after British Queen Consort Charlotte of Mecklenburg-Strelitz. Mecklenburg County was also a hub of revolutionary activity during the American Revolution. One controversial story says it was actually the first of the original 13 British colonies to declare independence with the drafting of the Mecklenburg Declaration of Independence on May 20, 1775.

Throughout the 19th and early 20th centuries, several gold veins were discovered running through the Charlotte area and, in fact, North Carolina was the largest producer of gold until the 1848 Sierra Nevada find, a history that led to the establishment of the Charlotte Mint. A significant population boom came after the Civil War, when the city was established as a cotton processing center and railroad hub, and again after World War I when Camp Greene, a U.S. Army facility, was established.

Charlotte is now the most populous metro area in North Carolina and ranks 22nd in the United States with 2.9 million residents in the overall region.

Charlotte has grown steadily over the years. Between 2004 and 2014 it was the country’s fastest-growing metro area and from 2005 to 2015 it was the biggest hub for millennial population growth. According to Charlotte Regional Business Alliance, 97 people move to the region daily.

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| Invest: Charlotte 2021 | ECONOMY

Economic performance Despite the challenges of the pandemic, the metro region’s economy remained resilient, with the unemployment rate staying in line with or slightly below the U.S. average. As COVID spread from March, Governor Roy Cooper issued executive orders limiting public gatherings and subsequently closing sit-in service at restaurants and bars, followed by a statewide stay-at-home order that severely hampered the economy in the first half of 2020. Several more executive orders were passed to expedite access to unemployment benefits, place moratoriums on evictions and a permit allowing restaurants and bars to sell carry-out alcohol. All three orders were consistently renewed over the course of the year but as vaccination efforts continued in the first quarter of 2021 and infection rates and cases continued to decrease in the state, some restrictions were loosened at the end of March 2021.

Several funding initiatives were set up to ensure the economy could continue to operate, including the PPP loan program, the North Carolina Pandemic Recovery Office fund and a $6 million federal grant that was awarded to the state to support job training and temporary employment opportunities. Throughout the year, mass scale testing and vaccination programs were launched and as of March 31, all North Carolina adults were eligible to receive the vaccine.

Pre-COVID, Charlotte’s unemployment rate was 4.2%.

In the preceding years, the city’s job market increased by 2.7% year-over-year and 10-year job growth was projected to be 45.2% — higher than the U.S. average of 33.5%. Between 2008 and 2018, the Charlotte region contributed 53% to the growth in employment in the state of North Carolina. By the second half of 2020 a jobs recovery was already under way in the region and

by February 2021 the unemployment rate stood at 5.5%, having steadily improved since September.

The sales tax rate for Charlotte is on par with the United States at 7.3% but the income tax rate is slightly higher at 5.5%. The median household annual income in the city of Charlotte was $62,817, according to 2019 U.S. Census Bureau data. The largest employers are healthcare and social assistance, retail, manufacturing, education and professional, scientific and technical services.

The city lost 10 spots in the 2021 Milken Institute’s Best Performing Cities Index, coming in at No. 26. The largest drops from 2020 came in the form of 12-month job growth and one-year tech GDP growth. In terms of short-term growth, the city fared better than other similarly sized metro areas. But authorities ( )

ECONOMY INTERVIEW

Unique position Charlotte sees an opportunity to differentiate itself as it emerges from the pandemic

Michael Smith President & CEO – Charlotte Center City Partners

How is Charlotte poised to emerge from the pandemic?

COVID-19 has been incredibly hard for downtowns across the world, affecting us all in incredible ways. All cities were hit at once. Now, as every city concurrently restarts its engine, Charlotte has an excellent opportunity to differentiate itself by how we respond. This will be about being strategic, resilient and responsive. Based on the data of our recently published 2021 State of the Center City Report, we have great confidence that in a postpandemic world, Charlotte’s Center City is going to be uniquely positioned to compete for jobs, investment and talent. Our pipeline is strong. We have about $3 billion in new development in the pipeline in 2021.

How has Charlotte Center City Partners helped small businesses during this time?

We’ve had a number of initiatives that we think have made a difference for our stakeholders, leading with our Small Business Innovation Fund. This is a partnership between us and the Foundation for the Carolinas that was led by Honeywell with a lead gift, but the Knight Foundation, Bank of America, Duke Energy, the city of Charlotte and a number of smaller investors have all come together to create a substantial fund. It’s not focused on relief; rather, it seeks to invest in innovation to support storefront businesses with a preference for minority, women or veteran-owned that may have struggled to secure Round 1 PPP. As of February 2021, we have granted $3.6 million to 116 small businesses, of which 80% are minority, women or veteran-owned.

We’ve also started an Uptown gift-card program, QC Cash, that helps increase the earned income of these storefront businesses.

Finally, there has been a new Uptown marketing campaign called “Show Up for Uptown” and several new

programs through our Music Everywhere initiative to help the music industry.

How has the pandemic affected the substance of the 2040 Center City Vision Plan?

As the pandemic struck, it coincided with a global awakening on issues of racism, diversity, equity and inclusion. It gave us the opportunity to pull the hand brake on the plan’s implementation, go back to the community and listen more intently. As a result, we reshaped our recommendations in the plan. The plan will begin an adoption process, probably early in the second quarter, the hallmarks of which will be its recommendation to create a more equitable place, the transformative power of strategic transportation investments, and also the maturation of our Center City as a collection of distinct, vibrant neighborhoods. www.capitalanalyticsassociates.com

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Charles Thomas Charlotte Program Director John S. and James L. Knight Foundation

What were some of the milestones for the Knight Foundation in Charlotte over the past year?

It was a really tough year for our community. First of all, we responded rather quickly and were able to support the COVID-19 Response Fund that was housed at United Way and Foundation For The Carolinas, making a contribution of $500,000. So I’m personally grateful we were able to do that here in Charlotte. It was also a year of adaptation, so we were able to be flexible with grantees. We make grants to nonprofits in the Charlotte community, specifically those that are focused in the Historic West End neighborhood. We also were involved in a few initiatives. We invested $250,000 in the Small Business Innovation Fund that Center City Partners hosted in partnership with Honeywell, Bank of America, Duke Energy and some others. Knight’s dollars were dedicated to the Historic West End, which is a historically African American community here in Charlotte that was hard hit by COVID from a health perspective. The dollars went to businesses so they could adapt, rather than survive.

How do you involve the community in your work in the West End? We have three priorities for the West End for investment.

With community engagement, it’s about making sure residents are participating, with the goal of them benefiting from the development of their neighborhood, which is rapidly changing. The opportunity is for those residents to have the capacity to envision what they desire and to be at the table with developers to get that to happen. Our second priority is building out neighborhood infrastructure. It’s not about roads and streets; it’s really about organization and leadership.

Third is creating public spaces. Five Points Plaza is a new park being built by the city. We have an investment of $400,000 over three years that is for residents to participate in the programming of that space, with the goal of hiring someone potentially from that community to be the event planner and manager.

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| Invest: Charlotte 2021 | ECONOMY

( ) are optimistic about the future given the influx of migration to the area.

According to a March Redfin report, total home values have jumped $4 trillion during the pandemic and one of the cities driving the increase is Charlotte. The city’s house prices jumped 17.3%, although January data show that prices are still below the national median of $342,326. The influx is mainly driven by the wealth transfer from the Northeast to the Sun Belt given the ability for many executives to work from home. The total value of homes in Charlotte has increased yearover-year by $45.5 billion to $308 billion. A Realtor. com report predicts that Charlotte’s real estate market will experience growth of 19% in the coming years.

Charlotte’s growth is also underpinned by the 2040 Comprehensive Plan, which is a public-private partnership that lays out the future of Charlotte for the next 20 years. Charlotte’s position as the thirdfastest growing U.S. city with the ninth-most Fortune 500 headquarters has not protected it enough from the pandemic’s impacts and the plan aims to diversify the economy further, especially into the tech and distribution sectors. The plan has several goals, including establishing 10-minute neighborhoods, promoting diversity and inclusion, providing housing access for all, and carrying out transit and trailoriented development. By April, the plan was in the public consultation phase.

Government The city of Charlotte, the seat of Mecklenburg County, has a council-manager form of government.

It is represented by the Charlotte City Council, which consists of 11 council members and the mayor, all of whom are elected to two-year terms. The current mayor is Vi Lyles, a Democrat who has served since 2017. She is also the city’s first African American female mayor.

City mayors in the years since 2009 have all been Democrats after Republicans held the office in the 22 years prior. Representatives are elected for the seven districts alongside four at-large positions, including a Mayor Pro Tem, who presides over meetings in the absence of the mayor. Aside from two Republican representatives Tariq Bokhari and Ed Driggs, the rest of the Charlotte City Council representatives belong to the Democratic Party.

At the county level, most are governed by a Board of County Commissioners. The boards’ primary responsibilities are to adopt an annual budget, set a property tax rate and establish priorities to address county needs, especially in the areas of health, education, welfare and mental health.

ECONOMY OVERVIEW

Budget 2021 The greatest global factor to impact Charlotte in the last year has undoubtedly been the COVID-19 pandemic, which sent unemployment rates skyrocketing and posed challenges for almost all businesses in the area.

With a significant slowdown in global travel, the knockon effect created a severe loss of tourism-related tax revenue. Prior to COVID, visitors spent $7.8 billion in the Charlotte region in 2019 and almost $6 billion in Mecklenburg County alone. According to the Charlotte Regional Visitors Authority, tourism tax revenues save every Mecklenburg County resident $383 in tax annually. This means that when tourism dropped off a cliff, so too did tourism-related revenues. Across the state, the tourism industry lost more than $10 billion in 2020. As of April 2020, there was a $21.8 million gap between projected revenue and expenditures for the city of Charlotte in FY 2021.

Despite this, the total operating budget for the city in 2020 dipped by just 2% to $2.55 billion. A boost was provided to the budget by property taxes, which account for 55.7% of general fund money. Total property tax valuation in the adopted FY 2021 budget was $142.7 billion, a $3.8 billion increase on the year.

But sales taxes account for 12.9% of the total general fund revenues and that revenue is expected to fall by 8.5% in the next year due to COVID-19 impacts. The $21.8 million budget gap caused by COVID was resolved through adjustments and shifts in revenues, leaving a discretionary surplus of $1.3 million in the budget. The main expenditures in 2021 are projected to be in water and sewer, with a $504 million total spend and $332 million budgeted for capital improvements. Aviation will also see significant investment with $467.9 million

Tourism tax revenues save every Mecklenburg County resident $383 in annual taxes in total investment, including $255.9 million in capital improvements.

As the city reconciles the budget, innovative ways to carry out capital improvement projects are at the forefront of the authorities’ minds. Public-private partnerships (PPPs) have become increasingly important to provide the city with access to capital from the private sector while alleviating some of the risk for partner companies. The city uses Tax Increment Grants (TIG) as a PPP tool. The grants are provided exclusively on a reimbursement basis after the project is able to demonstrate its benefit to the general public. Reimbursement can be claimed on new public infrastructure such as roads, streetscapes, and parking decks, or for developments that advance the city’s goals in affordable housing, for example.

Charlotte has a rich history of implementing successful public-private partnerships, notably during the COVID-19 pandemic. Honeywell, Atrium

Tracy Dodson Assistant City Manager & Economic Development Director City of Charlotte

What factors have sustained investment confidence in Charlotte during the pandemic?

It’s been interesting. We’ve continued to see great momentum. We announced a huge Job Development Investment Grant in the middle of COVID, which really sent a ripple through the community. There were also a lot of investment groups that have had their eye on Charlotte but thought the playing field was just too crowded. Now that there has been a little bit of a pause, they’re thinking the time may be right to come in. I’ve seen more people capitalize on the slowdown than the opposite. Because of the pandemic and the fact that people can work from anywhere, you’re seeing a lot of in-migration. This is also starting to resonate with businesses.

What specific industries are you targeting to further diversify the economy?

We do think about targeting industries. We’re strong in medicine, for example, but we’re not strong in life sciences yet. Our new medical school by Atrium Health and Wake Forest will change that. I’m encouraging people to tell the story not of what we have today, but of what we will have tomorrow. It’s an easy recruitment process when a company falls into those targeted industries. Financial services is another easy one. I think we look for the companies that are a right fit for Charlotte, and also in terms of the talent we can provide.

What are the biggest concerns for economic developers generally?

I think that we need to be wary of chasing low-hanging fruit, something that might be decorative and attractive but that does not, in fact, improve the lives of the city’s residents too much. We need to move the needle.

What are the things that are going to start the change?

If the economic development area of the city is doing a project, then I need to talk to transportation and see how they can complement it. We have to bring it all together and be very strategic about maximizing every opportunity.

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| Invest: Charlotte 2021 | ECONOMY

Health, Tepper Sports & Entertainment and Charlotte Motor Speedway compiled a How-To guide on mass vaccinations after the successful rollout of the procedure at both venues. In Charlotte, an entire organization was founded to bring together the public and private sectors to work on more in-depth Smart City initiatives that improve sustainability, resilience, economic competitiveness and quality of life. Envision Charlotte, which began in 2017, is a public-private plus collaborative that leads Charlotte’s progress as a global Smart City through innovations that strengthen economic competitiveness, environmental sustainability and positive community impacts.

Employment Charlotte’s steady economic growth has been underpinned by a swelling workforce. In January 2020, the unemployment rate was at 3.7% in the Charlotte area, lower than the U.S. average of 4%. Despite the pandemic’s impact, the rate in January 2021 of 5.8% was still below the national average. Most of the job losses have been in the leisure and hospitality sector, which showed a 27.4% year-on-year decline. Across all other sectors, job contraction remained below 6.5% and financial sector employment even expanded during the period, along with the growth of mobile banking and fintech, which offer emerging opportunities in the region. Of the Greater Charlotte area, Mecklenburg County offers the highest weekly wages at $1,286, followed by Iredell County at $1,119.

North Carolina’s small businesses were badly impacted by the pandemic. According to a WalletHub survey carried out at the beginning of the crisis, the state ranked in ninth place in terms of small businesses affected, coming in at No. 12 in access to resources, 13 in small-business financial conditions and 11 in workforce support. It was around the middle of the list for its share of small businesses and its share of small-business employees operating in high-risk industries. Several resources were made available to small businesses in the state, including the PPP loan program, the Main Street Lending program and the SBA’s Economic Injury Disaster Loans (EIDL) program, which offered low-interest loans to small businesses up to $2 million and an immediate emergency grant of $10,000 if required.

Despite its challenges, Charlotte is gaining recognition as a growing tech hub. Last year, a study

by RCLCO Real Estate Advisors placed Charlotte in first place on its 2020 STEM Job Growth Index. The index not only tracks the jobs today but also where they are going in the future based on local economies,

ECONOMY OVERVIEW

Steve Willis County Administrator – Lancaster County

Our County Council in 2020 was adamant that there would be no tax increases at the county level. For 2021, it’s going to have to change. We’ve been lucky in South Carolina because on the local government level, we are highly dependent on property taxes.

Sometimes, over the last couple of years, you would look at states where cities and counties have other revenue sources — income tax, sales tax — and they were just growing by leaps and bounds with plenty of money. We rely on property taxes. The good thing is that in times like this, while those other revenue sources have seen a huge downturn, we have not really seen that in South Carolina.

migration patterns of young households and favorable business climates. Charlotte is expected to remain in or near the top spot for many years to come based on its economic fundamentals and attractiveness to young professionals.

Demographic shifts Charlotte is one of the beneficiaries of the recent move away from densely populated areas in the Northeast.

Ten consecutive years of large population growth fueled by immigrants and young adults has created diversity and has contributed to the rapid growth of Charlotte as an innovation and financial hub. Not only this, but its status as a sports and culture hub means the greater Charlotte area has something for everyone.

This is one reason why it was included on Forbes’ list of 10 places people are moving to right now and ranked among the Top 10 cities in the world for quality of life.

Charlotte was also ranked by Realtor.com as the best market in the Southeast United States.

According to Axios, 10-year population growth in Fort Mill from 2010 to 2019 was an impressive 83.6%. This was closely followed by the town of Waxhaw’s 64.1% growth rooted in its walkable Downtown. Ten-year growth in Harrisburg, with its famous Fourth of July fireworks, reached almost 40% and Belmont’s growth totaled 24%. This is sure to increase in the coming years as CATS plans to bring the light rail across the Catawba River into Belmont. Midland, Wesley Chapel, Huntersville and Matthews have also all been growing at impressive rates of over 20% in the last 10 years.

Within Charlotte itself, Niche ranks Ballantyne East as the best place to live in the metro area, followed by Dilworth, Fourth Ward, Uptown and Ballantyne West.

Family-friendly amenities, rich diversity, gastronomy, public events and safety are key factors that make the neighborhoods most attractive.

Charlotte is also recognized for its diversity, with 17% of its population reporting they are foreign born, primarily from Latin America. This is about double the rate recorded across the state. Additionally, 21.7% of Charlotte residents report that they speak a language other than English at home, more than 1.5 times the North Carolina rate. This is not an insignificant measure of the future direction of the area, given that changing demographics in Charlotte are turning North Carolina into an important electoral swing state.

In the last election year, there was a 25% increase in registered Hispanic voters across North Carolina, and the number of Hispanic voters skew younger than non-Latino voters.

Global factors Charlotte sits at the heart of the manufacturing and distribution network of the Southeast. Connected to four interstate highways, the city also has two intermodal facilities and Charlotte Douglas International Airport. According to airport figures, in February 2021, total enplanements were down 46.2% on the year to just over 9 million. But in the same month, domestic cargo services experienced a 12.3% surge in demand year-over-year to a total of 113,370 tons. According to the Charlotte Regional Business Alliance, the region is within 12 hours of just over 50% of the US population. This connectivity is making waves in the new post-COVID world as companies look to onshore supply chains.

According to data from Michigan State University, ( ) www.capitalanalyticsassociates.com

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®

oundtable:

County priorities County leaders discuss their priorities and their outlook for the near term, while also addressing opportunities from housing to infrastructure and more.

Mike Downs

County Manager Cabarrus County

What are your priorities and what is your outlook for 2021?

We will continue to prioritize economic development.

We are now seeing more businesses getting engaged again. Many of the companies with which we have held conversations in the past have touched base to say they are still interested in the opportunities we can offer but timetables have been modified slightly.

We are also trying to keep up with the pipeline of school construction and ensure we are planning appropriately. Our plans to expand some of our parks and build the new library are still very much at the forefront.

Our county is unique in that the relationships between each of the cities makes it a better place to do business.

Our elected officials have worked hard to establish these relationships and a shared vision for economic development. Everyone is looking forward to a positive future for the county and its municipalities.

What economic activity have you seen during the last six months?

Golden Home International, one of the world’s leading residential furniture manufacturers, announced in April that it would establish its North American headquarters in Concord, creating 257 jobs over the next five years with an average salary of $42,593. Our housing and construction industries are booming, and this was never stopped at any time during the pandemic. Concord is growing very quickly, as is Kannapolis. Harrisburg and Midland are also growing very quickly so demand for residential real estate is increasing alongside that.

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| Invest: Charlotte 2021 | ECONOMY

David Hudspeth County Manager York County

How is the county adapting its strategic planning for the future?

Our Strategic Comprehensive Plan is updated every five years and we will begin that update in 2021. We are in the process of developing a new Strategic Plan for Economic Development that will provide a guide for our future efforts and will be a part of the Comprehensive Plan update. In all our planning we take into consideration the thoughts of the citizens as well as the business community so that we can hopefully minimize the negative impacts of growth while maximizing the benefits of overall development in York County.

What infrastructure projects are York’s priority?

Our roadway improvement fund is going through its fourth seven-year cycle. It amounts to 28 years of a 1-cent sales tax that funds roadway projects around the county. It has enabled us to do a tremendous amount of lane widenings and new roadways as well as safety improvement projects. In parallel, the South Carolina Infrastructure Bank just funded improvements to our interstate interchanges in Fort Mill, Exit 85 and the already started improvements for Exit 88.

Most of the water sewage availability is provided through the City of Rock Hill and the Town of Fort Mill.

The County provides water and sewer services in the more rural areas and are always making improvements to support growth and development.

Recently, we made improvements to Ebenezer Park at Lake Wylie. We also purchased 1,900 acres along the Catawba River in 2018. The intent is to conserve the property and make it available for passive recreation.

ECONOMY ROUNDTABLE

Randy Isenhower Chairman, Board of Commissioners Catawba County

Beth Jones

County Manager Iredell County

How has the budget been affected for 2021 given the pandemic and its implications?

We have always been very conservative in our budgeting. We held back on major capital projects going into FY2020, and because of that conservative mindset, we are actually seeing revenues coming in a little ahead of what was expected. We developed the K-64 initiative, a collaborative effort with our education system, nonprofits and private business to implement a lifelong workforce development process. The county has committed $1.3 million to this initiative per year over five years. Before the pandemic, we used some of the funding to distribute more than 14,000 Chromebooks to students in our three public school systems, which has been a major benefit since the world went digital due to the pandemic. This initiative is ultimately helping our current and future workforce adapt to the changing requirements needed to fill local, in-demand jobs.

What are Iredell County’s top near-term priorities?

Our No. 1 goal is to ensure everybody continues to be successful and thrive in a safe way. We have learned a lot from the pandemic experience and its wave of profound and significant change. It does not mean that our commerce has to stop, or that we cannot continue to thrive and grow. We just have to do it in a different way, and safely. The good news is we are doing it in an age where we are rich in technology and have several resources at our fingertips. We just have to be willing to take advantage of them. We are going to continue to move forward, to be successful, grow and support our businesses and industries, our community and provide a great quality of life. We focus a lot on businesses and industry and talk at length about education but there is another piece of that puzzle, which is peoples’ physical and mental health, their overall well-being. Parks and recreation is a big part of that.

What infrastructure improvements is the county considering?

The southeastern part of the county is really growing.

Out of the 12 housing projects currently in progress, 11 are in the southeast. The airport is one hour away and we offer amenities like Lake Norman, so we’re seeing growth in commercial and residential development there. As part of our strategic plan, we commissioned a water and sewer study for the southeastern part of the county to help manage this growth as efficiently and cost effectively as possible. In the last five years, we have allocated $40 million to water and sewer infrastructure.

We are actively planning for this growth.

How is the county assessing the opportunities on the industrial and logistics fronts?

We have just approved a company to do a countywide transportation study for us. All of our municipalities draft and implement their own transportation plans, including road development and maintenance. At the county level, it is critical for us to have a plan that can get our residents and our e-commerce from one location to another seamlessly. There needs to be a master plan that links each and every municipal plan to materialize a sturdy and efficient transportation network throughout the county that also links with other counties, especially considering Iredell County is surrounded by nine other counties. www.capitalanalyticsassociates.com

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ECONOMY INTERVIEW

Steady path Mecklenburg County continues to draft strategies to address its priorities, including affordable housing and health disparities

Dena Diorio County Manager – Mecklenburg County How is the county supporting small businesses throughout the pandemic?

We created a Business Leaders Roundtable, which had representation from all business sectors in Mecklenburg County to provide guidance and information over what was happening with businesses in our community and what support they needed to either stay in business or to be compliant with the governor’s orders. We created several industryspecific toolkits to help them with signage, cleaning and PPE requirements, to name a few of all the things they would need to be able to operate in a safe manner.

Out of that effort, we launched a sizable media campaign called Count on Me CLT, which was deployed in all neighborhoods across the community. We used a culturally competent marketing firm to get messaging to our Latino community, other non-English speaking residents , as well as the African American community about the importance of wearing face-coverings, washing your hands and social distancing.

What are Mecklenburg County’s plans on the affordable housing front?

Affordable housing continues to be a priority for the Board of County Commissioners. We have been developing strategies where we think we can add value and where nobody else is operating. We have been creating new programs around rental subsidy options so we can access existing housing stock. We have a few programs that we launched, such as MECK Home, in which we identify families that earn less than 30% of the area median income, some of whom live in shelters. We identify families that meet the criteria, place them into housing and provide wraparound services for them, as well as employment counseling, among other things. It has been highly successful, and it creates additional capacity in the shelter.

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What are the board’s main near-term goals and priorities?

This budget year goes to June 30, 2021. We will continue down the path we are on now. One of the largest drivers for FY22 will be revenues. We have seen revenue reductions due to the pandemic, particularly our sales tax, which is a significant revenue source for the county. We need to see what that looks like over the next few months to determine whether or not we need to make some reductions to our budget or if we have some ability to expand some services. We are going to continue to maintain the priorities that we have, including affordable housing, health disparities, community violence, early childhood education and mental health.

ECONOMY OVERVIEW

( ) in 2019, North Carolina was the 15th-largest exporter in the United States with goods totaling $34.3 billion. The state’s largest export partners are Canada, which purchases $6.7 billion in goods, Mexico with $3.8 billion in goods and China at $3.2 billion. Key exports by value are industrial machinery, bringing in $5.3 billion, pharmaceuticals with $5.1 billion and aircraft at $3.1 billion. But for the last four years, Oxford University economists say that former President Donald Trump’s punishing tariff policy against other countries cost 245,000 U.S. jobs at its peak and cut market capitalization of U.S. companies by $1.7 trillion.

Tariffs were imposed on a range of products from steel and aluminium to agricultural goods and cosmetics.

Even under President Joe Biden’s administration, at least some of the tariffs look set to remain in place for the time being as Treasury Secretary and former Federal Reserve Chair Janet Yellen said in her January confirmation hearing that she did not immediately plan to remove the tariffs.

North Carolina does not just make its money from exports; a considerable portion comes from foreign direct investment (FDI). In the state in 2019, investors spent almost $4 billion setting up or expanding businesses, a 66% increase on 2018 figures. More than 1,000 foreign-owned businesses employ more than 75,000 people in the Charlotte region. The largest international companies include Germany’s Daimler Trucks and Siemens Energy, Sweden’s Electrolux and the UK’s Compass Group. For the first half of 2020, the Charlotte region recorded nine projects representing six international countries that invested a total of $177.1 million in the economy and created more than 570 jobs. By the end of 2020, the figures had grown to $412.5 million in total FDI, 12 projects and 1,949 jobs for the year.

Looking ahead Despite COVID-related challenges, Charlotte remains in a strong position due to its economic diversity and the continued population growth from those relocating from the Northeast to the Sun Belt. Given the opportunity to work from home, many are relocating in search of a better lifestyle, and Charlotte can offer just that. Its sunny climate, access to well-paid jobs, walkable neighborhoods and young population are causing more people to choose Charlotte as a new home.

The city’s tourism revenues suffered due to the pandemic, and there was perhaps no bigger disappointment than the last-minute schedule change that moved the Republican National Convention to Jacksonville. The DNC held its renomination

COVID-19 could not hamper Charlotte’s headquarter relocation culture, evidenced by Centene’s relocation to the Queen City.

convention for Barack Obama in Charlotte in 2012, an event that drew in 35,000 people and brought in over $160 million. But businesses still see Charlotte as a business-friendly location.

Charlotte has experienced uncertainty from the pandemic like every other region and it is no secret that there are some budgetary challenges ahead, as City Manager Marcus Jones warned in the 2021 budget.

About 20% of Mecklenburg County’s workforce belongs to industries that are significantly affected by the pandemic. But the region is also bolstered by accessible real estate prices and vast job availability. According to Roofstock, Charlotte is the cheapest city to base a tech startup, a millennial destination and the metro area with the highest growth of women-owned firms.

These factors, underpinned by the city’s strong roots as a banking and finance hub, will continue to provide resilience. According to UNC Charlotte economist John Connaughton, future economic growth will depend on consumer confidence, which is already strengthening amid the efficient vaccine rollout process. www.capitalanalyticsassociates.com

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Last-mile push: Distribution needs reinforce the strength of the region’s transportation and logistics sector The backbone of the Charlotte regional economy is its elite transportation and logistics infrastructure, a particularly decisive factor with the pandemicfueled growth of e-commerce that has heightened last-mile delivery demand. The region has more than 100 distribution centers, 320 trucking firms, 3,200 miles of railway, two intermodal facilities and one of the largest airports in the country, solidifying it as a logistics hub in the United States and globally.

Also factoring into the equation are a prime — and strategic — location on the East Coast that puts it within a 12-hour drive to 53% of the national population and a skilled workforce, with 70,000 direct jobs and 140,000 related positions.

Bolstering the industry in 2020, there was significant investment in the Charlotte Inland Port facilities to increase cargo capacity. Charlotte has a thriving supply chain management industry and notable logistics companies in the region include CLN Worldwide, XPO, ProSidian Consulting and Prologis. The Queen Service Express connects the Port of Wilmington to Charlotte with next-day services.

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| Invest: Charlotte 2021 | ECONOMY: TRANSPORTATION & AVIATION

Charlotte Douglas International Airport Charlotte Douglas International Airport was ranked among the Top 10 busiest airports in the world, averaging 1,600 daily aircraft operations prior to the pandemic that halted global travel. The airport served 178 nonstop destinations and welcomed more than 50 million passengers per year. The airport is fully selffinanced with no participation from the general fund.

Charlotte Douglas International’s revenues come from the airfield, terminal area, concessions, parking and the cargo area and these are used for the airport’s yearly operating budget, as well as all capital costs.

Of course, Charlotte Douglas’ record run of passenger numbers in the run-up to 2020 was shattered after national and international travel were brought to a halt in March. In 2020, passenger traffic dropped 46% to 27.2 million, with the lowest volumes seen in April when just over 340,000 passengers transited through the airport. Although slightly down on 2019 numbers, November and December traffic saw a return almost to normality at around 2.3 million passengers, with numbers sustained by holiday traffic. ( )

TRANSPORTATION & AVIATION INTERVIEW

Clean investment Charlotte Douglas pours funds into making sure its facilities remain safe for clients

Haley Gentry Acting Aviation Director – Charlotte Douglas International Airport How instrumental has federal aid been for the airport during the pandemic?

It has been a great tool to have in our toolbox during this time. We’ve received $135 million in aggregate, of which we’ve spent nearly $36 million. It has really helped us and our partners through this period. The ability to spend the funds on things that were not foreseen or expected was critical. We invested a great deal of money in our HVAC systems in the terminal building. In fact, we have a Healthy Building Initiative that has come out of this. We’ve purchased infrared lighting, UV lighting, bipolar ionization as well as general PPE, whether for employees or passengers.

We installed over 60 hand-sanitizing stations in the terminal building. We’ve also used the funds to help us with our debt obligation, which has allowed us to work with the airlines on their cost structure. We were able to subsidize some of that with the grant funds, which in turn was passed along as savings to the airlines.

What construction projects were you able to continue during this time?

Like every airport in the country, we hit the pause button to look at our capital program and sort out what was critical, what couldn’t stop, what maybe needed to be reevaluated and represented in a different light in this environment or in a different form and then zeroing in on projects that just did not fit like they did prior to the pandemic. There were a handful of projects that we postponed but, in contrast to that, we also made firm commitments. We doubled down on our largest projects. The ticket lobby expansion (TLE) is our premier construction project right now. It’s part of our $3 billion-dollar overall expansion program, which is termed Destination CLT.

What changes do you think will remain a part of the travel experience in a post-COVID world?

In our environment, we’ve done a lot to invest in the touchless experience. That’s something that you’ll see more of in the airport environment. We’re thinking about ways to proliferate it, such as airport parking. We’ve transitioned to a system that was recently installed where you will book your parking online when you buy your ticket. We have a cashier-less pilot test going on in the terminal building now at various concessions.

We also believe QR codes menus in restaurants and bars will continue to be used. The airport has taken a layered approach to how we address passenger anxiety about the environment, including our Healthy Building Initiative. We’ve invested a lot of money in certifying our cleaning and disinfecting protocols and are one of the first airports to receive GBAC certification. www.capitalanalyticsassociates.com

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TRANSPORTATION & AVIATION OVERVIEW

The Charlotte Douglas International Airport is growing hand in hand with the region’s population and industry base.

( ) Although passenger numbers dropped dramatically, domestic cargo handling at the airport actually increased. As of February 2021, domestic cargo was up by 12.3% year-over-year, reflecting the increasing reliance on e-commerce that emerged during the pandemic. In 2019, pre-COVID, the airport, which has a $24.6 billion economic impact annually, ranked 30th nationally in total cargo.

American Airlines operates 90% of all flights at Charlotte Douglas. In June, the airline announced it would resume sales of every seat on flights, leading the CDC to call the news a “disappointment.”

American Airlines argued that significant cleaning activity was carried out both on board airplanes and at airports. In April, the airline received $5.8 billion in payroll support from the Treasury and was awarded a $7.5 billion loan facility through the CARES Act. The airline used only $550 million of the facility and 26

| Invest: Charlotte 2021 | ECONOMY: TRANSPORTATION & AVIATION

repaid it in full in March 2021. By January 2021, the airline had already started adding flights back onto its schedule, preparing to ramp up for a busy spring/ summer period. In January, more flights were added for travel to the state of Louisiana as well as a new service to Bermuda. And a nonstop service between CLT and Ontario International in California was announced in March.

Charlotte’s airport and airlines have worked hard to create a safe environment for passengers. As part of the Keep It Rockin’ initiative, a team from the City of Charlotte Aviation Department was appointed to assess safety measures and airport needs to help reduce the spread of the coronavirus. New measures include enhanced housekeeping, social distancing orders and mask mandates in airport buildings and facilities. And the measures seem to be working as a busy upcoming travel period is expected, according to the airport.

CONSTRUCTION ECONOMY OVERVIEW

Ralph Lopez Vice President of Operations – Charlotte American Airlines

How did American Airlines in Charlotte face the challenges of the past year?

As a critical component of the nation’s infrastructure, American Airlines and our essential workforce did not have the luxury to slow down. It was an incredible challenge, evolving our operation in response to an unprecedented 95% drop in demand and new safety measures. But we were able to adjust and adapt our network, and fulfill a pivotal role in keeping our region moving, which was an incredible victory.

How critical were cargo operations to your continued success?

On a macro level, the vacuum in capacity impacted the movement of goods worldwide and jeopardized the global supply chain. The American Cargo team recognized that early on and repurposed some of our dormant widebody aircraft to launch American’s first cargo-only flights in more than 35 years. Last year, American played an integral role transporting medical supplies, PPE and even COVID-19 vaccines.

Throughout March 2021, 18,000 to 19,000 have transited the airport daily and the airport is now at almost 60% of its record breaking 2019 passenger numbers.

Logistics One positive that emerged from the COVID-19 pandemic has been the surge in demand for logistics and warehousing facilities to meet the needs from the increase in online shopping as people were confined to their homes. North Carolina logistics firms have increasingly had to adapt to keep grocery store shelves stacked or ship critical supplies to healthcare providers, resulting in higher volumes through warehouses and longer hours for workers. A breakdown in the international supply chain at the height of the pandemic also led to companies to start considering having operations nearer to their clients.

Even the vaccines presented an opportunity for

What are your expectations for summer travel?

For the summer, we are estimating we will operate 50% more flights from CLT to the Caribbean and Latin America compared to 2019. We’ve also announced plans to expand to several leisure markets within the United States, Latin America and the Caribbean, which includes service to 17 new markets. We expect overall capacity to be at pre-pandemic levels.

What is your outlook for the next 18 months?

From an industry perspective, we are hopeful that vaccine deployment and post-pandemic recovery will continue. That will help to increase demand for our product. We are hopeful and expect business travel to recover even though we are far away from prepandemic levels. And from a Charlotte perspective, we are focused on having the right footprint and network to enable the recovery. www.capitalanalyticsassociates.com

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TRANSPORTATION & AVIATION OVERVIEW

As of February 2021, domestic cargo was up 12.3% year-over-year Charlotte’s storage companies, given the need to store the vials in ultra-cold conditions. As governments roll out their vaccination programs as quickly as possible, local businesses are getting involved to play their part in getting more jabs into arms. Charlotte-based SignUp Genius, an app designed for scheduling and event management, offered the platform to schedule appointments for pharmacies, county governments, universities, healthcare centers and hospitals in all 50 states. The Charlotte Motor Speedway has also played its part, by serving as a mass vaccination site.

But in the ever more competitive world of freight and transport, North Carolina and the Charlotte region’s companies need to ensure they keep up their game and buttress their reputation as a worldclass logistics player. They have already missed out on a number of opportunities from which they could take away some insights. In September, shipbuilder Huntington Ingalls Industries picked Virginia over North Carolina as a location for its new Center of Excellence. According to Business Journal, this is the seventh company that has picked Virginia over North Carolina for a new operation since the beginning of the pandemic, including Torc Robotics, which planned to create 350 new jobs in a $8.5 million investment.

Capital investment While opportunities emerged for the transport and logistics sector during the pandemic, it also benefited from billions of dollars in stimulus aid and a private sector that continues to invest in expanding operations. Under the first stimulus package in April 2020, Charlotte Douglas was the largest airport recipient in the state, awarded $135.5 million. And in March 2021, President Biden’s $1.9 trillion recovery package was passed, providing Charlotte’s airport, transit and local government a further liquidity cushion. Charlotte Douglas’ status as a travel hub means travel is returning quicker than anticipated.

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| Invest: Charlotte 2021 | ECONOMY: TRANSPORTATION & AVIATION

And growth seems to have continued in the logistics and warehousing sectors. One of the bright spots of the year was Amazon bringing online its massive distribution center in Garner, with plans to create more than 3,000 jobs in the region. The new positions pay wages starting at $15 per hour plus benefits that include healthcare, parental leave and a tuition assistance program for high demand fields. Subsequently, the logistics giant announced another distribution center a stone’s throw from Charlotte Douglas Airport to take advantage of last-mile distribution links. In June, Ross Stores announced a $68 million expansion for its distribution center in York County, which is part of the Charlotte-Concord-Gastonia MSA, creating 700 new jobs. And Charlotte Intermodal Logistics Center, a 421,00-square-foot industrial building near Charlotte Douglas, has been fully leased between May and July before its expected delivery in the third quarter of 2021.

The crunch in inventory supply is making its way to the luxury automobile industry where there are not enough cars to go around.

CONSTRUCTION ECONOMY OVERVIEW

Looking ahead For the US economy, the outlook is not all rosy.

Some economists have said that a full recovery from COVID-19 should not be expected until 2022 and a November S&P Global report warned of lingering uncertainty over the future of air travel. The agency said that the airlines and airport markets that rely heavily on international and business travel will lag those that generate most of their revenues from domestic leisure travel. But there are some silver linings for some companies in the sector. Increases in cargo have created growth for many and onshoring of supply chains is an area that has been revisited recently. Charlotte is resilient due to the composition of its economy and the region’s population growth and higher demand for last-mile logistics is only reinforcing the strength of the region’s transportation and logistics sectors.

David Irving General Manager Lamborghini Charlotte

What challenges or operational threats are you keeping an eye on?

It boils down to reaching the qualified buyer and to brand loyalty. We were the first store in the country that was built to Lamborghini specifications to reflect their new identity. We have a good, loyal following. Our business has been consistent, transmitting the guarantee that our clients can rely on us, so they don’t go anywhere else.

We make our best effort to provide a good product.

We attempt to provide sage advice when it comes to their best option between buying new, buying used, leasing, what their strategy could be after two years of ownership, to name a few of their concerns. The other primary challenge we are tackling is inventory.

What does the introduction of an SUV model say about the luxury car industry?

Fifty percent of our business is the Urus SUV. It was a massive success when it came out. We have no SUV models available for sale until June 2021. Meanwhile, we are calling people to see if we can buy them back to sell them again to people who say they have to have one. I’ve been in this business for 20 years and I’ve never seen anything like it.

What is your near-term plan of attack, especially given the supply shortage?

We’re keeping our foot on the gas on a daily basis. We will continue making a point of carefully examining our inventory and ensuring it is marketed correctly, making sure our showroom floor displays them impeccably, as intended. We will continue hitting our mark for our monthly-established goals. We’ll look at incoming cars, where our inventory is, and refresh it if need be, while analyzing the need of swapping some of the vehicles with other dealers. Projecting to a yearly basis, the core of our planning lies in the limited number of cars we get. We know when they are going to come in.

We’re hoping to close the same amount of sales we did in 2020 for 2021. www.capitalanalyticsassociates.com

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UNIONCOUNTY north carolina

With a skilled and ready workforce, low costs, and business-friendly communities, it's the perfect place for your business to grow.

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Union County: Union County checks many of the boxes companies and residents look for in a place to call home. It is business-friendly and has a balanced mix of amenities and space, while also sporting a highlyrated education system. No wonder it’s among the fastest-growing counties in the country.

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Best of both worlds: Wealth of offerings has Union County on a strong growth path Union County is the best of both worlds, where big city amenities meet a country feel to create a standout region to raise a family and grow a business. A businessfriendly regulatory environment, bustling metro areas, a range of community events, premier parks, and a rich history have helped the county transform from its rural roots to one of North Carolina’s premier live, work and play destinations.

Even during the COVID-19 pandemic, Union County experienced a healthy population growth parallel to Charlotte’s expansion, drawing families and young professionals alike. As it looks to the future, the county is charting a fresh path with the development of a new strategic growth plan that will see it through the next five to 10 years.

Key facts As one of the fastest-growing counties in the United States, Union County’s economy is rooted in three main pillars: agriculture, precision manufacturing and the aerospace industry; but its business community is also broadening beyond those pillars, demonstrating the depth of its skilled workforce. Given the county’s longstanding agricultural community, agribusiness remains the backbone of the economy, as demonstrated by the 32

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development strategy that targets businesses that can enhance opportunities and support the agricultural community. At the other end of the spectrum, the county is also home to the largest geographic concentration of aerospace companies in the state of North Carolina.

In fact, every commercial aircraft flying across the globe today has components made in Union County.

In between, Union County has a rich history of unique businesses that call the county home, such as musical instrument manufacturer Ludwig Drums.

According to the U.S. Census Bureau, the county has a total area of 640 square miles, of which 632 square miles is land and 8 square miles is water. The characteristics of the county allow it to provide substantial open space for its residents, including Cane Creek Park, an impressive regional park with 1,200 acres of active and passive recreation space, including a trophy bass lake.

The abundance of open space adjacent to the Charlotte metro area means residents have the choice of either living in a neighborhood or on a larger piece of land or farm. Many move to Union County for its residential elbow room, which only gained prominence during the COVID-19 pandemic.

At the same time, a wide variety of activities in the county attracts new and current residents. The ( )

UNION COUNTY INTERVIEW

Back to business Support for local small businesses was a key objective with CARES Act funds

Mark Watson County Manager – Union County How has the county supported businesses throughout the pandemic?

Union County was awarded $8 million in CARES Act funding and there were a number of different ways that money could be used. We were able to use some of the funding for grants for those small businesses experiencing loss of revenue due to COVID. The county originally had $1.0 million allocated to the Back to Business program. In cooperation with our Chamber of Commerce, we worked to garner support among the municipalities for this program. At the conclusion of the program, 209 businesses were helped. We granted $2.5 million worth of requests to our small businesses in need.

How is the county focusing on attracting new development?

Union County ended 2019 with a record year in commercial development related to the number of commercial buildings constructed in the county. It was the second-highest year ever in terms of dollars invested.

Things have subsided a little but we are still seeing commercial investment, with a similar level of activity in the private sector as we have in the public sector.

For the first time, Union County entered a joint venture with the town of Indian Trail and a private development company to develop a mixed-use project in Downtown Indian Trail that will become a streetscape for the area.

The city is redeveloping and updating the area and there was a lot of infrastructure on the water and sewage side that needed to be upgraded. That is where we participated. The mixed-use development will provide residential, retail and commercial spaces, which will drastically improve the area and generate revenues.

What are your main near-term priorities?

We are assessing our capital needs for education. We

have an ad hoc committee that is working right now to look at the public school system and our community college system. Union County is known for the quality of its education systems and we need to replace some ageing infrastructure and to build new infrastructure to meet tomorrow’s needs.

We are also in the process of completing our 2050 comprehensive plan, which is a long-term community planning project that sets out our short-term goals to meet these expectations. We’ve had tremendous engagement from the community on this project. We have just begun the process of updating our water and sewer system 10-year master planning process. This is a similar process in that we need to project where the bottlenecks and pockets of demand will be felt in the next 10 years and address these needs. www.capitalanalyticsassociates.com

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Michelle Lancaster Deputy County Manager Union County

How would you summarize the state of Union County?

The outlook is stable and we have been moving in a good direction, which given the past year has been frankly positive. The Union County community as a whole has a really strong foundation with good working partnerships and relationships across the governmental, private sector and nonprofit sectors, as well as the hospital system and with the university. Given these foundations, when COVID-19 hit, we were able to pull the trigger on how those relationships function and be successful in the way we managed things.

Which industries or sectors do you see carrying the recovery?

We’ve been heavily tuned into the aerospace industry.

That sector has obviously taken a hit due to COVID-19 but they are well poised for a return. Union County has its own airport with a fair amount of traffic here since unlike small regional airports, we receive international arrivals. Some growing industries like manufacturing and industrial have worked well through the pandemic.

Regarding the agriculture and food industry, we’re thinking a little differently about how to capture that side in Union County, and which industries may be attracted to that. COVID was probably a springboard to rethink how grocery stores and manufacturers get products closer to where they are and that requires different ideas around cold storage and many other issues.

What makes Union County different?

A nuance about Union County is that it is focused and targeted. I think in the thread of that is the idea of collaboration and cooperation in which everybody is not just doing their own thing but trying to have a unified approach. However, we also seek to attract people with different talents and experiences to help to ramp up the idea of collaboration and culture, while becoming more sophisticated and at the same time maintaining that small-town feel that people like to see.

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Union County Human Services helped to empower and assist residents throughout the challenges of 2020.

( ) county seat, Monroe, is a quaint yet thriving hub for shopping and restaurants. There are several locallyowned boutiques, as well as breweries and restaurants, alongside the newly-renovated Dowd Theater that will become a hub of activity once COVID-19 restrictions are lifted. In addition to the Dowd Theater, the new Monroe Science Center will be opening in late 2021 and is expected to breathe new life into downtown Monroe.

A Heritage Festival is held annually at the Agricultural Center, led by the Union County Antique Tractor Club, with the next event scheduled for fall. The county has a new Special Events Center that is sandwiched between Jesse Helms Park and the Agricultural Center. Union County is the home of two renowned events that each draw tens of thousands from across the country every year: Queen’s Cup Steeplechase and the Warbirds Over Monroe Air Show.

The county has remained resilient through the COVID-19 pandemic. Union County Government never shut down during the pandemic, but it did innovate quickly and adjusted operations to enable it to deliver all services virtually to best serve residents while protecting employees. In an era when local governments are not necessarily known for being technically savvy, Union

UNION COUNTY OVERVIEW

County Government set up systems within weeks to enable employees to work from home and offered staggered schedules, with no layoffs in 2020. While some government organizations were not able to offer employees an annual cost of living or performancerelated pay increase due to reduced tax revenue, Union County Government was able to continue annual pay increases based on performance. Union County also provided $2.5 million in Back to Business grants to 209 small businesses during the peak of COVID restrictions to aid in their continuity when the crisis subsided.

History Located in the Piedmont region of North Carolina, Union County was formed in 1842 from portions of Mecklenburg and Anson Counties. After disagreement on its name by the Democratic Party and the Whigs, Union County was agreed upon. Early inhabitants of the area included the Waxhaw and Catawba Indians and settlers were German, Scottish, Irish, English and Welsh. The City of Monroe was a cultural and business hub that touted the presence of two Seaboard railroad stations, something not normally seen in a town outside of a large regional center.

This rich culture has continued, and the county has a variety of notable museums and cultural centers, including the Museum of the Waxhaws and the Andrew

Jackson Memorial. Cultural institutions include the Union County Heritage Room, the Rainbow Theater and the Waxhaw Historical Festival and Drama Association. The Jesse Helms Center is an educational institution promoting free enterprise and other values championed by the Monroe native and longtime U.S. senator. Other events that regularly take place across the county include the Blooming Arts Festival, the Randy Travis Music Festival in Marshville and the Weddington Fall Festival.

General economy Current estimates have Union County’s population numbered at 240,000 with a median age of 38. As of February 2021, the unemployment rate in the county was 4.5%, the lowest in the region. It is also much lower than the U.S. average of 6.3% and a testament to the strength of its manufacturing industry. Even at the height of COVID-19 when unemployment soared across the country, Union County’s peak was 10.2% in April and May, far below the 14.7% and 13.3% U.S. averages for those months. The county has a median household income of just over $80,000 and a median property value of $293,000, with an 80.5% homeownership rate, far above the U.S. average of 65.8%. In 2018, the most common industry was retail trade, followed by manufacturing, healthcare and social assistance ( )

Maria Pharr President – South Piedmont Community College

Our goal is to continuously strive to meet the needs of our employers. That requires us to visit our local companies and stay connected with the immediate needs and long-term trends of relevant business sectors. To meet these goals, we continuously evaluate our programs to ensure that they are leading to careers with living wages, have outcomes matched to employer’s needs, and embed coursework that leads to national certifications. A great example of our efforts to align programs to market needs is a partnership we developed with The Ironpeddlers in Monroe.

We offer a heavy equipment operator certification in partnership with the company which uses curriculum from the National Center for Construction Education & Research (NCCER). South Piedmont also offers an apprenticeship program which currently provides 60 students with opportunities in nine companies to earn an associate degree, journeyman’s certificate, or a production technician certificate while they also earn a paycheck.

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UNION COUNTY INTERVIEW

Road 2 Wingate Collaboration provides transfer benefits for students while encouraging diversity

Rhett Brown President – Wingate University What is the vision behind the Road 2 Wingate initiative with South Piedmont Community College?

We have a great, long-standing partnership with South Piedmont. One of the things that makes college transfers hard is the business and bureaucracy side of things. We work specifically on smoothing the curricular pathway, adding things such as counseling to allow them to move seamlessly from institution to institution.

We have also made it so the student pays a maximum out of pocket each year of $2,500. We can do that with a great state fee-based program, a federal-based program and a very generous foundation. This is an independent college and a public junior institution.

We can give the student a much more personalized experience than the larger four-year institutions. We do not often see this kind of collaboration so we are very proud of that.

How have efforts to expand your public health program progressed?

We are still exploring both the bachelor’s and master’s in public health and we hope to start both those programs in the fall of 2021. We should get feedback from some of our accrediting bodies. We have done the legwork to get to this stage and we’re ready, pending the approvals. We think we’ve made a good proposal and we are aggressively pursuing these programs.

How is the university bolstering its diversity and inclusion efforts?

We have been thinking about this for a long time. We understand we do not need another elite institution in this country. We need to serve a much broader population that is perhaps not so socio-economically robust. This often includes first-generation U.S. citizens or underrepresented communities. We have seen our level of diversity increase over the last five

years in a significant way. We have created programs like Road 2 Wingate and our partnership with Golden Doors Scholars to enroll these students. Now the question is on diversity and inclusion efforts and we have some work to do in diversifying our faculty and staff. We have a diversity, equity and inclusion council.

We are trying to link efforts to ensure we are getting resources to where they are needed.

How has your strategic planning evolved?

Outstanding student outcomes, a thriving enrollment and a financially sound model will continue to be an important part of what we do. COVID has accelerated two things: the enhancement of technology in our educational delivery and the value of interpersonal interactions in education. www.capitalanalyticsassociates.com

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UNION COUNTY OVERVIEW

Dennis Moser Founder & President – The Moser Group, Inc.

(The Atrium Health Union West) is one of the biggest projects ever undertaken in Union County, requiring the future hiring of 850 employees. Atrium Health is on track to open, there is a huge investment of $125 million in the first phase and $125 million in the second phase. We have also purchased 124 acres near Atrium Health Union on Highway 74 where we are developing an Opportunity Zone project. This will include a ground lease for a convenient store and an 80,000-square-foot cold storage facility.

( ) and educational services. Finance and insurance rounds out the Top 5. Five organizations in the county employ more than 1,000 people: Union County Public Schools, Tyson Foods, ATI Specialty Materials, Union County Government and Harris Teeter.

For fiscal year 2021, the county adopted a budget of $169.3 million, a 1% increase over the fiscal year 2020 budget and the fifth year of no countywide property taxes increases. The majority of the 2021 budget comes from ad valorem and local option sales taxes, while 10.3% comes from federal grants. In 2020, the county maintained its AAA bond rating by all three rating agencies, an accomplishment earned by only a few counties in the state.

COVID support initiatives When COVID-19 hit and the North Carolina Governor issued a Stay at Home Order, residents of Union County, like many others all over the world, looked to local government for support, and Union County responded. The county was in a good position as it already had a long-established organization to facilitate the distribution of emergency assistance through the Union County Crisis Assistance Ministry program. The program was developed in 1982 to provide administrative funding in partnership with local churches to be used for families in need.

Within one month of the pandemic hitting Union County, the economic impact to residents was quickly evident. In April, Union County Government collaborated with numerous community partners to pool resources into one portal that would be easy for residents needing a wide variety of support during a challenging economic crisis. The UC CARES 38

| Invest: Charlotte 2021 | UNION COUNTY

The county’s budget for FY21 is $169.3 million, a 1% year-on-year increase (Union County Community Assistance & Resources Emergency Support) webpage was launched and promoted by all community partners and on a variety of platforms. The resources on UC CARES vary from existing, ongoing programs, to programs specific to COVID-19 impacts.

In September, upon receipt of federal CARES Act funding, the county implemented the Back to Business program, for which it initially set aside $1 million to help COVID-impacted small and micro-businesses with access to capital. The program provided one-time grants of up to $25,000 to qualified businesses with 50 or fewer employees. Once Union County leadership recognized the need from applications, they expanded the budget and at the conclusion of the program, the county allocated $2.5 million to 209 small businesses under the program.

New York-based LISC also allocated more than $62 million in nationwide small business relief grants for COVID-impacted small businesses. To help residents retrain and reenter the job market, South Piedmont College’s Small Business Center hosted seminars and

CONSTRUCTION UNION COUNTY OVERVIEW

special events, and offered a low-cost entrepreneurship program, confidential counseling and referrals.

With news of a vaccine to fight the virus arriving in December 2020, attention turned to the vaccination campaign and getting back to some sense of normality.

As expected, demand exceeded supply and Union County followed the prioritization guidelines set by North Carolina Department of Health and Human Services. Union County Public Health has been recognized by residents and peer organizations as a model for their COVID-19 vaccination program.

Working with community partners, Union County held multiple large-scale vaccination events early in the vaccination process, including successfully accomplishing a 5,000 dose, two-day event that vaccinated all education and childcare workers in Union County who desired a shot within two days of eligibility.

Infrastructure and Public Works Union County’s innovative approach to infrastructure in several areas has yielded multiple landmark projects that serve the area businesses and residents as well as the region. One such major accomplishment of the last 30 years was the completion of the Monroe Expressway, which provides fast and efficient transport of workforce and goods through the county.

It also allows for the better utilization of U.S. 74 as the primary internal roadway and retail corridor for the county.

On the water infrastructure front, the county is located between two major rivers, Catawba River to the south and Yadkin River to the north. With no major body of water or river within the county limits, leaders leaned into regional partnerships to ensure that businesses and residents will have sustainable, highquality water supplies for decades to come. Since 1993, Union County and Lancaster County Water and Sewer District have been in an innovative, interstate joint venture to supply water to both of their customers from a water treatment plant located in Lancaster, South Carolina.

In similar fashion, Union County collaborated with Stanly County and the Town of Norwood in the early 2000s to work on a plan to bring a second sustainable, safe water supply to Union County businesses and residents. After decades of planning, the first segment of the Yadkin Regional Water Project pipeline was laid in the ground in April 2021. Once complete, this landmark engineering project will supply the county with a sustainable water supply for the next 50 years at the very least. ( )

Melissa Merrell Chairperson Union County Public Schools

How would you sum up where the public school system stands today?

We’ve had to become a lot more flexible with our employees and students. Traditionally, students would come into the classroom and be taught face to face.

Depending on their parents’ flexibility or each individual parent’s desire, we had to ensure we could teach our students face to face or virtually during the pandemic.

We needed to be able to honor our taxpayers’ wishes to either bring them into the schools safely and socially distanced while accommodating the wishes of those parents who did not want their children with their peers or in a public setting, preferring a virtual teaching option.

We’re getting back test results from the fall for all of our students, virtual and in person. Our data shows children really do need to be in person five days a week and with their teacher to receive the best education possible for college and career readiness or even grade promotion.

What is your near-term focus and outlook?

Now that we have some data from our students during COVID-19, we anticipate we’ll be hearing more about learning loss. Union County Public Schools is already talking about tutoring, summer programs and software programs to help our families and our students recapture those important building blocks that they need for promotion to the next grade and to work toward graduation. Pre-COVID, we were all about college and career-readiness. Post-COVID, we are going to be laser-focused on addressing learning loss because the reality is that our students lost half a year in 2020. 2021 has been rocky, with either two days in class, four days in class or all virtual. We are the sixthlargest school district in North Carolina and ranked No. 3 out of 115 districts for academics. Union County Public Schools will work tirelessly toward getting our students back where we expect them to be when they earn our diploma. www.capitalanalyticsassociates.com

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Market voices: Mayor’s corner

Michael Alvarez Mayor Town of Indian Trail

Distribution and manufacturing are big industries in Indian Trail. Being located next to U.S. 74 provides businesses with easy access to Charlotte, the Charlotte-Douglas International Airport, Wilmington, and the I-485 Beltway toward Charleston. Because of Indian Trail’s growth, the town is starting to see growth in a variety of industries, including hospitality, insurance, and retail. According to Monroe-Union County Economic Development, since 2017, Indian Trail has welcomed eight major projects totaling $49.1 million of investment and creating 215 jobs. This equals 26% of all projects, 12.2% of all investment and 37% of all jobs countywide.

The housing market is pretty much the way it is everywhere else.

Houses are selling as fast as you can put them on the market. Some of them are getting bids higher than the asking price. Real estate is booming here.

We’ve got housing developments coming into the city for approval at rates we have not seen in decades, with several subdivisions approved. We are a full-service city, so it is important that we maintain our services, and that infrastructure is doing well. We have plenty of water, electricity. All of our systems are up and running.

Marcus McIntyre Mayor Pro Tem Town of Indian Trail

Mayor City of Monroe

Many residents have given input into the (2041 Comprehensive Plan) and the issue we hear most is regarding traffic and the quality of roads. Some residents also voiced concerns regarding other infrastructure items like schools and water/ sewer capacity. Indian Trail has been actively working with the DOT since 2010 in an effort to widen Old Monroe Road. Indian Trail has committed $5 million through bonds that were approved by residents in 2011 for the widening and improving of the Old Monroe Road corridor, expanding it from two to four lanes. That project was expected to launch in 2020, but due to the pandemic, the loss of revenue within the DOT and other related issues, the project has been delayed. The town has already paid $1 million to the DOT to get that project started.

As we map out the town’s future, there are some key infrastructure initiatives in the pipeline. We are addressing the needs of traffic circulation around and through Downtown Waxhaw. The lion’s share of our traffic goes through that area, especially during any rush hour and for many of these people, Waxhaw is not their final destination. They come through, then travel beyond our Town in every direction. That’s why one of our plans is to focus on the completion of our by-pass parkway projects, which will allow traffic to flow around and not through us. Thus, reducing congestion.

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| Invest: Charlotte 2021 | UNION COUNTY

Ron Pappas

Mayor Town of Waxhaw

UNION COUNTY OVERVIEW

( ) The county is also home to the Charlotte-Monroe Executive Airport. It is the only executive airport between Atlanta and Washington D.C. that has U.S. customs, which makes it an attractive alternative to Charlotte Douglas International Airport and is the home of several corporate aircraft.

But transportation and pedestrian traffic issues still arise within Union County due to its growing population. The rural nature of the county means that until now, public transportation development has been limited, yet major infrastructure problems remain less prevalent. In 2014, Union County determined it needed a list of high priority intersections to focus efforts with its municipalities and the North Carolina Department of Transportation (NCDOT) when responding to project solicitations for funding, which resulted in the Critical Intersection Program. The program was updated in 2019 and since then, Union County has received two grants to develop designs and cost estimates for 11 of the 15 intersections. Work on the second group of intersections is expected to be completed by mid-2021. In the same year, the county developed the Multimodal Transportation Plan in a bid to incorporate walking, bicycling and public

Charlotte-Monroe Executive Airport is the only executive airport between Atlanta and Washington, D.C. with U.S. customs transit into the community, improving all aspects for residents in terms of quality of life.

The county will address these challenges and others in its comprehensive plan. It promotes highdensity residential, retail and employment options in designated areas, convenient accessibility between retail, residential, and employment land uses and complementary development patterns along corridors.

The plan also advocates for the preserved rural

Chris Plate Executive Director & Economic Development Director Monroe-Union County EDC

What sectors are driving new investment?

Initially, with the effects of COVID-19, we saw an increase in medical-based manufacturing projects, ranging from PPE to pharma. As 2020 continued, the investment types became broader with the growth coming into the Charlotte Region from states with stricter lockdowns.

Union’s superior school system and the quality of life here is a magnet for both manufacturing and residential growth. Now into 2021, many sectors are providing capital investments. Construction materials, distribution and foods-based agri-business are leading the way. Construction materials are solely a result of the population migration and new home construction in the Southeast, but the distribution and food markets are related to the significant increase in online shopping and more focus at home. The rapid growth of e-commerce has led to the creation of more distribution centers and more trucking services. The developers are transforming as well. Business developers are moving more into industrial development due to the decreased demand for traditional office development.

How would you gauge the agriculture sector?

There are two big sectors for Union County’s economy: aerospace manufacturing and agri-business. The EDC looks to work with the producer side of our agricultural community. Afterall, the Union County agriculture community is one of the Top 3 in the state, they know what they are doing and have tremendous resources with the NC Agriculture Extension office here. We provide value to the agriculture community by recruiting and nurturing the value-add processing their crops or products need close to home. Right now, you have to drive hundreds of miles to process many of the products grown here. There are many inputs to the costs of getting a product to market. These expenses reduce the overall profit to the farm community and put stress on the base of the agri-business we want to support. We want to be able to process as much of the crops here.

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character outside of water and wastewater coverage areas, recognition and support of agriculture as a key industry, and enhanced community connections for arts, agritourism, and parks and recreation.

Through this comprehensive plan, the county envisions regulatory changes surrounding stormwater regulations, well testing and minimum site standards around new schools. It also lays out new programs and initiatives, including a litter task force, and a quarter cent sales tax to fund transportation projects subject to voter approval. The comprehensive plan, Union County 2050, was unanimously adopted by the 10-member Coordinating Committee in February 2021 and is pending approval by the Board of Commissioners.

Key sectors Agriculture Despite increased urbanization, agriculture remains an integral part of Union County, which still has an abundance of agricultural space, including more than 186,000 acres of farmland according to the latest estimates. The Catawba Land Conservancy protects more than 15,000 acres of land within the six-county local area, with the goal of protecting 50,000 acres by 2030. The total market value of products sold in the county was almost $482,000, representing 4% of the state’s agricultural sales. The majority of Union County’s agricultural sales comes from livestock, poultry and animal byproducts, and the county is the number two producer in the state for grains, oilseeds, dry beans and dry peas. Ninety-seven percent are family-owned farms.

Aerospace There are 24 aerospace firms in Union County, of which 19 are within a 7-mile radius. Figures show this cluster represents almost $1 billion in announced investment and nearly 4,500 employees. Union County’s aerospace cluster is recognized as a national leader in aerospace recruitment. So far, it has been recognized in the nation’s Top 5 in aerospace recruitment, the Top 10 of aerospace clusters in the Southeast and the premier Aerospace cluster in North Carolina. The cornerstones of the cluster is ATI Specialty Materials and Collins Aerospace, and continues to expand within the county.

Manufacturing Manufacturing in Union County employs 15,000 people at a weekly average wage of $1,038. There are 192 manufacturing facilities in the county, including major employers Tyson Foods, ATI Specialty Materials,

UNION COUNTY OVERVIEW

Allan Baucom Owner – A.L. Baucom Family Farms

Agriculture is the No. 1 economic focus in Union County by far. It is also No. 1 in the state. It drives the economy. Tourism is No. 2. So, is agriculture important? Absolutely. Union County is No. 1 in wheat production, we’re No. 2 in corn production, and second or third in poultry and beef production. Agriculture is very important and critical. I can go anywhere in the country, if not the world, and Union County is in the very top tier in the use of technology. We are progressive, adaptive, adoptive, forward-thinking. We have a really good agricultural business climate here. It’s easy for people to think of the agricultural center of North Carolina as being east of I-95, where it’s more level and less populated. When they find out the impact and influence that Union County has, they’re very surprised.

Pilgrims Pride, Charlotte Pipe and Foundry, Windsor Window, 3M/Scott Safety, and Consolidated Metco.

Healthcare The healthcare industry employs 3,868 in Union County, paying a weekly average salary of $850. As of 2019, there were 221 physicians in the county, equating to 9.3 physicians per 10,000 of the population. There are 47.3 registered nurses, 3.7 dentists and 7.9 pharmacists per 10,000 of the population.

Education The percentage of Union County that has graduated from high school or higher is 89.6%. The sector provides about 7,000 jobs at a weekly average wage of $844. The county is also home to prestigious higher education institutions, including South Piedmont Community College, one of the top community colleges in the state, and Wingate University. The K-12 graduation rate in the county is 93% and Union County is home to some of the best schools in the state, with three elementary schools – Weddington, Marvin and Rea View – making the Top 10 in North Carolina, according to a SchoolDigger ranking. For the 2021 school year, there are 15 top private schools in Union County, serving 2,194 students. Minority enrollment is 38% of the student body, and the student:teacher ratio is 10:1. The county also boasts one of the Top 20 North Carolina charter schools, Union Academy.

Retail Retail in Union County employed 7,621 people as of the second quarter of 2020, with a weekly wage of $595 on

average. Total local retail sales in the county, including food and drink, account for $2.98 billion across 1,213 businesses, making the average sales per business around $2.5 million.

Looking ahead Given the strength of its manufacturing sector, Union County was less impacted than most by the COVID-19 pandemic. However, authorities are maintaining support with continued initiatives to help those industries most affected, including its sizable retail sector. A 1% budget increase along with no countywide property tax increases in five years is a testament to the conservative budgeting of the county government, which has been recognized in several consecutive years with prestigious national awards for government finance.

Union County is where ideas take flight. From small businesses, to large industries and educational institutions, the county cultivates knowledge and ideas into innovative, practical applications. And it’s no wonder Union County is attracting new residents and businesses – people are discovering an environment of independent thought bolstered by a community of support and enthusiasm.

Capital Analytics would like to thank Union County for its contributions in compiling this chapter.

To learn more, visit their website at: www.unioncountync.gov

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Professional Services: From accountants to lawyers, the professional services segment of the economy has undergone unexpected changes in the past year. But the pandemic that decimated some sectors has been a boon for these services, underpinned by Charlotte’s strength as a financial capital.

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Vital role: The professional services sector has played a key part in supporting individuals and businesses throughout the pandemic Breakneck economic growth over the past decade has given Charlotte a robust professional services sector.

Given what is, in terms of assets, the second-largest banking center in the United States, as well as being a magnet for corporations seeking to relocate, there is a great deal of demand on hand to occupy a diverse set of these services. Accounting, financial advising, insurance, legal and private equity all play a vital role in the vast spectrum of business being done in Charlotte.

Although the COVID-19 pandemic upended many of the norms in these sectors, accountants and law firms were among those kept busy with the economic fallout as well as the monumental stimulus measures taken by both the federal and state governments to keep the cogs of the economy moving. Financial advisers, wealth managers and private equity groups were quick to see the multitudinous opportunities at hand. On top of a landscape irrevocably altered for its clients, the professional services themselves had to adapt to the new norm. These sectors were less affected by the move to remote working than others have been, and, indeed, investment in IT systems paid off handsomely for those that had made the move toward digital transformation.

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| Invest: Charlotte 2021 | PROFESSIONAL SERVICES

Landscape Charlotte’s economic rebound since COVID-19 knocked the bottom out of the economy in March 2020 has been impressive. Many performance indicators show that the economy is again growing robustly, with new deals and renewed interest abounding. This all bodes well for the professional services — financial, accounting and legal, among them — that depend on vibrant economic activity for their own success. Indeed, Charlotte’s relatively painless recovery has solidified its place as a boomtown for the times, a city and a region that — thanks to an ideal geographic location in the East, excellent schools providing skilled labor, and a less oppressive system of taxation — has been attracting businesses from around the country and reporting strong growth numbers.

Just prior to the pandemic, the Economic Development Partnership of North Carolina (EDPNC) reported that 2019 was the state’s best year yet, when Forbes ranked it as the third-fastest growing big city in the United States. In that year alone, the EDPNC was able to help steer 21,600 new jobs to North Carolina through corporate relocations and expansions. Now, the same body is preparing for a post-COVID economy, ( )

PROFESSIONAL SERVICES INTERVIEW

Ticking the boxes Promising economy, airport proximity and quality of life are the determining factors in headquarters decision

Matt Snow CEO – Dixon Hughes Goodman LLP (DHG) Why did DHG pick Charlotte for its headquarters?

We are the largest professional services firm headquartered in Charlotte and in the greater Southeast region, which is something we are really proud of. We chose Charlotte for many reasons, including the promising economy and business environment, proximity to a major airport and great quality of life. These are three factors we consider when expanding into any new market and were especially important when deciding where to put our headquarters. Charlotte has been great to DHG and we are very optimistic about the future of this area – between the strong talent pool and vibrant economic development – the future continues to look bright. We are very fortunate to call Charlotte home.

How did you help businesses navigate the CARES Act? We needed to help our clients understand the different provisions of the CARES Act. We had to do this quickly but we also wanted it to be consistent, innovative and thoughtful, efficient and properly risk-controlled. We quickly built a command center, as part of the DHG Solutions Lab, to centralize the CARES Act knowledge distribution. Although never contemplating a global pandemic, a few years ago we created the Solutions Lab, which focuses on the incubation, development and deployment of high value, relevant solutions for clients in today’s rapidly changing business environment to handle the new and emerging issues they face. The Solutions Lab is responsible for digesting the constantly evolving regulations, educating our team and getting materials out to our clients. They listened closely to our teams and our clients and identified new opportunities to help our clients understand the CARES Act. How is the firm involved in the community, particularly in terms of inclusion and diversity?

Shortly after we went into full virtual mode, the country began to witness a number of difficult events involving racial injustice. The death of Ahmaud Arbery really hit me, as a Georgia native, followed so quickly by the death of George Floyd and others. We quickly knew that the country was in crisis, and many of our team members were reeling from what they had witnessed and, as we would learn from many, from a lifetime of feeling marginalized. As a firm, we started incorporating discussions about race and inequality into our weekly and biweekly conversations within the firm. We hosted a session called “My Experience: Black in America,” to hear from DHG teammates about what it is like to be Black in America and at DHG. More than 1,600 individuals joined the session and asked more than 100 questions to learn and broaden their perspectives. www.capitalanalyticsassociates.com

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Malcomb Coley Central Region EY Private Leader & Charlotte Managing Partner EY

What are the toughest challenges for the business sector a year into the pandemic?

The toughest challenge is the human element of engaging people. We learned we can operate well in a remote setting, but we’re challenged with finding a replacement for being in the office and just haphazardly running into one of your colleagues or, at the spur of the moment, going to see one of your clients face to face. That is the key piece where creativity and innovation is required.

( ) and, as of last summer, it had nearly 40,000 jobs in the pipeline, 122 business recruitment deals and 45 regional investments. Though the number of deals is less robust than before the pandemic, it is not a hugely significant decline: about 70% to 80% of what had been transpiring in the same months in 2019. Additionally, this is a number due to increase as the vaccination rollout continues apace and further steps are taken to control the virus.

While the pandemic has been especially challenging for small businesses, Charlotte has been less severely affected than other parts of the country. According to a study by SmartAsset, a fintech company, Charlotte ranks fifth in the nation in terms of small-business optimism: 26.6% of small businesses are looking to hire new employees, 32.3% are operating at normal levels, and while only 24% reported having at least three months’ worth of cash on hand, it had the smallest percentage of businesses in the country — 39.6% — that didn’t foresee returning to operating levels after the next six months.

EY opened a wavespace and design studio in 2020 in Charlotte. What progress has been made?

We were really excited when we inaugurated the wavespace and studio in January 2020 up until the pandemic hit. Since then, we’ve been doing virtual wavespace design sessions where we work with clients, the community and others on how to come up with digital, transformative, creative solutions to solve complex problems. The studio is centered on some of the most critical issues our clients in the community are facing. Using digital technologies, emerging technologies and innovation, we try to help them solve those complex problems. It encompasses all the disruptive technologies poised to profoundly change the world as we know it: automation, robotics, AI and blockchain. It combines digital with those transformative technologies to help companies become more creative.

What are the main priorities or goals for EY over the next year?

First, the vaccine rollout is extremely important, while at the same time we need to make sure people don’t let their guard down regarding the importance of social distancing, wearing your mask and washing hands. We must keep our guard up and ensure we keep everybody safe and healthy so that we can get back to some normalcy. Before then, we have to defeat this virus. Once we do that, we can have a healthy and thriving economy.

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The professional services sector has been key in guiding business owners through the pandemic-related challenges.

PROFESSIONAL SERVICES OVERVIEW

Stuart Goldstein Managing Partner, Charlotte Office – Cadwalader, Wickersham & Taft LLP We were all taken by surprise by how quickly we all adjusted to virtual meetings and how well Zoom technology has met our needs to stay connected with our clients and our teams. And, yes, we’ve all met our clients’ and colleagues’ young children and pets, and I think some of those “interactions” really helped break the ice and added some reality in what was a tense period for everyone.

So Zoom is here to stay, and I would expect that this technology will get even better in the months and years to come.

But we, like many others, are in a client service business. If our clients need to see us or if we think it is best for our clients for everyone to brainstorm in a room together, that is exactly what we will do. Business travel will come back but, like anything else, it will change. Client relationships are built on trust and confidence, and there really is no substitute for in-person interactions.

As businesses get back to work, expand or arrive in Charlotte, they are facing a new landscape in which COVID has in many ways changed the lay of the land.

This is especially true of the professional services sector. Traditionally, such companies were very much tied to office space. As offices have become unfeasible in the climate of the pandemic, they have proven resilient in the move to remote work. Often these professional services are more suited to remote, and the spring of 2020 saw a rapid transition to at-home work. Companies have had to invest in updating their IT infrastructures accordingly. Even still, the shift has its limitations — some work is best done in groups and face-to-face meetings — and many offices that maintained a barebones staff throughout the duration are already looking at ways to bring people back. To this end, a move towards proactive cleaning, in which an office space undergoes more common deep cleans is becoming more common as a way of staying ahead of the virus.

The pandemic has also led firms to reassess their approaches to nonfinancial risk, chief among these being cybersecurity, the strength of third parties and vendors, and regulatory compliance. Managing cybersecurity risks has become more difficult as people move to at-home work and office systems become more thinly spread. Part of the problem, experts point out, is that cybersecurity is often overseen by a technical staff while fraud specialists — who focus on reducing loss — are treated as a separate www.capitalanalyticsassociates.com

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Clark Goodman Charlotte Office Managing Partner Womble Bond Dickinson (US) LLP

Which of your practices or services have seen the most growth over the past year?

What’s really changed in terms of the demand for our practices and services has been driven by the changing circumstances of our clients. Initially, when the world went into a remote work mode, there was some slowdown in some areas, as everyone waited to see what the world was going to look like. We saw a shift in terms of the demand in certain areas. For example, where real estate development attorneys may have been focused on specific construction projects or financing, suddenly those projects were put on the back burner, while they turned their attention to working with commercial landlords, who were dealing with requests from tenants to negotiate modifications to leases, planning for potential defaults.

How is the firm deploying technology to adapt to the new environment?

We’ve become so conditioned to these video conferences that even some communications that would have taken place over the phone before are now done via video. We’ve increased our face-to-face interaction, in a virtual sense. We’ve found ways to convene meetings with other parties and to proceed with litigation or meditations or scheduling conflicts.

There are also some benefits on the efficiency side.

There are cost savings, obviously, if you don’t have to travel and spend the time and the cost of being in other locations. I think there’ll be some long-term benefits as well, in that there could be an adjustment in the marketplace in terms of the need for physical space and staffing across offices. We now know that we can work across geographic boundaries to be more efficient, and there’ll probably be some adjustments regarding the use of space. We also employ some artificial intelligence. If we have a project with a large number of documents, like a contract review, rather than hire someone to review those manually, we have AI that can do that at a fraction of the cost.

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entity. Therefore, risk experts are not working with the people making business decisions; the dots are not being connected between threats, whether they be financial or nonfinancial, and the defensive strategies of companies are not correspondingly adequate. Risk managers should have a bigger role in nonfinancial decisions, and they are hoping that the COVID-19 pandemic has been the sort of disruption that might catalyze this kind of change.

The professional services industries have also had to navigate stimulus measures taken by the federal government to combat COVID-19’s effect on the economy. Most notably, the Coronavirus Aid, Relief, and Economic Security (CARES) Act injected $2.2 trillion into the economy in 2020. For small businesses, this was distributed in the form of loans through the Paycheck Protection Program (PPP). By July 2020, according to the US Small Business Administration,

The BB&T-SunTrust merger brought an additional $442 billion in assets to Charlotte for a total $2.7 trillion held by its banks 119,981 small businesses had received $12.4 billion in PPP loans; 50,971 businesses had received nearly $3 billion in Economic Injury Disaster Loans (EIDL); and, through the EIDL Advance program, $348 million was granted to 106,000 North Carolina businesses that does not have to be repaid.

Many rules in diverse sectors were affected in an effort to stave off economic catastrophe. Both legally and operationally, professional services were profoundly affected, and much effort on their part over the course of the year has gone into navigating these new protocols, especially on behalf of clients who have been unclear regarding the shifting winds from the stimulus.

In the United States, professional services generate about $2 trillion in combined revenue (2018), according to SelectUSA. In 2018, the sector provides 9.4 million jobs nationwide. North America is the ( )

Market voices: Now trending ...

Tom Gibson

President & CEO DecisionPathHR

We continue to look at technology to make us more efficient. The more that we embrace technology, the more time we have to spend with our clients.

So we’re not pushing them totally to a tool and having them do everything online, but once we get all of the paperwork done, it allows us to spend more one-onone time together. I find it better all around for our customer service to have that technology in place. It benefits us and our clients that much more.

From the application process to all of the forms, backgrounds, tax documents — the only thing we can’t do virtually is drug testing. Otherwise, the technology performs any onboarding process that we have to conform to for the federal government and that we do to make sure we’re getting our client what they need in an employee. Plus, more and more of our clients are hiring people full time.

Forty percent of the people who come through our door are hired full time.

I think there’s a global trend toward more contingency search. Ten years ago, if we were considering VP level engagement for any client, very rarely would we entertain it on a contingency basis. Now, we’re seeing it more and more. We are called PeopleSuite based on our rationale of wanting to offer a suite of people-related services to our clients. Most firms specialize: they’re either a retained search firm, or they’re a contingency firm, or they’re contract staffing. We believe that we can execute each of these strategies extremely well and meet our clients where they need us. We’re also seeing technology have a major impact on the identification of available talent in the marketplace. We have artificial intelligence capabilities within the tools we use to help us find and connect with potential candidates. These allow us to identify people that clients can’t find on their own. It’s extraordinarily powerful.

Jay Wade

CEO Wade Associates, LLC

David Preston

Co-Founder & CEO PeopleSuite

Looking back at the SARS breakout, the insurance industry had to react to that. Insurance companies put wording into their policies that would exclude how those policies would react to pandemics or virus outbreaks, essentially saying that in the event of a shutdown, such as what happened with COVID, the business interruption policies were not going to respond. Those policies have now been tested in many court cases. There have been a few where the courts declared that those policies were not explicit, not ironclad in their exclusion, so they allowed these cases to go forward. For the business owners who were in dire need of that, it was a good thing. As far as the insurance industry is concerned, they were not equipped from a monetary standpoint to deal with the types of claims that might come up as a result of this pandemic. We’ve yet to see the finish line on this but it would have a very big impact on the insurance industry’s ability to respond to the things that they do underwrite and prepare for, such as the fires, catastrophic windstorms and hurricanes that happen all the time. We’ve yet to see how that’s finally going to pan out.

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PROFESSIONAL SERVICES OVERVIEW

( ) largest region for the sector, accounting for 37% of the global professional services market, Financial center Charlotte has a lot recommending it as a regional financial center. With $2.3 trillion held in its banks, the city is the second-largest banking center in the United States. According to the Charlotte Regional Business Alliance (CRBA), another $442 billion in banking assets came to the region with the merger of SunTrust Bank and BB&T to be added, increasing the total assets by 20% to $2.7 trillion. The merger was completed at the end of 2019 to create Truist.

Led by major institutions that are headquartered in the region, such as Bank of America and Truist, the city is a major destination for corporations. With its 2.5% effective corporate tax rate, many financial companies are realizing that they can get a better deal there than in the traditional centers of New York City and Chicago. Encouraging this economic growth is Charlotte’s booming population, which has grown by 15.2% since 2010.

The city is well-positioned in the heart of the Southeast while also being in the center of a square of powerhouses that are on the region’s fringe: Texas, Florida, the Middle West and the Washington-New York-Boston Northeastern corridor. It is also attracting the youth of the state’s many top schools, is increasingly diverse, and has a booming restaurant scene as well as many entertainment offerings (including three major league sports teams). The price of homes, while rising, remains relatively affordable.

With these offerings, the roster of financial industries homing in on Charlotte is diverse; it includes fintech companies, financial service companies (wealth managers, banking and investment services), company headquarters, incubators, investors, venture capital and corporate finance firms, and energy firms. If the pandemic has a silver lining for Charlotte, it is that it has accelerated this trend. People have realized that not everyone needs to go into an office in a major metropolitan area. They are also less partial to living in very densely populated areas.

Charlotte scores well on both these counts: it is not as dense as Manhattan and it has much of the highly skilled talent necessary for an advanced financial company without having an absolute glut of such workers. The CRBA is keen to take advantage of this unique moment in the city’s history, and is working on incentivizing businesses to come, focusing especially on fintech and entrepreneurship.

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Charlotte’s reputation as the second-largest banking hub continuously fuels the growth of the professional services industry as the region’s economy diversifies further.

It’s been a busy year for accountants, a sector whose growth tends to reflect expansion in the economy at large. This, though, is a mirroring which goes both ways, and as businesses struggle, must accounting firms are there to help them survive. The pandemic, and its economic fallout, brought them plenty of business. A raft of new rules from the government, PPP loans, tax planning, tax credits, solidifying shaky business financials and navigating safety mandates were all among the help that Charlotte’s business community required of its accounting firms. On top of this, the accountants themselves had to transition their operations into pandemic mode, learning the ins-and-outs of the government’s new rules even as they moved to remote work. Some of the bigger firms, such as PricewaterhouseCoopers (PwC) stand out here.

Already invested heavily in a digital strategy prior to

PROFESSIONAL SERVICES OVERVIEW

the pandemic, they were able to nimbly make the transition, but not everyone is endowed with that kind of reserve.

Charlotte’s accounting sector is fairly diverse. Not only does it have the big, international players, there is also room, and enough small businesses, to provide fertile ground for the boutique firms. The three largest accounting firms with offices in Charlotte are, in order, Ernst & Young, Deloitte, and PwC; though, while EY has more professionals, PwC has the most CPAs of any firm in the city (393). Boutique firms, though perhaps without the resources that the giants have, can make up for size with customization of services and by being more adaptable to the needs of their clients. One CPA at the small firm Fisher, P.A. noted that, in addition to offering accounting services, tax compliance and business advising, clients can even outsource controller services or hire them to serve as chief financial officers.

In addition to the pandemic stimulus money, new rules were enacted to help people under lockdown, which had an effect on accounting. One of the most immediately relevant was the North Carolina Department of Revenue extending its filing deadline for North Carolina individual income, corporate income, and franchise taxes from its usual April 15 to July 15. There have also been similarly temporary rules put in for people seeking unemployment relief: for a year, starting in March 2020, people receiving benefits did not have to prove they were seeking work. This waiver expired in March 2021.

North Carolina has quietly emerged as a national leader in the field of financial advising. In Charlotte itself, SmartAsset has ranked financial advisers, ( )

Steve Meckler Charlotte Managing Partner – Shumaker Loop & Kendrick

We were fortunate to be well-prepared for remote working.

Our firm’s footprint includes offices in Charleston, Tampa and Sarasota so we have a contingency plan in place for hurricanes.

It put us in a good spot to undertake a seamless transition to continue working remotely. We sent equipment home with secretaries and staff while all attorneys have laptops they can take.

Our remote VPN capabilities are great, and we also use digital dictation equipment. The legal community overall has done well and we did not miss a beat.

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PROFESSIONAL SERVICES INTERVIEW

People decisions During the pandemic, companies focused on their talent rather than their budgets

Geoff Gray Executive Vice President, Southeast Region – Signature Consultants much booming this year, and tech-related roles were high in demand. We expect to see a bullish return to travel and tourism as we enter 2021.

What are some of the tech areas that were bolstered in 2020?

Cybersecurity demand has been off the charts. All the efforts and initiatives from our customers are on digital transformation and infrastructure. We do not see that demand slowing down. Our company has six business lines. One of our divisions, Signature Federal, holds clearance and does a tremendous amount of work in federal cybersecurity, and there is a lot happening in this space. Charlotte’s cost of living, the substantial numbers of employers that deploy new technology, the youth and the innovative climate are all factors that attract people to the region. Fintech has been huge in Charlotte, with the Lowe’s technology center in SouthEnd and Honeywell relocating its headquarters to the city. These and many other factors have made the city a very attractive location for tech professionals.

How would you evaluate 2020?

Signature is a national IT staffing company and the largest in Charlotte. In 2020, we came out of the gates very similar to 2019 but then the pandemic hit and for the third and fourth quarters we were forecasting a 30-40% drop in activity. To the benefit of our clients, companies made people decisions first and budgetary decisions second. In Q2, demand was down about 28% and in the third and fourth quarters, levels were down about 14% and 4%, respectively. For the year, we will be about 5% up in revenue. We work with all types of companies of all sizes and we have a split of about 43% technical placements and around 57% nontechnical.

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| Invest: Charlotte 2021 | PROFESSIONAL SERVICES

What are some of the other challenges created by the pandemic?

I think everyone is talking about onboarding and training of new hires in the virtual world. We hire a few hundred internal employees per year, and it is much more difficult to do it virtually. Still, we see companies figuring out how to make it work. Generally, it’s more difficult to build long-term relationships over Zoom.

In our business, because face-to-face relationships are essential, that has been a challenge. It’s tough for any business to navigate this situation. We’re waiting to see what our customers want to do, and also trying new tactics and learning along the way. At this point, we do not see any desire to return on a large-scale until the second half of 2021.

PROFESSIONAL SERVICES OVERVIEW

Tech-savvy talent has been a rising demand for businesses across different industries.

( ) and the Top 8 in the city are managing over $500 million each. The top, Carroll Financial Associates, Inc., manages nearly $3.5 billion; the next two on the list are Bragg Financial Advisors, Inc. and Colony Family Offices, LLC. Both manage about $1.7 billion.

The past year has been an eventful one, to say the least, and financial advisers, their keen eyes following the market, have been rewarded by paying close attention. Firms with a background in the medical sector were able to protect themselves against major losses when the bottom fell out. Since then, as the triumph of the vaccine has become the biggest success story of the year, the science sector is regarded by some wealth managers as having a resilience that will pay dividends moving forward. As a direct result of the COVID-19 pandemic, both housing and e-commerce are other areas expected to be reliable drivers of market growth in the near term.

Another trend in financial advising that is emerging out of Charlotte pertains to retirement planning.

The Retirement Clearinghouse is a company based here that has developed technology for retirement plan sponsors that allows employees to transfer their retirement savings without having to manually cash out of their account. This technology aims to benefit Black and Hispanic individuals since they

disproportionately cash out of their 401(k) accounts when they switch jobs, making it more difficult to accumulate savings for retirement. The company is growing and says that it will add 300 jobs to the Charlotte area in the next four years.

For the insurance industry, the landscape as a result of the pandemic has been altered in a number of ways.

Most immediately, there was the loss of employerbased health coverage for millions of people who became unemployed as a result of the pandemic.

People are hopeful that with the Biden administration backing the Affordable Care Act and federal stimulus money attending to the problem, the bleeding might be staid.

New trends in the insurance business itself can be seen as a direct result of the pandemic. After the SARS outbreak in 2003, many insurance companies began looking into the necessity of pandemic insurance. This trend has only accelerated, with one provider saying that pandemic insurance is fast becoming as prevalent as terrorism insurance became after 9/11. Another area affected over the course of the pandemic has been cyber insurance. As cybercriminals have become emboldened and opportunistic over 2020, more companies (65% of SMEs, according to one count) are spending more on cyber insurance. www.capitalanalyticsassociates.com

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Walter Fisher Office Managing Partner, Charlotte Troutman Pepper Hamilton Sanders LLP

How have client relationships been affected by the pandemic?

During this pandemic, the ways in which we build and maintain relationships have varied from client to client.

Some clients are very cautious about any in-person contact, but we also have others who are craving human interaction, seeking to meet in safe, socially-distanced environments. It’s been a matter of discerning in a diplomatic way what clients are interested in, and what they’re not interested in. However, I have used Zoom and other virtual meeting formats extensively during the pandemic, and most of the clients I work with have welcomed the use of such tools.

How difficult has it been to train young talent in a pandemic environment?

Nurturing, developing, and retaining talent is more challenging than finding and hiring talent, and that was true even before the pandemic. The pandemic has only introduced additional stress in this context. While talent recruitment always is hyper-competitive, the larger challenge is making sure the environment and training provided to young attorneys meet their requirements for professional growth and advancement to connect them to the firm and its future.

We are focused heavily on ongoing training for our attorneys and paralegals, and effective training has been more difficult in the remote environment. Historically, much of what our associates learn they pick up while physically in the room with more senior attorneys on a conference call or in a meeting. Being able to place a legal document in front of you and explain why you made the changes you made is important to the learning process for young lawyers. We’ve had to adapt in this area, and I believe we have done so successfully for the most part. We’ve conducted Zoom meetings with associates to plan for client calls or talk about documents they’ve drafted, and I believe the use of virtual meetings has been instrumental in keeping the dots connected and advancing the learning process.

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But there are also legal issues that arose for the industry pertaining to liability as a result of the pandemic. As businesses closed, they went to their insurers to stake their claims. But many insurers argue that the pandemic caused no physical damage, negating the obligation to pay out. The issue is in front of the courts in many states and the outcome could have far-reaching implications for the industry and their clients.

The three largest law firms in the region are Moore & Van Allen, McGuire Woods and Robinson Bradshaw Legal The legal industry, not unlike accounting, has been hit with a very busy year even as they’ve had to navigate their own evolution, from creating a safer office environment to establishing decentralized work-athome protocols. In many cases, the value of occupying significant amounts of office space has been called into question. Trial work stopped for three months at the height of the spring lockdown. Along with much of a lawyer’s work, the courts were able to resume as the profession figured out remote work. Still, there are aspects of the job that are disadvantaged by speaking into a camera. Trial lawyers will attempt to read the jury to better persuade them, and when taking a deposition, much can be discerned by the body language of the witness.

In these respects, lawyers are keen to return to the status quo. But in others, this is not the case. Trials are less expensive and time-consuming, particularly when it comes to calling third-party witnesses, if done over Zoom.

In general, the digital strategies of law firms have been forced into the future, and not only in the trial sense. Digital marketing has fast become the norm for firms that used to advertise their services in-person at events. Firms that had already adopted a cloud-

PROFESSIONAL SERVICES OVERVIEW

Perspectives: Outlook 2021 Clayton Curry Management Team – Offit Kurman We think that we’ve adapted and that there will be more opportunities because of that, providing new legal services to existing clients, finding new clients and generally growing our firm. With regard to new opportunities, now that we know how to work remotely, there are things that we can do with clients that maybe in the past we would have had to wait until a physical meeting occurred.

Nathan Hull President & Founding Partner – Hull & Chandler, P.A. A lot of my clients are concerned about taxes related to business transactions, such as capital gains. The reality is that it is probably not as big an issue as long as there is proper planning. Every time an administration changes, there are changes in the tax code and this is not always just confined to the rates. Until these things are determined, everyone’s a little on edge.

George Miller Partner – Dozier Miller Law Group The re-evaluation of office space after COVID will be a key factor for professional service firms post-recovery.

based model before the pandemic benefited by not having to overstrain themselves when the virus struck.

Generally speaking, the shift to remote work did not adversely affect the amount of attention law firms can pay to their clients. In certain respects, the pandemic has forever changed how firms conduct business, with many predicting that in-person closings for home purchases are a thing of the past. Also, law firms have had to be creative in how they recruit and train new attorneys.

On the whole, Charlotte’s law firms were busy over the course of 2020 and saw a growth commensurate with that state of affairs. Attracted by the city’s status as a commercial hub, not least, the fact that it is the second-largest U.S. banking center, the region has become a magnet for law firms. The three largest firms in the region are: Moore & Van Allen, with 310 attorneys; McGuireWoods, with 164; and Robinson Bradshaw, with 134.

While North Carolina is increasingly an attractive destination for outside talent, the pool locally is considerable too, and the top three law schools in the state — Duke, UNC Chapel Hill and Wake Forest — are renowned nationally. ( )

Our outlook is full-speed ahead growth. We’re excited for where the firm is and where we’re going. Like everybody out there, when 2020 began, we were concerned about the year and what was going to happen. We were thrilled we had no layoffs, cutbacks or salary reductions. We haven’t slowed down and had a good start to 2021.

Mark Riopel Co-Managing Partner – Hamilton Stephens Steele + Martin PLLC My outlook for the Charlotte region is quite bright.

Whatever happens with the economy nationally, we will be on the higher side. We’re a growing city, so that will help. I can’t look into a crystal ball but I know that things look good in the practice area that we’re in. We do a fair amount of construction and bankruptcy litigation.

Marty White Managing Partner – Johnston Allison & Hord We expect a big uptick in litigation once the courts are able to open consistently and get trials going. The unknown is when we can reliably expect to get back into the court. We anticipate that will take place in the latter half of 2021. The other big growth area we are looking at is bankruptcy because many sectors of the economy have been affected by the pandemic.

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®

oundtable:

Pandemic maneuvers Accounting firms found themselves in the thick of the pandemic as businesses scrambled to deal with a rapidly emerging and changing regulatory and stimulus landscape. Leaders discuss their areas of focus during this tumultuous time.

John Bly

Regional Managing Partner, South Atlantic Aprio LLP

What has been your focus during the pandemic?

In terms of clients and our external focus, we couldn’t stop the train after it went out, with PPP, tax law changes and April 15 to July 15 deadlines. All of that became a freight train as we tried to help clients make sure they managed to find funding through the PPP process, to figure out the new tax credits that were out there and also provide real advisory regarding what’s happening with the economy, with their businesses. We had to pick up the phone and have conversation after conversation on how to deal with human resources issues, and remote working.

How did deal activity evolve during the pandemic?

In Mid-March, we had a handful of clients and deals that were close to being done and I can remember having a conversation with someone on March 15, and they basically were putting deals to the side. There were enough changes in the stock market that people were starting to get nervous. Deals dried up completely until really about the Fourth of July, and then it seemed like things started to loosen up as people realized that this was going to be the reality for longer than they thought.

Where is the business of accounting headed?

I think we’ve been in an ongoing battle between compliance and advisory for the last handful of years.

Firms that haven’t been able to move into more advisoryoriented roles, providing more business and technology consulting and having less to do with tax code and compliance, could feel even more pain coming out of the pandemic.

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John Norman

Managing Partner GreerWalker LLP

How did you approach your work with clients in the new landscape that emerged in 2020?

We have a long-standing tradition of positioning ourselves as the most trusted business adviser in the market. The situation most of our clients were in allowed us to step up our game. Multiple conversations with our clients were deeply emotional and personal in finding a new pathway through this uncertainty made up of big unknowns. We helped them through critical economic and personal decisions about their business. Tough decisions had to be made. It went beyond tax, beyond accounting; it was about making business decisions that affected people’s lives.

How has demand for your service areas evolved?

One of our services relates to investment banking. What was very clear at the outset of the pandemic was that there was not going to be any investment banking going on starting March 16 and up until an unknown date in the future. We worked with our investment banking team and turned it into a PPP loan task force. Our investment banking side went down because it just went full stop.

Our due diligence practice slowed down a bit. Because of the CARES Act and so many things within it being related to tax, our tax advisory services grew.

What regulatory factors are your clients watching?

The No. 1 driver and No. 1 question from all our clients is what is going to happen to tax rates, and the potential for retroactivity. That is our top focus. We don’t have a crystal ball, but based on our long-standing experience, there is unlikely to be major tax legislation in 2021.

PROFESSIONAL SERVICES ROUNDTABLE

Dan Warren

Charlotte Market Leader Elliott Davis

Which among your service areas witnessed a demand surge?

We have a cybersecurity group that is in high demand.

We are fortunate we had them in place before all this started. It quickly became the hot topic as companies went remote. Another group that remained busy is our valuation team. They saw increased demand fueled by possible upcoming changes in lifetime gift and estate tax exemption amounts. A lot of people were in a rush before the end of the year in terms of gifting because of this.

That required valuations of their businesses so they could give as much as possible and we are still busy in this area.

We also dedicated a significant portion of our talent and resources toward assistance with PPP loans and other available stimulus credits to both clients and prospects.

They were able to capitalize on our use of data and AI to help them drive business decisions as well.

How do you see technology taking the accounting sector to the next level?

We’ve invested heavily in technology. We were already down the path we needed to be on. There’s so much more virtual work now, and we try to make it seamless for our clients. There is no going back, it will continue to grow.

You must use the right tools to adapt. Technology has definitely helped us do that. CPA and accounting services have historically been a relationship business. That is how we built our firm. The pandemic has made that a lot tougher, and it will be interesting to see how we transition to new lead generation and client retention practices moving forward. It also generated significant expense savings as most internal travel is off the table for now.

Jeffrey Wilkinson

Office Managing Partner Assurance Services BDO – Charlotte

How did 2020 evolve for BDO? When the pandemic started in mid-March 2020, we were going through the busiest time of the year for our group. In October, our office was reopened at a reduced capacity. It has proven challenging from the standpoint of managing, promoting and developing our people.

Staying connected with them was critical. We found that we have people who thrive in a work from home setting while others found it hard due to the lack of human interaction. Our client base is quite diverse. Some have reopened and others performed better than initially anticipated in a remote setting so they’re looking to make that more permanent. There are also those that were deemed essential and are doing well because of that.

How are you advising companies on the employee benefits side of the business?

We have seen several elements put in place for our clients.

Early on, the focus was on the cash conservation side, boiling down to either reducing bonus pools, temporary pay reductions or halting 401K matches, to name a few.

As businesses gradually opened back up, there was some movement at the executive level among high-level finance executives. But for the most part, people are staying where they are at, while companies are looking to ensure talent retention. Meaningful programs revolve more around work-life balance. As people have delved into the working from home experience and companies are witnessing their efficiency either maintained or raised, companies are also intent on providing the required technology to their employees to ensure optimal working conditions across all levels. www.capitalanalyticsassociates.com

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PROFESSIONAL SERVICES INTERVIEW

Rewarding year Despite the challenges of 2020, McGuireWoods didn’t miss a beat

John McDonald Managing Partner, Charlotte – McGuireWoods help all of our employees better understand the racial inequities in our local community and what we can all do to make things better.

What were the highlights, milestones or takeaways in 2020?

Looking back, 2020 was probably the most challenging and the most rewarding year in my 29 years of practicing law. For me, the biggest takeaway from 2020, was just how well we weathered the COVID storm. I was so pleased at the way our lawyers and staff in Charlotte, and around the firm, stepped up to meet the challenge. We took care of our clients’ needs and made sure to take care of each other. The following are just a few of the accomplishments that I am so proud of: our firm was recognized by Bank of America for our promotion of diversity and inclusion; 140 attorneys in our Charlotte office provided over 6,700 hours of pro bono legal services to the less fortunate in our community; and we started a number of initiatives to 60

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What were some of the factors that drove your business during the COVID pandemic?

We did have a very good year. I think that our ability to step up and meet our clients’ needs without missing a beat is what led to our success. To help our clients deal with a wide range of legal issues created by the COVID-19 pandemic, we set up a COVID-19 Response Team made up of lawyers from all of our practice groups and industry teams. We monitored federal and state legislation, regulations and executive orders to make sure our clients always had the most up to date information so they could make the most informed calls. Our COVID-19 Response Team met weekly to discuss COVID-related issues. I think that is what allowed us to have a phenomenal year. We became one of the firms nationally that was seen as a leader in identifying legal issues, whether it was the PPP process, the CARES Act, the Families First Coronavirus Response Act, or the changes and regulatory schemes that came about because of COVID. What are the firm’s goals for 2021?

We are very optimistic that we’re going to have a great 2021. I believe we have positioned ourselves well with new attorneys joining the firm and in the Charlotte office. Our growth is strategic and always driven by the needs of our clients. The areas of most interest in the Charlotte office are banking and financial service, healthcare, technology, debt finance, corporate, regulatory, employment and employee benefits. We see great opportunity to help our clients plan for and take advantage as the post-COVID recovery kicks in.

PROFESSIONAL SERVICES OVERVIEW

The encompassing scope of the professional services sector will be key in the market’s recovery process.

( ) Keeping all these lawyers busy is a raft of coronavirus-related issues and litigation. Indeed, these are expected to keep the sector engaged for years to come. Lawyers have been able to offer advice on how companies can most safely return to the office as well as how the possibility of layoffs might be dealt with.

Drinking establishment owners have been suing the state, demanding that their bar be allowed to reopen, and a millionaire even sued a shipbuilding company for having to delay the delivery of his $10 million yacht on account of the virus.

Private equity For private equity, Charlotte holds the title for having the highest number of firms in the state. They are drawn here for the same reasons that draw the other professional services: the vibrancy of the economy, buoyed by a huge banking sector, skilled labor and a desirable quality of life. As companies want to establish a presence in Charlotte, so too will private equity firms be here to support them, helping to create a symbiotic ecosystem that bodes well for the local economy.

New Republic Partners, a relatively new arrival to the Charlotte Private Equity scene, holds that the pandemic has only accelerated the massive movement of wealth to the Southeast. Charlotte, it says, is in

a good central position for exploiting this trend, which is only aided by the availability of top talent.

According to Crunchbase, the top three firms in the city are Advent International, Echo Health Ventures, and Temasek Holdings.

Looking ahead With the economy settling down and poised for growth as the year wears on, the professional services stand to benefit from continued growth in Charlotte.

The city was in a strong place before the pandemic and continues to look strong coming out of it. Granted, the city, region and country are not yet in the clear, and there is still further to go as the vaccine is distributed and life opens up properly.

The world of professional services is altered. Ten years of digital transformation was packed into six months, and it is sectors such as these — office-bound cogs of the economy at large — which will surely be transformed by a revolutionary time.

Charlotte, though, remains strong. The greatest fears of spring 2020 have not come to pass. The region continues to attract the interest of business and individuals.

One could even go so far as to say that Charlotte benefited from the pandemic, as many are now looking for a less dense but still vibrant locale to conduct their business. www.capitalanalyticsassociates.com

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Gaston County: Firmly on the radar of domestic and international businesses, Gaston County has a reputation as a friendly place to do business. But it takes more than a good attitude to attract employers and new residents. A solid education system and the necessary outlets to provide a worklife balance are also key components to the county’s success.

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Strong position: Gaston County is emerging from the pandemic with growth in mind Despite living through a pandemic year, Gaston County has emerged remarkably well positioned, which is partly related to the strength of its main industries, among them smart manufacturing and healthcare. A burgeoning arts and culture scene, in particular with the new FUSE District, and a highly ranked education system are among the county’s strengths.

Sitting right in the heart of the Carolinas, directly to the west of Charlotte, Gaston County has 15 incorporated towns, including Belmont, Bessemer City, Cherryville, Gastonia, Kings Mountain, Lowell and Mount Holly.

It is the fourth-largest county in the metropolitan area, behind Mecklenburg County, York County and Union County, with an estimated 2019 population of 224,529, according to the U.S. Census Bureau, that has demonstrated steady growth and is expected to climb 3.4% by 2025.

Development is transforming the county, which once relied on the textile industry, creating a dynamic environment for international companies looking for a new base of operations or new residents looking for a high quality of life.

Economy According to ratings agency Moody’s, Gaston County 64

| Invest: Charlotte 2021 | GASTON COUNTY

has a sound financial position and manageable longterm liabilities, key factors for its positive growth going forward. The county’s most recent 2000 bond series raising $50 million last September earned an Aa2 rating from the agency, which also cited Gaston County’s large tax base.

The county’s median age is 40.1 and it has a median household income of $46,626, according to the Gaston County Economic Development Commission (EDC).

Income equality in the county is on par with the national average, with the Gini index coming out at 0.463, and almost one in five residents has some college education. The highest paying jobs in the county are in utilities, with a median salary of $69,688, finance and insurance, which pays $56,871 and real estate with a median salary of $53,078.

Pre-COVID, the largest employer by sector was manufacturing, which provided jobs to over 17,000 people, followed by healthcare and social assistance at 12,795 and retail at just over 12,000.

Behind Gaston County Schools, which employs 3,900 people, the county’s biggest employers are CaroMont Health Corporation and Freightliner Corporation, which employ 3,800 and 1,800, respectively. The unemployment rate across the ( )

GASTON COUNTY INTERVIEW

Outside the box Innovative thinking helps serve residents, preserve economic growth

Kim Eagle County Manager – Gaston County What were your major takeaways from 2020 for Gaston County?

Looking back over the past year, we were quite fortunate in Gaston County that we were in a solid position to respond to the pandemic. Operational continuity was front of mind. We wanted to do everything in our power to respond to the public health crisis while also being responsible, to the extent possible, about avoiding service interruptions to county citizens. We quickly realized we needed to think outside the box to be able to do that.

With facilities closed to the public, we created new, innovative ways to serve them. We did not stop working with the development community in terms of building permits or plan reviews. Not only did the economy avoid slowing down in those areas, we were also able to protect our constituents’ public health while being responsive to our citizens and the business community.

How did the county adapt its development strategy in the midst of the pandemic?

When the pandemic first started, we spent a great deal of time helping our existing industries with questions around ensuring employee safety and essential activity classification. We’ve been working hard for a long time to create assets that attract investment in today’s market. Good product is a must, as well as building and site availability. We are halfway through creating and developing Apple Creek Corporate Center. We know we’re building the right product for the region.

Companies looking to locate in Charlotte want to build their own free-standing buildings. They want their own identity. We’re also taking a closer look at the sector that has been growing prodigiously — the industrial warehouse market — fueled by logistics, e-commerce, fulfilment centers and massive amounts of capital flows. The anticipated growth is strong. In contrast, capital markets show significant uncertainty around

office real estate and multifamily. Institutional capital providers are on the lookout for safe harbors and the industrial market is exactly that.

What are the county’s near-term goals?

We’re going to finish our Apple Creek Corporate Center and move forward with the rest of our pipeline. For 2021, our goal is to keep pushing on additional product availability. It is a precursor to success. We’re also working on a community vision. This is something that is much broader than the county. It came out of some deliberate economic development discussions in 2020. We’re at the table as a convener and a facilitator to develop a community vision because so many people across Gaston truly want something that we can all rally around. www.capitalanalyticsassociates.com

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Walker Reid Mayor City of Gastonia

How important is the new ballpark to Gastonia and the surrounding areas?

The FUSE ballpark is a multipurpose facility that will host our new baseball team and a variety of other sports events and concerts. It has the potential to be the jewel of our city because, as the name implies, it will “fuse” our Downtown with the area around the ballpark to create further economic development opportunities and revitalization. We believe other regions surrounding us will also experience growth.

We’re not trying to compete with surrounding regions but rather to synergize with them. We are trying to introduce opportunities they don’t offer, while they provide our residents with things we don’t yet provide.

We’re actively looking to host events to boost traffic and the spirits of our residents while following COVID precautions as we work through the pandemic.

What is the state of Gastonia’s economy?

Obviously, the pandemic has affected our city, just as it has all cities, but we remain optimistic despite the challenges the pandemic has presented. We are actively searching for and incentivizing businesses to come to Gastonia. We’ve invested heavily in utilities and projects such as the FUSE ballpark and the I-85/U.S. 321 interchange. I’m glad to see the growth we’ve achieved and we’re expecting much more. Our Downtown is prospering, and I believe it will continue to grow as we continue to attract the attention of investors and businesses. It’s all very exciting.

Many businesses have been interested in moving to Gastonia for a variety of reasons. Businesses and investors are very excited about the influx of new residents, as well as our ideal location. Within Downtown itself, new restaurants and breweries are attracted to our growing urban population and new attractions such as the FUSE ballpark. As well, we are located close to Charlotte and the Charlotte Douglas International Airport, and we have the I-85/U.S. 321 project that will prove to be a huge relief to our heaviest-traffic areas.

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Gaston County is home to many vibrant and diverse cities and towns.

( ) county stood at 6.4% as of January 2021. Although this is up on the 3.8% unemployment rate in February 2020 pre-COVID, the county has remained resilient throughout the crisis.

Due to the COVID pandemic, Gaston County lost an estimated $10 million in revenue, but it was still able to adopt a $222 million total general fund budget for 2021. Although this represents a $6.4 million year-onyear decrease, the county used less of its own savings and even brought down the tax rate. According to the budget breakdown, 13% of the budget comes from sales and other tax, 7% from fees, licenses and permits and 6% from other sources. The bulk – around 74% – is projected to come from property taxes at $0.83 per $100 of value. Despite the COVID challenges, the county was still able to drop the tax rate for 2021 by 1 cent to the lowest rate since 2001. The majority of the

GASTON COUNTY OVERVIEW

budget – 33% or $73.2 million – will be allocated to education, with $65.9 million for public safety, $36.8 million for general government, $30.7 million for human services and the remainder will be spent on other areas.

Business development With an enviable location, sitting in close proximity to Charlotte Douglas International Airport and I-85, and a skilled workforce, the county has developed a reputation as a friendly place for companies to do business. A number of organizations work to bolster that reputation. Key among those is the EDC, which is dedicated to attracting and retaining business and increasing the prevalence of high-paying jobs. The EDC promotes the county and provides custom client solutions to businesses willing to expand or create new facilities in the county. It also provides several programs to companies seeking to expand or establish operations in Gaston County, including fast-track permitting, market research assistance, employment and workforce recruitment assistance, business-tobusiness introductions and incentive programs.

The EDC also provides support to existing industries through its Business Retention and Expansion Program (BRE). This is a critical component of support for the county’s local businesses. Through the EDC many local partners coordinate to produce events such as Career Signing Day in the spring, Manufacturing Week in the fall and monthly Gaston County Association of Manufacturers’ meetings and career fairs.

The Gaston County Association of Manufacturers (GCAM) is an association that meets to discuss

GASTON COUNTY OVERVIEW

strategies and best practices within the industry, which is an integral function of the EDC’s BRE program. The meeting brings together representatives from across the board, from engineers to managers to increase collaboration and encourage links with academia and government. Gaston College and Gaston County Schools are both partners in this ongoing initiative.

Since 2012, the Gaston County Board of Commissioners has annually reauthorized the Small Business Investment Grant to help small businesses expand or establish in the county. Any new or existing business can qualify for the grant if they have made an investment in property that increases the business’ net taxable value between $10,000 and $1 million. The Standard Investment Grant program has supported existing and new industries, with an investment of more than $1 million since 1999. The EDC, working with the participating municipalities, administers these performance-based local grants which are equally applicable to new and existing businesses.

Southern Business and Development named Gaston County “a location of choice” for Foreign Direct Investment (FDI) associated with advanced manufacturing facilities. In the last 25 years, over $400 million has been invested, creating around 1,000 jobs. As of 2019, FDI had accounted for 20 of the 41 most recent economic development projects in the county EDC, according to Southern Business Review.

Gaston County business parks.

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German precision tooling company Aichele arrived in 2015 with a $2 million investment and fellow-German chemical company Lanxess was welcomed in 2011 with a $15 million investment. Other countries represented in Gaston County include Israel with Tosaf USA, Switzerland with Clariant Corporation, Belgium with Colortex, Indonesia with Conitex Sonoco, Spain with CTL Packaging and Australia with ERA Polymers.

Also in the county’s corporate community are Japan’s Firestone Fibers & Textiles and K Line America, and Switzerland’s Clariant Corporation.

Key sectors Manufacturing Once a textile manufacturing region, Gaston County continues to transform itself, repurposing its former industrial spaces into an attractive location for advanced manufacturers, research facilities and North American headquarters. Fifty percent of all international companies in the Greater Charlotte region work in manufacturing, according to a study by the Charlotte Regional Business Alliance. As a result of the support provided by the Gaston County Board of Commissioners, the EDC has developed or supported over 2.69 million square feet of industrial space in the Gastonia Technology Park, Southridge Business Park, the Oaks Commerce Center and the Delta Business Park. Over 2,200 jobs have been created and over $412.7 million of capital has been invested in these ( )

GASTON COUNTY INTERVIEW

Online success Pass rates above 90% on state and national licensure exams validate online program

John Hauser President – Gaston College What were some key takeaways for Gaston College over the past year?

We were able to implement a wide-ranging business continuity plan. We were able to have students on campus, though at a reduced number, and we delivered about 75% of our classes online. What’s phenomenal is how our faculty and students performed. Health science and basic law enforcement graduates validated our online success by achieving 92% pass rates and higher on state and national licensure exams. Through all of the adversity, they were still able to come through with pass rates that exceeded state averages. EMS and other program graduates enjoyed 100% pass rates. Even during the pandemic, our faculty and students went above and beyond. To aid in this success, we were able to provide laptops and wireless connections where they were needed. I’m extremely proud of how our institution performed during COVID. How important is collaboration with other schools?

Among my first orders of business after arriving here last year was to meet with the heads of other local institutions, such as Belmont Abbey College and Gaston County Schools, the private schools throughout Gaston and Lincoln counties. We’ve signed a joint memorandum of understanding with Belmont Abbey to implement a direct entry pathway for our students to Belmont Abbey to pursue a bachelor’s degree while remaining in Gaston County. The goal is to see how many graduates we can keep in Gaston County.

The way to do that is to make it a seamless pathway from K through 16 and beyond. Our collaborative agreements with Gaston County Schools and Belmont Abbey enable us to attract, retain and develop a skilled workforce to meet the needs of our business and industry in Gaston County. We’ve also entered into agreements with CaroMont Health on the healthcare

side with the goal of ensuring that any student in this field can secure a job with CaroMont upon completion of a health science degree that also includes a direct entry transfer to Belmont Abbey for a bachelor’s in nursing. We’re working on those types of things to both attract people to the county and retain them.

What is your near-term outlook for the college?

Our main priority is to keep our students, faculty, staff and community healthy. We’ll continue our protocols of checking temperatures and cleaning to ensure that people stay safe. Second, we want to ensure that our students can transition to the virtual. We’ve now organized the college knowing that people would not want to be attending face to face. We want to make sure these efforts continue. www.capitalanalyticsassociates.com

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GASTON COUNTY OVERVIEW

The EDC has developed or supported over 2.69 million sq ft of industrial space in Gaston County’s business parks ( ) employment centers. Since 2017, Owens Corning, Lanxess and Dixon Quick Coupling have expanded their advanced manufacturing facilities in Gaston County’s Gastonia Technology Park (GTP). In April 2020, Dymax Corporation announced it would build an advanced manufacturing facility in the Gastonia Technology Park. This $21.5 million investment will create 59 jobs with an average annual wage of $59,814.

To capitalize on its manufacturing momentum, in June 2020, Gaston County began development of the Apple Creek Corporate Park, for which the county began acquiring land in 2018. The county acquired about 330 acres of a former golf course and other parcels to set up the industrial park to neighbor the existing 350-acre Gastonia Technology Park, which is close to being fully occupied. November 2020 saw GNT USA, the U.S. arm of a Netherlands-based food coloring manufacturer, begin construction of its North American headquarters, R&D and production operations in the Apple Creek Corporate Center.

GNT plans to invest $30 million on the 49.2-acre site and create 40 new jobs. This business park has been submitted to a large number of advanced manufacturing projects interested in locating on fully prepared sites.

Healthcare Despite the challenges brought about by the COVID-19 pandemic, Gaston County continued to grow and invest in its key sectors. In October, CaroMont Health broke ground on its $90 million critical care tower in Gastonia. The 146,000-square-foot facility has four floors, 26 private intensive care rooms, nursing stations and administrative space and is set to open in 2023. The health system is also investing in a $122 million expansion of the Gastonia campus, as well as constructing a new hospital next to Belmont Abbey 70

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College. In September, the lease was signed for the new hospital, which will be a 66-bed unit with 54 acute care beds and 12 observation beds. The site will also provide an emergency department, operating rooms, a labor unit and outpatient services.

The county is not only progressing with its health infrastructure but also with its battle against COVID-19. Within eight weeks of receiving vaccines, more than 14,000 people in the county were vaccinated. In addition to CaroMont, Walgreens and CVS stores have been administering the vaccine and at a recent Atrium Health vaccination drive at Bank of America Stadium, residents from 70 North Carolina counties were in attendance. So far, the county has been vaccinating at a rate around 1,200 per week.

Real estate One of the most dynamic segments in the last year for Gaston County has been industrial real estate, given the region’s proximity to the Charlotte metro area and the

Gaston County has the development capacity to support diverse business operations.

GASTON COUNTY OVERVIEW

Becky Steelman Smith Mayor – City of Bessemer City

We’re always going to strive to do bigger and better. The pandemic has not inhibited us. We’re maybe a bit slower as a result of CDC guidelines but we’re excited for when restaurants, schools and venues are back at 100%. We’ve made it as enjoyable as possible for our citizens but you can only do so much. We opened our Allan Farris Community Center as a county testing site and about three weeks ago we administered over 600 vaccinations with the partnership of Kintegra Health and Livent. Considering our size and other sites in the county, that was great. In May, we’ll open our city hall council meeting to the public for the first time since the pandemic hit. It will only be 50 people but things are getting back to normal and we have a lot to look forward to.

pandemic-induced boom in e-commerce. In 2020, and through the first quarter of 2021, over 5 million square feet of speculative industrial was announced for Gaston County. The EDC worked with the various developers to assist in bringing these projects to fruition.

According to an Avison Young report on the Charlotte industrial market in 2Q20, Gaston County had an industrial vacancy rate of 1.5%. The report cited increasing investor demand in light of structural changes to the economy and the potential benefits to North Carolina from reshoring activity in the wake of the COVID-19 pandemic. Given its broadening industrial infrastructure, Gaston stands to benefit.

Among the high-profile projects underway is Gateway85, developed by NorthPoint of Missouri in the area between Gastonia and Lowell. The plan is to develop a nine-building complex totaling 3.5 million square feet for warehouse use that is expected to produce thousands of jobs.

Other projects include Equus Capital partners’ development of a 300,240-square-foot industrial building in Kings Mountain. The Kings Mountain Corporate Center is working with the Keith Corporation to develop their property in Kings Mountain into a speculative single-tenant facility.

Also, the Summit at Court Drive Office Park utilized the surplus county-owned land to create a class-A office environment for several local developers.

Over $40.7 million in capital investment and 254,588 square feet of office space has been developed. In August, the land for the RiverWest Business Park, a www.capitalanalyticsassociates.com

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Caleb Moore Project Manager NorthPoint Development

What is the role of the Charlotte market in NorthPoint’s overall strategy?

NorthPoint tries to identify markets where we can add value, looking for land sites where some sweat equity will pay dividends. We try to avoid saturated markets where buildings are flipped for a lower spread but ultimately want to follow the movement of consumers, who are becoming accustomed to one-day delivery.

Charlotte fits all these categories with a dramatic growth in population coupled with available land and a low-cost basis.

What significant acceleration or disruption of market trends characterizes the last 12 months?

The last 12 months have accelerated e-commerce demands to an unprecedented level and as such, companies are having to adapt their model to bring products closer to their end users. What used to take four to five days to ship now is expected to arrive within a day, and corporations are having to expand their logistics footprint to meet those needs. The industrial sector has been the primary benefactor of this change which is driving the need for speculative industrial space like we are constructing at Gateway85.

What is your outlook for Gateway85 and Gaston County in the short and long term?

In the short term, we are excited to be under construction for 900,000 squre feet of speculative warehouse space as part of our first phase, which includes two buildings and infrastructure improvements. Our future plans include another 2,500,000 square feet of class-A industrial space with additional infrastructure to help promote site accessibility.

In a broader sense, our outlook is extremely optimistic, bringing some high-quality tenants to these buildings, driving job growth in Gaston County, the city of Gastonia and the city of Lowell, and being exceptional partners to the community as a whole.

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Key infrastructure improvements and the proximity to Charlotte are major draws for businesses eyeing an expansion into Gaston County.

two-building site containing 580,000 feet of office and industrial space, sold for $3.3 million to affiliates of Tribek Properties. RiverWest will have $29 million invested in two buildings in Belmont. And Trinity Partners is working with Jenkins Grading to construct a 600,000-square-foot building expandable to 1 million square feet in total.

And it is not just the commercial segment that is going from strength to strength. Residential development has included the construction of roughly 1,600 new single-family dwellings and 1,500 new apartments in the last two years in the county.

There are ongoing plans for a 90-unit apartment complex on Main Avenue, which will be called Center City Crossings and will be valued at $20 million.

According to Zillow, Charlotte is seeing staggering demand for property, with entry-level homes going under contract in just four days.

Infrastructure & transportation Gaston County’s growth is partly attributable to its proximity to Charlotte but capitalizing on the metro area would not be possible without solid transport links. Gaston County has extensive transportation infrastructure across highways, rail, airports and an intermodal facility. The Piedmont & Northern

GASTON CONSTRUCTION COUNTY OVERVIEW

Tim Holiday Director of Development NorthPoint Development

NorthPoint Development’s land acquisition for the Gateway85 industrial park was a major win despite a challenging year. What made it possible for the project to materialize?

The Charlotte market had strong supply/demand data before the pandemic. The resolve in our data-based approach made it possible not only to move forward with the deal, but also put us in a great position to meet the accelerated demands of e-commerce and other warehouse space users.

Railway operates over 13 miles of track, running from Gastonia to Mount Holly, with a spur line toward Belmont.

Gaston County also is located a stone’s throw from Charlotte Douglas International Airport, which serves commercial, cargo, corporate, private, military and trucking functions. It is a major U.S. hub and international gateway, with nonstop service to 175 cities. Connecting the airport to the region is the 200acre intermodal facility at the airport that opened in 2012. The facility is managed by Norfolk Southern, is capable of 200,000 lifts per year and transfers containers to the Port of Charleston.

Plans are also moving ahead to construct a 26-mile light rail that would connect Gaston County with Uptown Charlotte, Charlotte Douglas International and beyond. Although segments of the Silver Line project won’t be active until the 2030s, the project offers an ambitious route through the heart of Charlotte out to Belmont. In the meantime, the county is looking to improve its existing highway infrastructure, including enhancing the connection of Gastonia and the city of Lowell with the Lineberger Connector project. The almost $30 million needed to complete the Opportunity Zone project would be contributed by the city of Gastonia (40%) and

Warehouse, distribution and office facilities are the key components of Gateway85. What is the overall vision for a project of this size in Gaston County and what types of tenants would Gateway85 best cater to?

Gateway85 is strategically located to serve tenants whether their logistics needs are local, regional, or national. This, along with a diverse park plan with options for single-load smaller warehouses to large cross-dock configurations, allows us to meet multiple market-demand factors.

The health crisis bolstered the demand for logistics, distribution and e-commerce. What is your view of the acceleration or disruption of market trends in the past year?

The rise in e-commerce has not only changed the volume in goods shipped directly to consumers, but it has also changed how those goods are warehoused.

Traditional warehouse to store shipments are large, palletized items. With direct-to-consumer shipments, we are looking at more single items that takes up more storage space, thus increasing demand even more.

Considering the county’s location in the I-85 corridor, what overall factors make Gaston County a hotspot for industrial projects?

Gateway85 is strategically located to meet logistical needs whether they be local, regional, or national. www.capitalanalyticsassociates.com

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GASTON COUNTY OVERVIEW

complemented with BUILD Discretionary Grants (60%). The Connector project is expected to stimulate about $322.5 million in project value, according to the city of Gastonia. It is forecast to create over 10,000 permanent jobs.

There are also plans to widen I-85 through the length of Gaston County and North Carolina DOT plans to replace and widen the US-74 Catawba River and South Fork River bridges, which will include pedestrian and bicycle lanes.

Additionally, Gastonia Airport is carrying out ongoing improvements amounting to almost $1.7 million. In addition, a runway expansion to allow it to accommodate corporate jets is in the works with a price tag of $50 million.

Education The quality of education is among the leading factors in attracting new residents to any region and Gaston County has two major educational institutions: Belmont Abbey College and Gaston College, both of which offer a variety of programs and certifications.

In a 2018 ranking, Gaston County schools grabbed the two top spots in a North Carolina ranking of public schools in the Charlotte area. The Highland School of Technology was given a career/college readiness score of 95, while the Gaston Early College High School was awarded a 93.8. The county has one of the top-performing Career and Technical Education (CTE) programs in the state.

Belmont Abbey College was named one of 2020’s Best Southeastern Colleges by the Princeton Review.

Hendrik Hoeck Chief Executive Officer – GNT Group B.V.

The Gaston County area provides diversity in many ways.

It has the appeal of the urban Charlotte area, family-friendly suburban areas, or more rural options. We found this area to be up and coming with good business growth and diversity offerings that would appeal to all employees. Additionally, Gaston County Community College was extremely attractive for training and on-boarding new team members. We remain bullish on the future and are excited about contributing to the Gaston County economy, including providing new jobs in the area and relocating employees. One reason we chose the Apple Creek Corporate Center is because the land and infrastructure can service our expansion plans and accommodate our continued growth plans for the next 30 years.

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GASTON COUNTY OVERVIEW

attractions like Crowders Mountain, the Catawba River and Lake Wylie. Belmont was recently voted “North Carolina’s coolest suburb.” But without doubt the arts and culture scene has been dominated for the last few years by the Franklin Urban Sports and Entertainment (FUSE) District development in Gastonia, a project that is expected to cost $21.5 million. The project is intended to anchor the redevelopment of Downtown Gastonia, improving quality of life and feeding the tourism sector.

The FUSE District was announced in 2019 and includes a multi-use sports and entertainment complex that will host baseball games, festivals, conventions and more. The 5,000 seat dual-purpose ballpark is set to open to the public later this year and will be home to the Gastonia Honey Hunters. Private developers are getting in on the action with Lenox Development Group redeveloping the largest portion of the 90,000-square-foot, historic former Coca-Cola bottling plant. In October, the groundbreaking ceremony was held for Lansing Melbourne Group’s redevelopment of the Trenton Mill, a project that will include the development of 89 loft apartments. A groundbreaking also took place for Durham-based Durty Bull Brewing Co.’s redevelopment of a 5,000-square-foot space to install a brewery and restaurant.

Gaston County also has 12 natural heritage sites listed as being of state or regional significance and the county operates 19 parks.

Gaston also recently passed a $250 million school bond referendum and a $0.25 sales tax to finance construction of three new schools, as well as repairs and renovations to existing schools. New School Choice programs for Gaston County school students began in the fall of 2019, and offer specialized education track options for students from as early as elementary school. Several additional new school openings have been announced, and groundbreaking ceremonies and construction have begun on these new facilities.

The Gaston County Schools system is among the 10 largest K-12 school districts in North Carolina and the county’s second-largest employer.

Arts & culture In addition to a robust education and employment offering, Gaston County rounds out it live and work options with a highly attractive “play” environment, punctuated by authentic hometowns and cities with walkable downtowns and a variety of natural

Looking ahead Despite the challenges of COVID, the future looks bright for Gaston County. A strong pipeline of infrastructure projects remains, over 2.5 million square feet of industrial space is being developed, the residential and commercial real estate sector continues to rise and the county’s investments in manufacturing are standing it in good stead. These factors are underpinned by a business-friendly administration that welcomes and supports private investment. Combined with its quality of life, rich heritage and culture and walkable Downtowns, Gaston is positioning itself well for further expansion.

Capital Analytics would like to thank Gaston County for its contributions in compiling this chapter.

To learn more, visit their website at: www.gastongov.com

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Real Estate: Charlotte’s real estate market remains as dynamic as it did prior to March 2020. A booming housing market, solid corporate expansions and relocations, piping hot industrial demand and solid suburban segments are among the bright spots for the sector.

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Getting hotter: Despite challenges, Queen City real estate proved resilient in the face of the health crisis The COVID-19 pandemic undoubtedly rearranged the socioeconomic landscape of the nation, and world, accelerating underlying real estate trends and disrupting the notions of dwellings and commercial spaces in the process. In Charlotte, the intersection of Trade and Tryon, arguably the heart of the Queen City’s central business district, likely has never seen such a debilitating suspension of overall activity prior to the onset of the coronavirus. Mandated shelter-inplace measures quickly ceased activity in the region’s sprawling Uptown, Southend and Central City areas.

Parts of Charlotte, marked by beautiful trophy buildings and idyllic live-work-play environments, sat eerily empty for most of 2020 as corporations, businesses and individuals faced life in the “new normal.”

The initial shock of the health crisis dampened a strong start to the first quarter in terms of sales and deals for both the residential and commercial real estate sectors. The weeks following March 2020 were ripe with uncertainty as individuals and government, health and business leaders grappled with an unprecedented pandemic. Yet, Charlotte’s decadelong period of growth in terms of development and 78

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in-migration, headquarter relocation culture, and economic diversification anchored by its strong banking and finance sector proved undeterred in the face of this black swan event.

As such, the Queen City’s real estate sector saw significant milestones in a year marred by the ongoing health crisis. Significant new projects broke ground, accounting for hundreds of millions in investment dollars. The city’s corporate relocation/ expansion culture pulled in its fair share of corporate heavyweights over the last year, with Centene and Robinhood among those planting their flag in the Queen City in the midst of the pandemic. Changing consumer buying patterns are steering the growth and demand in the industrial real estate sector, which land availability and a robust infrastructure system in Charlotte and surrounding counties can readily accommodate. Additionally, the ability to work from home mixed with ultra-low interest rates bolstered an already dynamic residential housing market and is slated to support growth in family-friendly, suburban markets outside of Charlotte proper, such as Union, Gaston and Lancaster counties.

Across asset classes, the pandemic has both ( )

REAL ESTATE INTERVIEW

Bullish Flexible opportunities will emerge in the office segment but talk of the sector’s demise is premature

Clay Grubb CEO – Grubb Properties

In what ways has the pandemic altered the officespace environment?

Anybody who thinks that the fundamental use of office space has dramatically changed is kidding themselves.

At the end of the day, most folks are anxious to get back and see their colleagues and experience the watercooler conversations that you can’t get when you’re at home alone. I do think there’ll be more flexible opportunities available but we’re quite bullish on the future of office spaces. We’re actually setting ourselves up to develop the most office that we’ve developed in probably 20 years. At the end of this past year, we signed the second-largest lease in our history: a 200,000-plus-square-foot, 15-year lease with a Fortune 2000 company, and they’re expanding. Great companies are going to have great office space. The mom-and-pops that have four or five employees and 1,500 square feet might not need office space. A lot of these smaller tenants have gone away and they might not come back. But larger corporations, anybody who relies on teams, are going to need space.

How does the 2021 Grubb Qualified Opportunity Fund enable opportunities across the country?

At the end of the day, the Opportunity Zone program was created to spur activity in low-income Census tracts. In urban markets, I think it’s been successful.

You’ve seen a fair amount of housing development shift toward these neighborhoods. That’s forcing people to build a more value-based product. The reality is, there’s a huge shortage of housing, especially valuebased, in America. Forty percent of Americans can’t afford the average price of a new apartment in this country. Our focus on essential housing is intended to address that.

What is your near-term outlook for real estate?

Residential is going to be really strong. The demand is huge. Charlotte had close to 100 people a day moving here pre-COVID. I think there will be even more in the future. I do think 2021 is going to be a very challenging year for office. You have a major company here in Charlotte where the CEO sent out a memorandum saying that the company wants to reduce office space by 25% because of remote working. They’re going to implement that program, probably to the detriment of morale and a lot of other things, and 18 months from now, they’re going to wake up and say, wow, that was a really bad idea. I think companies that are thinking in a contrarian way are locking down great long-term deals on office space, and they’re going to need it. A year and a half from now, it’s going to be in high demand. www.capitalanalyticsassociates.com

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Johno Harris President Lincoln Harris

What have been your primary takeaways from the shift to remote working?

We went remote in mid-March 2020, and we’ve watched closely as our productivity has remained high. All of the companies and clients we deal with will go through a similar evaluation as the pandemic subsides to determine whether some part of their business can continue working from home. Maybe not because they are trying to save costs, but rather as an insurance policy relative to the disruption of their business. In our case, we had our whole accounting team working from home within a week. It still works fairly well. There will be different avenues of business that may continue to work from home, but if you look at businesses that rely on collaboration and people being around each other, you can’t replicate that on a Zoom call. In some form or fashion office space needs will change, but we believe the continued demand will be there as we come out of the pandemic.

In what ways has COVID-19 added a new layer of complexity to the construction industry?

We have implemented strict CDC-recommended protocols to operate sites in the safest way possible. A benefit has been when materials are in close proximity, we have been able to get them to the job quicker because there is not as much traffic or disruption on the last-mile supply chain. On the first-mile supply chain, however, we witnessed significant disruptions.

What are your near-term expectations?

Service has always been at the core of our business, whether that is the corporate service side of the business, management or development. We strive to service our clients at the highest levels. For 2021, as vaccinations continue, we believe Charlotte and the Sun Belt are both poised to have a great run for the next five to 10 years. On the corporate service side, we have to continue to be nimble and flexible to flow evenly with our clients and their needs, which change daily and at a heightened pace.

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More than $3 billion in investments and developments are planned for Charlotte’s Center City for 2021 and beyond.

( ) challenged the real estate sector while creating new opportunities for innovation and growth in a post-pandemic world. Fueled by a continued population inflow, attractive job opportunities, and capital investments, the Queen City has rolled with the punches created by the health crisis, which bodes well for business and individuals and the places where they live, work and play.

Residential In Charlotte, while commercial real estate contends with some COVID-related uncertainty, the housing market has experienced a record-breaking boom throughout the pandemic landscape.

Charlotte was a hotbed for in-migration well before the pandemic as individuals arrived in the region attracted by the area’s affordability and job

REAL ESTATE OVERVIEW

opportunities. According to census estimates released last May, Charlotte added nearly 13,200 residents from July 2018 to July 2019, a 1.5% increase, the Charlotte Observer reported. The population growth has placed Charlotte as the 15th-most populous city in the country, according to May 2020 census estimates.

Over the last decade, population growth stands at 19.9% from 731,400 in 2021 to 885,700 as of July 2019, the newspaper reported.

The coronavirus dampened the desire to live in densely populated markets while fueling the drive to live in growing, affordable and tax-friendly markets like Charlotte. The region’s strong corporate culture mixed with the added benefits of remote work make Charlotte among the desirable Sun Belt destinations, capturing in-migration from the Northeast and West Coast.

Throughout the current housing market cycle, homebuyers have grappled with record-low inventory levels, rising home prices, and bidding wars. The strong demand for housing has led to a steady increase in prices for real estate across North Carolina and Charlotte alike. North Carolina saw an 11.4% year-over-year price gain in the fourth quarter of 2020, according to the Urban Institute. This is almost double the 6.4% growth rate the state saw in the fourth quarter of 2019. Deeming the sector essential was critical for the success of Charlotte and the state’s housing market. The supply of homes for sale in the Charlotte MSA reached critical lows, according to various industry reports. Current housing supply as of April 2021 in Charlotte stands at a little more than two weeks of inventory available, a sign of a hot residential housing market, Norada Real Estate ( )

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Demand drivers Limited inventory, remote work and the demand for open spaces are among the drivers changing the residential segment. Leaders in the sector weigh in.

Daniel Cottingham CEO Cottingham Chalk

What are the main factors driving the real estate market in the last few months?

With inventory limited and interest rates so low, it’s a great time to be selling a house because those factors translate into higher prices. We have also seen new demand from people moving here from other markets and people who have new housing needs due to the pandemic. When people are stuck at home for months on end – working from home, learning from home, playing at home – their needs change. The buyers who are successful in bidding wars are comfortable moving quickly. They have educated themselves on the market and have a very good agent in their corner.

To what extent are sellers willing to put their properties on the market right now?

That is one piece of the inventory shortage. There is certainly a segment of the population that would consider selling under normal conditions, but they are not yet comfortable with buyers coming through their house.

What are your expectations for the residential space?

From a long-term perspective, we are in a great position as both individuals and companies see Charlotte as an enticing place to live. Companies continue to invest here, and our local leaders recognize the importance of responsible growth. There are challenges ahead, no doubt – public transit and affordable housing most notably – but Charlotte is committed to addressing these through its long tradition of public/private partnerships.

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Valerie Mitchener Owner HM Properties

Which factors are influencing the residential market in Charlotte?

The most significant factor driving our market is simply the number of people wanting to move here. Charlotte keeps moving up in the ranks for the top places to live as compared to other U.S. cities, which has been a big boost for us. The primary reason people used to move to Charlotte was a job transfer or to be near family. In 2020, the buyer profile that stands out the most is the buyer moving just to move and wanting to be in Charlotte.

What efforts should be made to increase inventory in the city?

The only way that we can have more inventory is to build more units including both single and multifamily.

Building more houses is challenging because of supply issues and a limited labor force. I think we are going to have this problem in Charlotte for a while. This is not going away in 2021.

How is the rental market performing?

The rental market is strong and consistent. The lack of inventory has made temporary housing a huge commodity. As people from all over the country relocate to Charlotte, the demand for rentals has increased. There are new apartment complexes being built to accommodate the influx of residents. Existing complexes have limited availability. There is also a large percentage of the population interested in renting single-family homes which are even more challenging to find. As long as our inventory remains low, the rental market will continue to be strong.

REAL ESTATE ROUNDTABLE

John Porter

President Charter Properties

What impact did the pandemic have on rental rates?

Where we operate in suburban locations, the impact was negligible in terms of any negative impact. We still continued to get modest rent increases depending on the market but we’re primarily in suburban environments so occupancies are very strong and rents continue to be good. We get a lot of traffic in the suburban locations.

How has work from home affected how you design and size your units?

What we’re seeing is that our smaller units need to get bigger and our larger units are probably fine. We have been out there building units for some time that are today called “build to rent.” That’s not a new product for us, but that’s becoming a hot topic, with people building single-family homes much more and townhouses for rent. We’ve been doing a townhouse rental product for many years as part of a larger apartment development.

We’ve expanded our offerings in that regard over the years and we’re still doing that. We think that those are particularly well-suited to those who want less dense circumstances but still have something that feels more like a house without having to buy and own something and have that expense. We’re also thinking about how people want to access our product. They’re far more comfortable doing it electronically than they were maybe a year or two ago. And there’s less of a need to do it in person; there’s certainly some things like relationship building that are really valuable in person but in terms of touring the unit, they can do it by video. They can even rent a unit electronically, so we’ve instituted that like most of our competitors for prospective residents.

Yuriy Vaynshteyn

President & CEO Engel & Völkers Charlotte

How has the pandemic impacted the shortage of supply in new listings?

Pre-pandemic, we had a shortage of housing supply, primarily in medium and low-income neighborhoods.

Interestingly, up until now, this trend has continued but the demand has accelerated in the higher-end properties. This can be explained by the companies and executives moving to Charlotte. Prices only continue to increase, buoyed by the lower interest rate mortgages.

This is a perfect storm to bolster real estate prices but hopefully we’ll begin to see more supply coming to the market as the pandemic eases.

Which areas have been the most attractive?

Mecklenburg County has always been attractive but we are seeing demand all over the Carolinas. The Rock Hill area and Lancaster County areas are growing well but Mecklenburg is certainly outperforming. I cannot pinpoint any area that has not benefited from this increased demand within the Charlotte MSA. People are now investing more in their homes. They are setting up offices and investing in new equipment to enable them to perform their jobs from home. Given the investment people are making, it seems that the working from home trend will continue, especially since people have been just as productive working remotely. This is especially important when safety can be guaranteed and other aspects of life can work around corporate life. Home offices should be a significant priority going forward but people still need to have a separation of work and home space. There will be an ongoing focus on a dedicated office space in residential constructions and renovations. www.capitalanalyticsassociates.com

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REAL ESTATE OVERVIEW

The desire to move away from densely populated cities mixed with record low interest rates has sparked housing demand.

( ) reported in its 2021 Charlotte Real Estate Market & Investment Overview.

The ultra-low interest rate environment is another contributing factor in Charlotte’s housing boom.

Homebuyers, lenders and industry professionals are closely monitoring a potential rise in rates, but given the overall economic climate, rates are likely to remain low for the foreseeable future, which bodes well for buyers. “Rates have never been this low, but whether or not they’re going to stay that way is another question,” Lake Norman-based Kate Gaither, Owner of Newport Properties, told Invest:. “When I started in this business, rates were 17% for a fixed mortgage.

Now, we are under 3%. You can buy a lot more house for your money if you make that decision now.”

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homebuilders in a post-COVID world. The Urban Institute’s 2021 Emerging Trends in Real Estate ranked the Queen City fifth in overall real estate prospects and 11th in homebuilding prospects. Similarly, a bevy of Charlotte neighborhoods topped Niche’s 2021 Best Places to Live rankings in North Carolina as Queen City neighborhoods dominated the review website’s Top 25 spots.

The combined factors of the remote work landscape, overall affordability compared to other markets, strong homebuyer demand and low supply are set to carry the Queen City’s residential market throughout 2021 and beyond. The dynamic residential market does pose challenges for economically embattled individuals who faced COVID-related job losses.

Statewide eviction moratoriums have been extended through June 30, 2021, providing respite to renters

REAL ESTATE OVERVIEW

and homeowners experiencing economic hardship.

However, affordable housing remains a top priority for public and private leaders in the Queen City.

Affordable housing The economic mobility challenge in Charlotte is an ongoing issue exacerbated by the current health crisis.

The Charlotte city government estimates that more than 24,000 units of affordable housing are needed to meet the current demand, a goal that will need the concerted efforts of public and private partners to satisfy the need. The 2014 Chetty Study that ranked Charlotte last among the 50 largest U.S cities in terms of economic mobility remains fresh in the Queen City’s cultural zeitgeist. In response, nonprofit Leading on Opportunity was created in 2017 and is focused on affordable housing, early-childhood education and career preparedness and training together with a coalition of philanthropic and other nonprofit agencies, local government and major employers.

In 2020, voters overwhelmingly approved more than $200 million in General Obligation bonds earmarked for infrastructure improvements, affordable housing and local neighborhood rejuvenation projects.

From the bonds, $102.7 million will be allocated to transportation, $50 million to affordable housing and $44.5 million to neighborhood improvements.

Hailed as a key victory for Charlotte, these bonds demonstrate that the city is willing to make the necessary investments in infrastructure and housing stock to best further the city’s reputation as a great place to live, work and do business. The bond package is the fourth to pass after similar packages in 2014, 2016 and 2018.

Flint McNaughton CEO & Founder SunCap Property Group

What are your observations regarding the manufacturing space?

We have seen certain industries and manufacturers hit the pause button, slowing down their decisionmaking process as they try to figure out what the final impact of the pandemic is going to be. The view out the windshield today is not as clear as it has been with the combined effects of the virus, the presidential election and recent social strife. The incumbent administration’s policies, together with COVID-19, have triggered a wave of repatriation processes, particularly with the manufacturing arm of the pharmaceutical space. This trend is great for our business as we do a fair amount of work for automotive suppliers and manufacturers.

How would you gauge the performance of the multifamily market?

The key marketplaces where we are investing in multifamily, including Charlotte, Raleigh, Greenville and Charleston, are all growing significantly. There are 40 to 50 people a day moving into these communities, which translates into real demand for our product and what we are doing. Our typical multifamily projects consist of infill locations, more boutique and smaller, high-end projects. We have a thesis that there are people moving out of bigger, more expensive homes, in places such as Myers Park and Eastover in Charlotte, and that the market would seek out places such as SunCap’s Draper Place apartment community. Despite COVID-19, we are leased up and will be pulling the trigger on projects in these marketplaces. Long term, we do think demographers are going to be writing about this growth trend and migration to the Southeast and other Sun Belt states. Big companies are moving headquarters to these Southeastern cities and for good reason. Right to work states, high-quality workforce, growing communities, and great weather are just some of those reasons. And, Charlotte is at the epicenter of all that. We are bullish on Charlotte.

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Housing affordability remains a key priority for development, government and private sector leaders.

The private sector has played a pivotal role in funding affordable housing-related initiatives. Banking giant, Wells Fargo, for example, has invested more than $20 million over the years to help spur affordable housing opportunities in the region. “We also provided a $5 million equity grant to the Housing Opportunity Investment Fund to help match the city of Charlotte’s $50 million bond referendum,” Charlotte Regional President Kendall Alley told Invest:. “In addition, we’ve made more than $9 million in commitments to support local community development nonprofit organizations focused on addressing the issues of affordable housing, workforce development, smallbusiness development, financial empowerment and neighborhood revitalization in Charlotte.”

Similarly, in 2020, Charlotte-headquartered Bank of America and its Community Development Banking division provided a record $5.87 billion in nationwide loans, tax credit equity investments, and other

REAL ESTATE OVERVIEW

real estate development solutions to address the affordable housing need nationally and in the Queen City. Locally, the bank financed more than $40 million in housing in 2020, the Charlotte Business Journal reported.

Additional to funds created for new ground up construction of affordable housing projects, the preservation of existing housing stock is also a key component of maintaining affordability in the region.

Traditionally, the affordable housing industry has been focused on new construction financed by lowincome housing tax credits. Local groups like Ascent Real Estate Capital are focused on preserving Naturally Occurring Affordable Housing (NOAH). “The thought process is that protecting existing affordable housing is as important as trying to create new units when trying to tackle the affordability crisis,” Managing Partner Jon Dixon told Invest:. “We purchase existing multifamily apartment complexes that are in the

path of progress, being targeted by value-added groups. Through social impact capital (private) and low interest rate debt from the city’s Housing Trust Fund (public) we are able to buy a property that is vulnerable to losing its affordability and put longterm deed restrictions in place that maintain certain amounts of the units be leased at 30%-80% of area median income (AMI),” he said.

Public and private leaders are keenly aware of the need for housing affordability in the Queen City, especially as the population grows. Guided investments such as the General Obligation bonds mixed with private investment and creative solutions on behalf of the development communities will be key for the region’s affordability factor in a post-COVID future.

Multifamily On the multifamily front, Yardi Matrix’s Multifamily Report Winter 2021 showed that demand continues ( ) www.capitalanalyticsassociates.com

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REAL ESTATE INTERVIEW

Brisk activity Despite geographical and logistical challenges, Northwood Office continued to source new opportunities during the pandemic

John Barton President – Northwood Office of this collaborative, proactive investment approach during the disruption of the pandemic. This acquisition, which was coupled with the simultaneous purchase of two office buildings and a development parcel in suburban Nashville from the same seller, reinforced Northwood Investors’ strong commitment to Charlotte and the Sun Belt.

What does the Metropolitan Complex project mean for Northwood Office?

Northwood’s investment and operational activities have been brisk during the pandemic. As a global private equity firm, our U.S.-based teams were able to anticipate early some of the challenges and opportunities related to the pandemic based in part upon the experience gleaned from our European properties, which endured the initial impact of the pandemic earlier than the United States did. Northwood’s four operating platforms (office, hotel, retail and multifamily) have continued to work closely with our acquisitions teams to source new investment opportunities throughout the duration of the pandemic, despite many geographical and logistical challenges impacting buyers and sellers alike.

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What is your take on the future of retail?

Our retail platform continues to see a rapidly evolving retail landscape, which has been accelerated by the pandemic. As investors and operators, we are approaching the retail experience with an extreme focus on understanding and anticipating consumer behavior in the midst of a disruptive and relatively uncertain environment. As we think about Ballantyne Reimagined, we continue to revisit our design plans to ensure we provide what consumers and retailers want now and in the future. We are making spaces more open and accessible and providing more opportunities to spread out. The goal is to create spaces that are flexible and can accommodate different programming opportunities that can vary depending on the time of day or user.

What are your expectations for 2021?

The health, well-being and safety of our team members and customers have always been paramount to Northwood. That was the case pre-pandemic and will continue to be so post-pandemic. Making sure we generate a reinvigorated corporate relocation pipeline to Charlotte will also remain top of mind, working together with the city and county’s economic development teams and the Charlotte Regional Business Alliance to bring more businesses here. There is significant opportunity for Charlotte, and when the region wins, we all win.

REAL ESTATE OVERVIEW

( ) to stay strong. In November, overall rents averaged $1,229, the report showed. Always considered as a safe investment, a total of $2.2 billion in multifamily assets traded in Charlotte in 2020, Yardi Matrix reported. As of November 2020, more than 14,000 units were under construction in Charlotte.

The pandemic accelerated the trend of population growth shifting from high-cost gateway cities to emerging markets throughout the Sun Belt, with Charlotte being among the most desired destinations for both individuals and corporations seeking to relocate. That’s according to JLL’s Better Than Normal: Vision 2021 report citing that 90% of population shifts since the onset of the pandemic have been driven by reduced housing costs.

The wave of homebuyers in Charlotte, buoyed by low interest rates, that has kept housing supply at record lows, pushing up prices, means renters with tighter budgets have been priced out and will likely continue to be renters in 2021 and beyond. Similarly to the challenges in the housing market, the multifamily space is also facing a shortage of inventory. Following the completion of 8,182 units in 2019, developers added only 4,310 units last year through November, Yardi Matrix reported. These challenges are likely to persist. As such, the pandemic’s impact is expected to increase demand for the Renter-by-Necessity product, according to Yardi Matrix.

The desire for outdoors space and improved working environments may translate to the multifamily front as well. “In multifamily, people may also want more

After completing 8,182 housing units in 2019, developers had added just 4,310 through November 2020 access to outdoor space in their communities and space to work from home, not just in terms of square footage but also in terms of privacy,” Red Hill Ventures CEO Todd Collins told Invest:.

For developers, capitalizing deals amid a global pandemic has been a constant challenge. “Some banks are pushing in the clutch a little bit because of COVID, just unwilling to make some of the loans that they would have pre-COVID,” Selwyn Property Group Partner Grey Poole told Invest:. “Most observers would probably say that’s a short-term phenomenon but it’s one of the bigger challenges we see out there. A lot of it goes back to the fact that COVID has created a great deal of uncertainty and some people are just waiting to get to the other side of it.”

It is estimated that more than 72,000 apartment ( )

Darryl Dewberry Chairman & CEO – The Spectrum Companies

The first of our two 11-story office buildings is scheduled to be delivered in early 2021. Our anchor tenant, Lending Tree, is building out its new offices. The company is working remotely at the moment so its move-in date is still to be determined. Our team is negotiating a lease with a junior anchor as well, a highly prominent professional services firm. In addition, we are working on finalizing some food and beverage offerings. We are confident this first building will be fully leased in short order. The second building broke ground a couple of months ago and is scheduled for completion by the first quarter of 2022. We are in conversations with two different hotel groups to establish a signature hotel at the property as well.

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REAL ESTATE OVERVIEW

( ) units will be needed to meet market demand by 2030, the Yardi Matrix report pointed out, citing a study by the National Multifamily Housing Council and the National Apartment Association. Fortunately, despite the pandemic, Charlotte’s underlying fundamentals of population growth and strong economic base mixed with stabilizing unemployment rates bode well for the sector when factoring in market demand and the shortage of multifamily supply.

As the nation, and the Charlotte market, edge toward a post-COVID future, opportunities look ripe for investors wanting to fund the next wave of multifamily developments in the Queen City and for individuals seeking to maximize the familial and professional upside potential the market has to offer.

An estimated 72,000 apartment units will be needed to meet market demand by 2030 Commercial Of the major real estate asset classes, properties that fall under the commercial umbrella sans industrial, namely office, retail, and hospitality, were among the hardest hit by the pandemic, both nationally and locally. The rapid shift to remote work, changing consumer behaviors bolstered by the convenience of e-commerce and the initial lack of confidence in travel fueled the uncertainty in the commercial real estate market. Thankfully for the Queen City, the decade preceding the onslaught of the virus was characterized as the most prolific period in the Charlotte office, residential and hotel construction industry in the city’s history. Though shaken by the COVID-related challenges, this strong foundation has allowed the market to weather the storm and fuels the confidence of a robust recovery as 2021 carries on.

At the end of 2020, Charlotte’s business district saw a surge in sublease office space, and absorption decreased year over year. Leasing velocity ( )

Perspectives: Sectoral views Allen Brown Assistant Vice President – LRC Properties From an office standpoint, I don’t think the market is going to get better anytime soon. There are still too many unknowns.

I think the suburban office market will come back before CBD simply from an accessibility standpoint. It is a lot easier to socially distance and access your office in a three- or fourstory building compared to having to ride an elevator in a large 40-story tower. Industrial will continue to stay hot.

Eb Moore CEO – Wilkinson ERA Real Estate As information and protocols emerged, we safely began showing homes and as we entered the summer months, pent-up buyer demand drove the sellers’ market forward with considerable momentum. 2020 closed with one of our best years in the real estate business. Last year taught us to move forward despite the challenges and uncertainty that lie ahead.

John Nichols President – The Nichols Company We’ve been focusing a lot on suburban land, which has been largely unexpected. I still think the urban corridors, which are ghost towns right now, will bounce back very quickly. People are still actively looking for property for apartment complexes and mixed-use buildings. The entry of the Silver Line to the area will change the landscape all the way from Independence up to the airport.

Cristy Nine Corporate Managing Director, Charlotte – Savills In terms of activity, Downtown Charlotte is very quiet.

There is definitely more activity in the suburbs, which is a function of the smaller-footprint client the suburbs tend to attract. It is too early to tell, though we believe Charlotte is one of the places that will benefit most from the urban outflows of people.

Larry Wilson Regional President – KDC Real Estate Development & Investments Some retail assets have absolutely thrived in this environment, such as grocery stores. Others have been severely crippled to the point of improbable comeback.

Whether that becomes asset repositioning or use modification remains to be determined. Opportunities will abound, no question.

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oundtable:

Commercial reflections From industrial to mutlifamily, there were both challenges and opportunites in the Charlotte market. Leading players reflect on an unexpected year.

Greg Copps

Managing Partner, Charlotte Colliers International

What were some of the indicators for the company in 2020 and how have things shifted?

We are strong in industrial and office brokerage and our year was led by these sectors. We have a good client base in industrial and that has gone through 2020 with no shortage of capital for investment properties and high demand for industrial land. Amazon is continuing to snap up space across the country and Charlotte is no exception. Some of the other retailers such as Target and Walmart are starting to build out their e-commerce supply chain too, but they still need to catch up. The office sector has slowed but creative deal making and solid relationships along with Charlotte being very well positioned continues to generate positive brokerage momentum. On the multifamily and retail side, the story is a little different, but our firm is quite nimble and entrepreneurial so even during downturns there are always ways to assist clients. During 2020, we had to work harder and differently but we ended up experiencing a good year with positive revenue.

What are some of the new business lines introduced in 2020?

We were focused more on expanding some of the tools we already had, including mapping, graphing and putting together virtual presentations. We wanted to leverage the overall Colliers platform to produce bestin-class materials. We now want to continue to build out our multifamily platform and our office agency business and hire best in class brokers in all disciplines. There is definitely room for growth in Charlotte for Colliers and we will continue to build out the team.

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Brett Gray

Managing Principal Cushman & Wakefield – Charlotte

How has the Charlotte real estate market behaved in 2020 as compared to your expectations?

I don’t think anyone predicted 2020 and the impacts the pandemic would have on the markets. 2019 was a record year for commercial real estate. Historically, Charlotte has been a very healthy market. We have not overbuilt like many other markets and coming into this year there was a significant amount of new development activity occurring. However, when you peel back that layer in the office market, for example, the majority of that was pre-leased. Our risk profile was far less than the square feet being developed on paper.

There’s no doubt that the Sun Belt has shown a great trend of growth and in-migration. In particular in Charlotte, we have access to the beach and mountains, great weather, fantastic quality of life, all with a belowaverage cost of living. When companies are looking at coming to Charlotte, all of these factors make it attractive to relocate here.

Do you see the trend of moving office space toward the suburbs staying in the long term?

Charlotte has been experiencing reverse migration to a degree as millennials are starting to have families and move to the suburbs. However, I don’t believe there will be a massive trend of moving office space to the suburbs simply as a result of COVID-19. We are still going to see growth and development in what we call the urban core. At the end of the day, our Central Business District is still the engine that makes Charlotte’s economy go; it’s still our largest submarket. Therefore, we’ll continue to see growth in the area.

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Chris Thomas Partner Childress Klein

What were some of the highlights and milestones Childress Klein experienced in 2020?

It was certainly an interesting year and there were many highlights. CK is a diversified organization with industrial, office, retail and multifamily developments. Some businesses have continued to thrive through this pandemic and some, like retail, have been more challenged. We’ve spent a lot of time in the past year with our tenants and we have proactively managed our portfolio. We are fortunate to have several long standing third-party leasing and management relationships that comprise part of our portfolio. We’ve met a lot of challenges working with our tenants in our centers. The great majority of our tenants are folks who we’ve known for a while and when they’re having difficulties, we’re going to do our best to partner with them. We’ll continue to do this as we look for improvement in the second half of 2021.

How has COVID legislation affected your tenants and changed your projections?

I don’t necessarily believe it significantly altered our projections but it certainly was a lifeline to many of our tenants. As an industry, we depend on small business.

As I work on retail developments, I can see that the consumer is less interested in certain chain stores and chain restaurants than they once were. People want to support interesting small businesses that provide an experience. So, the fact that our tenants who fit this mold were able to get that kind of help, I’m very grateful.

I think it did make a difference. We’ve seen tenants who have taken the attitude that they will survive this and rebuild what they have.

Ben Yelm

Regional Manager, Charlotte Marcus & Millichap

How would you characterize the pandemic impact on the local market over last year?

I think the biggest initial impact on the investment sales world is just uncertainty. During April and May of 2020 there were many questions regarding what was going to happen. The biggest sectors were retail, office and hospitality. Obviously, people were not going to work from the office and a lingering question is how that return will look in the long term. Things started to pick back up during September and October, and November and December yielded strong numbers for us last year. We had a better sense of what was going to happen. Tenants were still paying their rents and while we saw the closure of many businesses, it wasn’t the potential catastrophe that people thought it was going to be at the beginning of the pandemic. As we got used to the new normal, adjusting and gaining clarity led to a pick-up in transactions. Now, vaccines are rolling out and people are more comfortable wearing a mask and navigating things. At this point it feels like it did like in February before it all started.

How is the real estate market positioned now?

The mentality among my agents and the investors that we work with is back to normal. In some sectors we saw a pricing correction, but it was not unreachable. A lot of people initially decided to wait and expected to buy in 4Q20 at a cheaper price but that was not the case.

Multifamily cap rates and single-tenant rates actually compressed a little last year. Multifamily proved to be very durable. For central retailers there was a lot of safety perceived in those, their sales picked up and they managed the pandemic well. www.capitalanalyticsassociates.com

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( ) slowed and deal renewals capped off a tumultuous year, according to various industry reports. Total office vacancy hovers at 13%, according to JLL’s 2020 Q4 office report. Both direct and sublease asking rents remain flat staying at $32.56 per square foot and $29.54 per square foot, respectively, JLL reported. At the end of Q4, there was more than 1.1 million square feet of sublease space marketwide, according to JLL data. Industry experts expect more sublease space to become available throughout 2021, as companies reconsider and consolidate their commercial real estate needs.

Concessions remained on the rise, the JLL report noted, a common theme for commercial real estate as landlords and tenants navigated the uncertainties of the pandemic. “There have been new clauses added to leases for these unforeseen events,” Boundary Street Advisors Principal William Haygood III told Invest: regarding lease structures throughout the pandemic.

“In this environment, there’s been a lot of attention to things like subleasing and our ability to help with landlord conversations about the flexibility of lease terms. The durations of the new leases have generally been the same, but you are finding more people moving to Plaza Midwood, West Charlotte, Freedom Drive, all places where we play, which is exciting for us,” he said.

While the developers, commercial brokers, and investors look forward to a strong recovery in 2021, the Charlotte region fared relatively better than other comparable markets and netted strong victories despite the pandemic.

In what has been hailed as the biggest economicdevelopment deal in North Carolina’s history, health-

HQ relocations by companies such as Centene and Robinhood were key wins for the commercial sector in a year marred by uncertainty.

Chase Monroe Market Director – JLL Carolinas

Industrial real estate has been in a boom period. Industrial tenant demand is up 20-40% depending on the region. E-commerce has surged to 16% of all retail sales since the onset of COVID and has spurred a corresponding surge in demand for warehouse and distribution logistics space across the Charlotte region. It’s hard to find industrial space in favorable locations in the highly dense markets of larger cities. In Charlotte, we are fortunate because two to four miles out from our Central Business District, we can create industrial hubs. Fifteen miles out, there are plenty of existing options that can be customized for distributors and industrial users.

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insurance giant Centene announced in July massive plans for its East Coast regional headquarters and technology hub on an 80-acre site in the University City area. This project is expected to employ more than 6,000 workers with average salaries of more than $100,000 a year, Centene reported.

The Centene deal is just the tip of the iceberg. There is an estimated $3 billion in new developments in the pipeline just in Center City, defined as Uptown, South End and Midtown areas, according to Charlotte Center City Partner 2021 State of the Center City Report.

Similarly, more than 5.9 million square feet is under construction in the market, according to JLL. The Charlotte region has sustained “incredible interest from institutional investors subscribing to the promise of Charlotte,” Charlotte Center City Partners President and CEO Michael Smith told Invest:.

Investors recognize the long-term success inherent in the Charlotte market. Currently in the planning and initial development phases of its East-West Station project, San Francisco-based Shorenstein Property is among the many developers turning to the Queen City for opportunities. “Our plan is to build a 375,000-square-foot office building along with a parking garage and retail sitting right on the light rail line,” Shorenstein Properties Managing Director of Investments for Group East Matt Knisely told Invest:.

“There is no question that 2020 was a challenging year, but Shorenstein has always taken a long-term approach to investing. Our view is that these long-term investments that we’ve made in cities that we find particularly attractive, like Charlotte, will bear fruit.”

The East-West Station project is one of three projects Shorenstein Properties has planned in the Queen

Charles Hodges President & CEO New Forum

What makes Ayrsley and Southwest Charlotte unique?

When we got involved with Ayrsley, Southwest Mecklenburg County was the second-largest business district in the Carolinas. Interestingly, the district had no discernable urban center or nucleus. Essentially, Ayrsley became that. We provided the services that were needed for many business in our part of town.

Southwest Charlotte has some really large campus employers; Siemens, Microsoft, and Spectrum top the list. Those companies need places for their people to eat lunch and dinner and hotels for their out-of-town business guests. Ayrsley meets those needs.

What’s going to happen next?

We’re getting pretty close to being built out in Ayrsley.

We’re asking ourselves the big question that most folks in commercial real estate are asking: what’s going to happen with workforces and companies and how they work? I think we’re going to see a new order after the pandemic. I’m not as pessimistic as some or as optimistic as others. We’re trying to figure out exactly how companies are going to attract their workforce and how office space will look in the future. We’re also looking at interest rate volatility, valuations, tax strategies, inflation / deflation and alternative investments. We think there will be some significant new drivers influencing real estate over the next five to ten years and we’d like to understand those dynamics.

Is the shopping center model still viable?

That’s actually worked out pretty well for us; groceryanchored centers and fast, casual dining have fared pretty well during the pandemic. We look for existing assets where we can add value by repositioning, architectural modifications, marketing and leasing. We like what we’ve acquired so far, and it’s a lot less of a headache than ground-up development, as long as you can get things done at a reasonable price.

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There is an estimated $3 billion in new developments in the pipeline just in Center City

City. “There is a significant contingent of people and companies moving to Charlotte and we are investing accordingly, and are excited about what we can create here over 2021 and for many years to come. We have found the Queen City to be open and welcoming to new companies, new businesses and new people, and we are pleased to provide high-quality office spaces to this growing city,” Knisely said.

The pandemic also fostered time and effort to better make use of Charlotte’s current and historic assets. For example, ATCO Properties & Management Camp North End project, a mixed-use development just outside of Uptown is reimagining the fabric of Charlotte’s past for success moving forward. “The vision is to reimagine a collection of industrial buildings that are incredibly rich in both history and character, as a new and modern space for offices, retail, food and entertainment,” Development Director Tommy Mann said about Camp North End. As companies consider the return back to the office, creating a working environment that reflects a tangible representation of their brand that employees will interact with on a dayto-day basis will be key moving forward, Mann said.

“Companies that recognize the importance of that will choose a product like what we’re offering at Camp North End. Adaptive reuse space has so much more character and is such an energizing space for workers,” he said.

There undoubtedly will be winners and losers coming out of the pandemic for the commercial real estate sector. Yet, despite the cyclical nature of commercial real estate, potential investment opportunities may still be present in the local market.

“Banks are beginning to see an increased flow of ( )

Market voices: Growth regions

Brannen Edge

Managing Partner, President & Chief Executive Officer Flagship Healthcare Properties

As we evaluate our markets, we are invested in 10 states in the Southeast and Southern Mid-Atlantic region. We want to grow our investment across all those markets. Looking at submarkets, there are a lot of important factors, such as size, population growth, senior population growth, levels of insurance coverage, the number of healthcare systems and the presence of certificate of need laws. We also look at economic trends, including how unemployment rates will rebound and where they will lag. We’re looking closely at changes to the Affordable Care Act and how that will change the outlook. Generally, any development that expands access to healthcare is good for our business.

In addition to Northmarq’s private ownership and amazing access to capital, the trust within and collaborative nature of our team is the main differentiating factor. Our deep client relationships are unmatched because we are the result of two very dominant teams coming together. Clients hire us because we are advisors first and foremost, work as a pack, and are extremely well-coordinated. We don’t focus on volume; we focus on quality, and we are able to deliver superb results through a true team effort that we believe is unmatched in terms of trust, comradery, and partnership.

Jared Londry

Co-Market Leader & Executive Managing Director Stream Realty Partners

Andrea Howard

Managing Director of Investment Sales Northmarq

I would never count Northwood out. Ballantyne is established and it’s such a great place already, so people might not view that as up and coming, but I think Ballantyne is going to look like Buckhead in 5 years, and in 10 years, we might have traffic like Buckhead in Ballantyne. Overall, the perception and desirability of Ballantyne is going to change dramatically just because of what John Barton and team are doing.

Outside of that, Fort Mill has seen a huge amount of growth, looking at the other side of the border. And if you are looking more infill, urban locations, the Music Factory still has a lot of opportunity in the office and multifamily side because it’s so close to Uptown. That, and Freemore West, on the backside of Uptown, will all feel much more connected as the growth continues.

There are definitely hot pockets of growth and continued speculative construction. The State Line Industrial submarket, located at the southernmost portion of Mecklenburg County, as well as the York County, SC submarket have experienced tremendous demand. Similarly, the Cabarrus County Industrial submarket has been desirable to logistics firms like Amazon, which now leases over 1,500,000 SF of warehouse space in nearby Concord. The connectivity provided by access to I-85, I-77 and I-40 is highly desirable to logistics firms.

Karen Mankowski Associate Director Newmark

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REAL ESTATE OVERVIEW

( ) real estate owned (REO) assets coming into their portfolios,” Coldwell Banker Commercial MECA President Rob Pressley told Invest:. “One of the services we provide in our asset management group is lender representation in the management, marketing and disposition of REO assets as they foreclose on commercial and land. Our largest bank client is one of the Top 10 banks in the country. We manage their entire U.S. REO portfolio out of Charlotte. We are already seeing an influx of properties coming into that portfolio of foreclosed assets. We will be focusing a lot of our energy as we did in 2009-11 on the management and disposition of REO assets. We don’t fear a down or softened market. Opportunities are available that are not present in a good market.

We have a lot of investors who have been sitting on the sidelines with a lot of capital who are looking to invest and take advantage of assets that maybe will begin to become either realistically valued or even undervalued going forward,” Pressley said.

An emphasis on health and safety and workforce flexibility is likely to characterize companies’ office return strategy.

Industrial The industrial sector was a beacon of light for the commercial market in a year clouded by uncertainty and challenges for the sector at large. The local industrial market capped off a tumultuous year on a high note, with 2 million square feet of positive net absorption in Q4 alone, bringing the 2020 total to 5.3 million square feet, up 123% over 2019, according to Avison Young’s 4Q20 industrial market report. More than 7.6 million square feet of new space was delivered in 2020, and Charlotte’s inventory has grown by 15% in the last five years, Avison Young noted. Charlotte’s

Sandor Scher Principal – Claro Development

I think there’s a lot of work that can be done in a constructive way on the planning front. Historical preservation is incredibly important, it’s been our bread and butter for the last 15 years. We need to evolve and finding ways to incentivize development from a planning perspective as opposed to penalizing and restriction is a fundamental paradigm shift that needs to happen, although it’s not an easy task for politicians and planners. The old version of historic preservation without connecting the properties to modern development requirements and the changing needs of our guests is simply not an effective long term strategy.

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investments over the last decade mixed with scale projects announced in the latter. Gaston is on our availability of land in key submarkets positioned the radar in part because we have an office there. Being just over the North and South Carolina line, York-Lancaster industrial market for a strong performance in 2020.

As of the end of 1Q21, total vacancy sat at 5.8%, is the third big region that has been in high-growth according to JLL’s 1Q21 industrial market report. mode. The NFL’s Panthers are not only relocating their Though demand remains high for the sector at large, headquarters but also building a massive campus that rents remain mostly flat at $4.82 per square foot would include a medical office, retail, hotel and new for direct asking rent and $5.14 per square foot for exits being built on I-77 just over the state line. York sublease asking rent. According to data by JLL, the and Gaston will continue to see a monster amount of region has 2.3 million square feet already committed growth,” he said.

The boom in e-commerce is exto move-in dates through the pected to drive investment opporend of the year. tunities in the Charlotte market.

The I-85 and I-77 corridors have However, the main challenge become hotbeds for build-to-suit to the market’s health could be and speculative industrial real eskeeping up with demand. As of tate space. York and Gaston coun1Q21, there was 6,995,981 square ties particularly have attracted feet of new construction undera great deal of demand thanks way, JLL reported. If industrial to their proximity to Charlotte space cannot quickly meet the proper and key locations along market demand, JLL warned, the interstates. York County’s 1.9 users and developers might eye million and Eastern County’s 1.2 Rob Pressley other Southeast hotspots to place million square feet led submarket President, Coldwell Banker Commercial MECA their requirements and capital. construction activity, according The Charlotte industrial market, strong in to JLL. As a result of the explosion of e-commerce in the last couple of years, and its acceleration during warehouse, logistics and manufacturing companies, the pandemic, more users are seeking locations in the could become a viable destination for the life sciences city of Charlotte and surrounding towns to position sector, a sector dominated by sister market, Raleighlast-mile distribution centers to serve their in-town Durham. The upcoming medical school, a joint effort customers, JLL reported. “The two (hotbeds) that by Atrium Health and Wake Forest University, will stand out right now are York County to the south and further bolster the market’s already strong medical Gaston County,” Coldwell Banker Commercial MECA’s sector while ushering in new opportunities for local Pressley told Invest:. “There have been some large- life sciences companies and in turn the industrial real

York and Gaston will continue to see a monster amount of growth

David Kennedy President Canopy Realtor® Association

How would you sum up Charlotte’s residential market?

What we see is that the same types of homes that were bought and sold on Canopy MLS prior to the pandemic are still being bought and sold during the pandemic, with the exception of maybe a pause in the market at the onset of the Pandemic. July and August were recordbreaking. The market continues to be challenged by a lack of inventory. The thing we have to understand about inventory is that people from all over are moving to Charlotte. During the recession in 2008-9, a lot of people lost their house. The housing industry and the builder’s construction industry both took a major hit because of that. Medium-sized builders and the smaller builders vanished. From 2010 all the way up to 2021, without fail, the household growth has outpaced construction on a national level. Charlotte is a desirable place to move to. People are moving from the Northeast and Atlanta to Charlotte. The difference between the Charlotte, Atlanta and Northeast markets is that the cost of living is higher than in Charlotte, so people have more purchasing power. They are willing to pay more and raise the price levels because they think they’re getting a great deal based on where they were living. When supply and demand are imbalanced, such as they are now, the cost of everything going up is not necessarily a good thing because if you could just introduce more inventory, you would flatten out the prices.

What is your near-term outlook?

The fog will start to clear once we start seeing certain things, in particular herd immunity, pre-pandemic unemployment rates and stabilized inflation. It will be 4Q21 before we can see any of that happen. Five million millennials are going to turn 30 this year. These are mortgage-ready millennials. They are the most educated, equipped generation we’ve ever had. They didn’t rush into life-altering decisions such as buying a house they could not afford. The problem is going to be lack of inventory.

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Charlotte’s diversifying economy is set to open the door for the proliferation of new industries such as life sciences.

estate sector. “We’re strong in medicine, but we’re not strong in life sciences yet. Our new medical school by Atrium Health and Wake Forest will change that,” City of Charlotte Economic Development Director Tracy Dodson told Invest:.

A recent report on the state of the life science industry echoes Dodson’s sentiments. The Charlotte market topped JLL’s list of emerging life sciences markets in the United States, according to the brokerage’s 2021 Life Sciences Emerging Markets Index report.

“For an emerging life sciences market to reach full maturity, talent and momentum must combine and synthesize. The best way to ensure that is to provide the foundation for an appealing long-term lifestyle for young professionals, so that they will put down roots and spend their prime career years nurturing the local life sciences ecosystem,” JLL reported. Assessing recent

REAL ESTATE OVERVIEW

GDP growth, millennial population growth projections, income and housing stock growth, the Charlotte market ranked the highest in potential to attract and retain life science professionals, beating markets such as Seattle, Denver, Austin and Nashille.

Looking ahead Despite a challenging cycle, the Charlotte real estate market has rolled with the pandemic challenges thanks to years of continued investments, economic diversification and growth, and continued population growth. Developers, investors, businesses and individuals will need to keep a close eye on the cyclical nature of real estate mixed with ripple effects of the pandemic to maximize opportunities in the Charlotte market. From residential to certain commercial asset classes, the low supply in inventory may create challenges and disrupt investment plans. Conversely, the low-interest environment and the market’s 16 county metropolitan area opens up opportunities for corporations and individuals alike.

Outside of the COVID-related market uncertainty, the Charlotte market is working to improve challenges related to affordable housing and upward mobility via its strong public and private collaborative efforts, which will be critical as the region grows. The region’s robust workforce, diversifying economy, proven track record of attracting companies large and small make it one of the most attractive markets along the Sun Belt. Emerging out of the COVID landscape, the Queen City is poised to be a treasure chest of opportunities for current and new businesses and families looking for a dynamic region to live, work and play.

Construction & Infrastructure: Despite a slowdown in 2020 as the pandemic raged, a rise in material costs and a shortage of labor, the construction and infrastructure industries remain on a growth footing, with strong expectations for the near term and beyond.

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Building confidence: 2020 saw a dip in construction and infrastructure activity but the forecast is for strong growth Close to 850 new people move to the Charlotte metro area on a weekly basis, while companies continue to find the region an attractive relocation destination.

It’s no surprise then that the region ranks among the country’s Top 20 construction growth markets, even with the pandemic.

PwC’s Emerging Trends in Real Estate 2021 report ranked Charlotte No.11 for expected growth in housing construction among the 80 largest U.S. markets. Charlotte Center City alone has continued its decade-long track record of growth and development with $3 billion in new development planned for this year, including 3.9 million square feet of office space, 552,000 square feet of retail space, 5,505 new apartment units and 2,020 new hotel rooms.

The industries driving talent needs in the Queen City in 4Q20 based on the Charlotte Regional Business Alliance Growth Report were manufacturing (51 percent), technology and business operations (33 percent), engineering (6 percent), distribution (6 percent) and call centers (4 percent). It is likely that these industries will continue to drive construction demand, along with the booming residential real estate sector, as they continue to expand in Charlotte going forward.

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In a further sign of the times, by January 2021, North Carolina’s construction unemployment numbers showcased a significant rebound, breaking an 11-month job loss streak. While still below prepandemic levels, between December 2020 and January 2021, the industry gained 1,200 workers, going from 235,800 in February 2020 to 230,700 in January 2021.

Performance In March 2020, ENRSoutheast forecasted the Charlotte-Gastonia-Concord area would see a total $8.42 billion in construction starts in 2020, 1.3% above 2019’s $8.32 billion. Single-family and multifamily construction took up the lion’s share with $5.36 billion while institutional added to commercial and manufacturing construction cumulated $2.13 billion.

One sticking point, similar to other similarly sized cities, is cost. CBRE’s Southeast Construction Costs 2019-20 Report identified a whopping 73% increase in overall construction costs between 2004 and 2019, with labor, materials and regulation being the triad drivers of this long-standing and uninterrupted upward trend. Construction’s primary materials —( )

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Strong year Robust regional economy helps overcome pandemic challenges

Pat Rodgers President & CEO – Rodgers How did your business evolve in the COVID-19 landscape?

We’re fortunate to work in a region with an active and robust economy. While 2020 brought us many challenges, we were grateful to close out the year as one of our strongest and highest volume years to date. While we were able to make progress on some exciting projects, it didn’t come easily, as we had to react and adapt to a new way of operating that came with a global pandemic.

In addition to implementing new safety measures, we had several construction measures in place that allowed work to continue forward. One of those has been the use of prefabrication on our projects. This process has been a key focus for us over the last several years and will continue to evolve as the industry moves in that direction. Prefabrication is exciting and implementing prefab early in the planning phase of a project can result in increased efficiencies, higher quality, reduced overall schedule, and safety improvements. One of our largest projects in 2020 implemented prefabrication across several areas of the build, which helped ease operational impacts due to COVID-19.

What can be done to increase the representation of women in the construction and engineering fields?

I’m happy to say that since I entered the industry, representation has increased. Although not a dramatic amount, it’s enough to start making a difference. It’s important that we are making strides to continue enabling and encouraging diversity, because at the end of the day it will help us all be more successful. I also believe the technology in our industry is becoming more exciting every day, and I think that is helping us attract younger generations to the industry.

What are your main goals and priorities for 2021?

In 2019, we launched a safety program called Live

Safe and we’re heavily focusing on that. Not only do we want our team members to live safely when they are on a project site, we want them safe when they’re home with their families as well. Our main goal every day is to make sure everybody goes home safely to their families. COVID-19 has stressed this goal even more.

We’re also trying to ensure that projects are kept in the pipeline. As we crossed into 2021, the level of new project activity has certainly increased, and we anticipate that will continue and possibly accelerate.

As a region, the Carolinas work well together and have good private-public partnerships. Rodgers has been fortunate to be part of several of these partnerships in Charlotte and Raleigh that have helped build and expand community culture. www.capitalanalyticsassociates.com

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Michael Byrd Regional Vice President and Division Manager Brasfield & Gorrie – Charlotte

What were the biggest challenges of 2020?

The world of construction changed dramatically in March 2020, as did everything else. Projects under construction were hit with various challenges. The main challenge was understanding COVID-19 and navigating what that meant for our company and projects. Our safety team, together with two infectious disease experts, worked to develop and share best practices for promoting hygiene and following recommendations from the Centers for Disease Control and Prevention, including those for social distancing and face coverings, on our job sites and in our offices. Examples of best practices being implemented across our job sites include limitations on the number of workers in hoists and elevators, heightened cleaning protocols, additional handwashing stations, and changes in break areas and food vendors, among other practices.

Despite all the challenges, we achieved our lowest recordable injury rate on record, and we are grateful to our field teams for their incredible dedication and hard work.

How has demand for work changed in the various sectors that you work in?

Healthcare is unique. Coming into 2020, there was a boom in healthcare. The pandemic has shifted healthcare priorities. As the industry responds to COVID-19, there are new services needed, so I think healthcare will continue to be strong.

Commercial construction office buildings have slowed slightly as people try to figure out what the new office environment will look like.

Industrial distribution, on the other hand, is on fire.

There are more manufacturing facilities being built.

Multifamily is big here in Charlotte. Several clients wanted to build hotels, but with hospitality affected by the pandemic, they’ve opted to build apartments instead.

There are numerous three- and four-story apartment buildings in development, along with mid-rise and highrise buildings. That market remains in demand.

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Despite social distancing and supply chain disruptions, construction leaders were able to navigate the COVID-related challenges.

( ) iron and steel, gypsum, concrete blocks and bricks — all witnessed a significant cost increase, with the possible exception of glass, which remained relatively stable in the 19-year interval analyzed. A JLL outlook report showed continued rising material costs between December 2019 and December 2020, with a whopping 36.1% increase in lumber and plywood costs, a 20% rise in copper and brass mill shapes and a 6% hike in plastic construction products.

On the labor side, and in Charlotte specifically, preCOVID, hourly construction worker wages remained in line with the Southeast average ($20.51/hour) and below the national average ($24.65/hour), standing at $20.28/hour.

The silver lining is the emergence and increasing adoption of construction innovations, such as prefabrication, cross laminating timber, GPS, 360-degree cameras and virtual reality, which are poised to increase productivity at the job site, hence

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reducing costs and time frames across construction projects.

Challenges In a nod to the unprecedented experience of 2020, LBMC’s Business Outlook Report 2021 identified the COVID-19 pandemic (47.7%) as the leading concern of the U.S. construction industry. Those concerns linger as companies have had to focus on new worksite requirements like social distancing, remote working, longer lead times and delays in receiving materials and even outright delays in projects, all of which applied in the Charlotte MSA. As developments unfolded, it often became a matter of expecting the unexpected as uncertainty became the industry buzzword. “When the pandemic hit nobody really knew what to expect.

We were coming off our best year ever in 2019. We had a great backlog coming into 2020 but no one has a pandemic written into their business plan. Our office projects were the first to be significantly impacted and almost immediately we had four or five very large office projects go on hold or be canceled altogether,” said Tripp Beacham, managing principal at BB&M, in an interview with Invest:.

Rounding out the Top 3 concerns in the LBMC report were materials, supplies and equipment costs (29.5%) and employee and benefits costs (29.5%). UNC Charlotte’s 2020 State of Housing in Charlotte Report also painted a costly picture of rising land costs, which are likely to create a drive for more densified assets, meaning the possible construction of taller buildings with an increasing number of floors to accommodate

Wes Jones Managing Principal, Charlotte Regional Office – Progressive AE

I’m bullish about Charlotte. I’ve been here since 1995, founded a firm in 2003, and I have always been confident about the future of our city. When I think about Charlotte’s outlook it’s hard to not see it through the eyes of our business, and what I’m seeing is a huge need for multifamily housing units. That need speaks to people’s desire to live here, to move here, and to continue to be a part of an urban center.

My hope is that once the vaccine for COVID has been rolled out, we’ll be able to fully return to the vibrant Charlotte we know and love. While some things will likely change, the future of Charlotte is bright, and I wouldn’t want to live anywhere else.

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Mark Dent Vice President & General Manager Turner

What notable projects did Turner work on in Charlotte in 2020?

Turner’s Charlotte office is one of 46 offices operating in North America. Our notable Charlotte projects completed in 2020 were the Charlotte Mecklenburg Police Department Independence Division Station, Charlotte Mecklenburg Schools’ Collinswood Language Academy, and the Piedmont Natural Gas Test Kitchen.

Charlotte-area projects currently in progress are the Honeywell Headquarters Interior Buildout, Charlotte Mecklenburg Schools’ East Mecklenburg High School Renovation and Addition, Duke Energy’s Maiden Transmission Operations Center, and the Union County Sheriff’s Office.

How have you had to re-strategize your supplychain management?

With Turner’s large footprint, we have layered connections with manufacturing companies across the country and internationally. This has allowed us to stay in front of any schedule delays or delivery issues and manage the situation accordingly. There were challenges but we were able to shift our strategy when necessary, and before any disruption to the supply chain became an issue. Born from the lessons learned of 2020 and even previous years, Turner has created SourceBlue, which is a combination of our established national procurement, global sourcing and logistics programs. SourceBlue has streamlined the efforts of our supply chain experts to manage all aspects of buying, expediting and tracking deliveries, facilitating warranty issues, and managing closeout.

Which sectors are driving demand?

The most active sectors in the Charlotte area right now are commercial development, healthcare, public sector projects, aviation and data centers. The developerdriven market is still very powerful, and a lot of that is due to the increasing number of companies moving to Charlotte or looking for new office space.

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The labeling of construction as an essential industry was a key victory for the sector in 2020.

the demographic growth. For traditional houses, it will drive subdivisions with smaller parcels. The average lot price and price per acre for residential lots in the Charlotte MSA has increased from $42,146 and $189,914 respectively in 2005 to $68,969 and $328,517 in 2018. That is a 64% and 73% increase in the last 13 years, and the upward trend continues.

In addition to costs, Charlotte’s builders also faced material shortages in 2020. On the lumber front, for instance, prices have climbed 110 percent since mid-April 2020. The shortage is due to the perfect storm of COVID-mandated lumber mill shutdowns, rising demand from a strong housing market, the decimation of British Columbia’s forest at the teeth of mountain pine beetles and past massive wildfires, according to the Charlotte Ledger.

From a regulatory standpoint, local, state and federal amendments to construction rules sometimes lead to barriers for new construction in the Queen City.

Depending on the complexity of the project, it can take anywhere between three to six months to obtain planning approval. As is known with any infrastructure or real estate project, time is the enemy in avoiding added, unforeseen costs. The good news is that there have been a series of initiatives to encourage and expedite

CONSTRUCTION & INFRASTRUCTURE OVERVIEW

new construction, as was the case in 2019 when the Charlotte city council approved new zoning rules for transit-oriented development near Blue Line light rail stations. The new rules enabled increased density and extra height for developers looking to build there, including affordable housing. Other initiatives are in the works. One plan relates to scraping single-familyonly zoning, which represents 84% of Charlotte’s neighborhoods.

The seismic shift inherent to COVID-19 has sparked creativity and innovation when it comes to injecting added resilience and efficiency to the construction industry to contribute to the Queen City’s overall rebound. Case in point, Cousins Properties Inc. took advantage of the initial economic uncertainty surrounding the pandemic to inject capital into Charlotte’s South End, including the acquisition of the RailYard for $201 million and two land sites totalling 5.6 acres.

Technology and sustainability Gargantuan challenges such as those posed by the pandemic usually spark equally disruptive ingenuity to counter them. The construction industry across the United States rose to the challenge, drawing from its seemingly boundless innovation well. The industry became a trend-setter for new technologies, processes and practices that are likely to remain and thrive in the post-pandemic landscape.

Linchpin provided a glimpse of these new trends, compiling those that represent the most significant disruptions: modular construction, 3D printing, sustainability, exoskeletons, robotics, and costtrimming technologies.

Single-familyonly house zoning represents 84% of Charlotte’s neighborhoods

Although the full extent of COVID-19’s impact on the energy sector is yet to be determined, the International Renewable Energy Agency (IRENA) registered decreased energy demand, energy price dips and a marked fall in oil prices. What is more, the agency reports that the renewable energy portion of power generation has grown in the global energy mix, despite the oil price slump.

One year into the pandemic, resilience echoes sustainability, and the construction industry is no exception to the rule. Construction players will have a pivotal role to play, not only in the use of sustainable materials, but also producing innovative designs that enable improved air circulation, bolstered insulation for temperature control and harnessing natural light, integrating energy efficiency devices and, when possible, integrating solar PV panels to enable renewable energy consumption.

Capitalizing on the sustainability momentum

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within the industry, the North Carolina Clean Energy Business Alliance and South Carolina Solar Business Alliance have merged to create the Carolinas Clean Energy Business Association in an effort toward streamlined advocacy and bringing North Carolina up to speed with South Carolina’s aggressive regulatory changes that enable competitive solar bidding, utility construction plans and power market reforms. On Feb. 24, 2021, Duke Energy Renewables, a subsidiary of Duke Energy Carolinas, reached a new milestone by breaking ground on a 50MW solar park, the Broad River Solar project, in Cleveland County. It will be the first renewable energy generation asset to sell power to its own parent company, Duke Energy Carolinas.

The icing on the renewable cake that is a testament to the Queen City’s commitment to its energy transition is the signing by Duke Energy of power-purchase agreements with 11 solar park developments, close to 600MW of new installed capacity and close to $1 billion in solar construction toward 2026.

Opportunity Zones Mecklenburg County counts 17 Opportunity Zones (OZ), more than any other county in North Carolina, creating several different parcels of land in dire need of investment. They offer an opportunity for commercial real estate development as well as housing to accommodate the area’s booming demographics.

The interest is apparent: in February 2021, Grubb Properties launched several OZ funds and raised $200 million despite the pandemic for its 10.5 acres aimed at developing a 400-unit multifamily project.

Local communities, however, are raising concerns

3D printing, sustainability, exoskeletons and robotics are among the major cost-trimming technologies driving construction innovation.

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witnessed tighter underwriting, a higher cost of capital and more limited options to finance their construction projects. In contrast to the 2008-9 downturn, however, the financial regulatory framework is now much stricter, so much so that the Fed relied on severely reduced rates and flexibilizations in Federal regulations to encourage businesses to spend their guarded capital.

With some construction projects halted, banks have witnessed an increase in defaults on construction loans. Nationally, construction loan delinquencies increased 23.8% in 1Q20 compared to 1Q19, as reported in a Standard & Poor’s Global Market Intelligence Report. To remedy this, the $2.2 trillion CARES Act allowed for an easy modification of construction loans. Its provisions establish that an owner can qualify for a forbearance arrangement, an interest rate modification or a revised repayment plan. The CARES Act also establishes that any loan modification does not constitute a reportable Troubled Debt Restructuring (TDR) or a default, avoiding a negative impact on the borrower’s credit rating.

over the impact from new developments on renters.

The Queen City’s OZ are located in some of the city’s most affordable places to live and own a business, while Charlotte’s growth spurt is also fueling fears over the possibility of gentrification and displaced residents.

Developers, community leaders and local officials are working together to ensure all stakeholders are satisfied with the outcomes of the projects sprouting across the county’s OZ landscape.

Financing trends As is to be expected in the uncertain environment of the COVID-19 pandemic, financial lenders have demonstrated strong risk aversion and a wait-and-see attitude. Moreover, overleveraged stakeholders also paused their projects as the risk inherent to keeping them going outweighed the benefits. Project sponsors

Residential trends Pre-COVID, the Charlotte metro area’s residential construction pace was such that it ranked 10th in permits for multifamily development, ranking Mecklenburg County third across the United States in that category. In September 2019, there were 12,000 apartment units under construction in the Queen City alone, with an added 8,000 in the pipeline.

Looking toward 2021, Realtor.com ranked Charlotte third among the country’s housing markets due to the projected growth in both home sales and prices. It is expected to be the strongest among the 100 largest U.S. metros. The report considers there will be three key drivers that will keep injecting steam into the sector’s performance: millennial homebuyers, affordability and a strong local economy.

Significant rezoning efforts have also been made to accommodate the construction of new residential assets for the Queen City. Developer HHHunt obtained approval for a rezoning petition in late 2019 to develop up to 308 apartments — 5% of which will be allotted to workforce housing — on a 26.7 acre parcel. In tandem, a 280-apartment project was approved. Plans for a new complex mixing 92 duplexes, triplexes and singlefamily homes for sale were also approved.

Most significantly, a populated list of developers including Wood Partners, Grubb Properties and Thompson Thrift were in the process of obtaining rezoning approvals to greenlight vertical ( ) www.capitalanalyticsassociates.com

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®

oundtable:

Architecture Leading firms discuss the highlights and milestones of the past year

Tripp Beacham Managing Principal BB&M

How did 2020 play out for BB&M? When the pandemic hit nobody really knew what to expect. We were coming off our best year ever in 2019.

We had a great backlog coming into 2020 but no one has a pandemic written into their business plan. Our office projects were the first to be significantly impacted and almost immediately we had four or five very large office projects go on hold or canceled altogether. We were opening a few multifamily projects at the same time, and there were big concerns there as well since new leasing activity ground to a crawl. Even as leasing was slowing on newly completed projects, we were surprised that our new multifamily work not only was stable, it was accelerating. Our senior living work also began to get some traction and our adaptive reuse projects and interior design thankfully remained stable as well. Strangely, the net result of the new work meant we continued to hire pretty aggressively throughout the pandemic.

What is your approach when tackling the multifamily sector?

We’ve been doing multifamily projects for a long time Demand continues to be strong, particularly in our sweet spot, which is urban infill projects. They are complicated projects architecturally and from a construction standpoint.

They are among the most difficult to design because of the mix of construction types. There are surprisingly few firms in North Carolina that excel at these very complicated infill projects that have structured parking, mixed construction and mixed use. Our experience in these types of projects has served us well as Charlotte has grown and the sites get more complex.

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John Gaulden

Co-Managing Director & Principal Gensler – Charlotte

What was a highlight for the firm in 2020?

Our firm is a research-oriented organization that is constantly studying the workplace and finding ways to help our clients. That research came to the very forefront early in the pandemic, midway through and certainly now as firms are trying to navigate what to do with their space and return to the office safely.

We’ve been asked a lot of questions over the last eight months: How do I protect my business and how do I protect my people and how do I do those two things in a safe way? How do I grow my business? One of the things we’ve really encouraged clients to do is to learn about the pandemic. Don’t think you’re just going to come back and things are going to be exactly as it was before. Instead, use this time to understand your business better, to look at patterns to understand how people are currently working and calibrating. Look at the things that you might be surprised at in a positive way so that you can then build upon that and have a stronger culture when you come back.

What is your outlook for 2021?

For us in 2021, we’re always going to be about the safety of our employees and continued service to our clients. We’ve proven that we’re really effective working together virtually and delivering great designs to our clients. Where we’re going next, I can’t tell you fully, but I can tell you that we’re very excited about the possibilities in 2021. We have a lot of people coming to us asking questions about what the future looks like. We kind of now feel we have a handle on the end game regarding this pandemic.

CONSTRUCTION & INFRASTRUCTURE ROUNDTABLE

Zena Howard

Principal & Managing Director, North Carolina Perkins&Will

What were the key highlights for Perkins&Will’s Charlotte office in the past year?

In 2020, we relocated our Charlotte studio within Uptown. Our Charlotte project pipeline is quite notable, including the new Truist Bank HQ and the Charlotte Douglas International Airport. We are also working with American Express on some of their lounges inside CDIA. What is your take on the future of workplace 2.0?

The big change lies in the notion of maximum density floor planning, where you max out the density to what the code requires. Some office spaces were putting people 32 to 36 inches apart. Unequivocally, that maximum density floor planning is on its way out. There is a strong emphasis on healthy workspaces, more so than ever, leaning toward connection to colleagues, nurturing the company culture and embodying its brand.

What near-term opportunities do you expect to arise?

We are looking at creating a hub-and-spoke model between Uptown and the surrounding areas, such as South End, North Davidson, and the suburbs. At the moment, there is active discourse about cities, in terms of development. Large urban centers, such as New York, may not have the same draw post-COVID. Some people will continue working remotely because of lengthy commutes that require multiple modes of transportation. There are also ongoing conversations around buildings, creating development towers that include commercial, retail, living greenspace, all within one structure. It embodies a more resilient approach against disruptors such as the pandemic.

Tim O’Brien

Studio Manager LaBella Associates

What have been your milestones over the past year?

I would say that a significant one was when we broke the $150 million mark for revenue. For a company that started about 10 years ago tucked away in Rochester, New York, to have a full national presence and crest that $150 million mark was a wonderful thing. As far as the pandemic goes, we managed the situation by being very flexible. We had the benefit of already having a good IT infrastructure in place and we were able to work securely coming out of the gate. We have about 1,200 staff now who had to pivot very quickly to working virtually. I have to applaud the discipline of our staff because we had an incredible year and we were able to keep the business running as well as could be hoped.

What is your outlook for engineering and construction in Charlotte over the next 12 to 18 months?

We are very bullish. We think there is a fair amount of pent-up demand. A lot of things did not get launched last year among all the uncertainty and we’re finding that some of those projects are getting the green light now, in addition to what would have been the 2021 workload.

Couple that with some exodus from the Northeast to the Southeast and it’s looking good. It continues to feel like a prosperous community. ‘Charlotte has made a seismic shift from being a banking community to now having its own culture and vibe. It’s a great place to be. The business community has certainly become increasingly diverse. We’ve seen a rise in the tech workforce — the creativity is bursting at the seams. For LaBella Associates, we’re looking forward to significantly growing our presence in the Southeast. www.capitalanalyticsassociates.com

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CONSTRUCTION & INFRASTRUCTURE INTERVIEW

Data-driven The use of data science in construction is rare but it can make companies nimbler in challenging times

Zach Pannier Business Unit Leader – DPR Construction DPR is on our way to becoming a $7 billion company with 7,000 employees. It is critical to equip ourselves with the capability to manage our supply chain at that size and scale so that we have influence in our local markets. We’re fortunate that we were in the right place, at the right time, with the right strategy in place to turn the volume up leading into 2020. Part of it was having a vision and a great team to execute on it and also being able to mobilize projects quickly so we could adapt and evolve in sync with what was happening in the world.

How did DPR Construction adapt ?

Like many organizations that were faced with immense change this past year, we’ve realized how people have embraced the need to adapt and evolve. The fact that the pandemic aligned with our 10-year strategic planning process was significant happenstance. A key component to our plan is the amplification of data to drive continuous improvement. A construction company employing data scientists is a real shift for us and we are a nimbler business as a result. We are using data for everything from accounts receivables to identifying stressors within our customers ecosystems that impact our business. This type of intelligence is not just about protecting our business; it’s about engaging and navigating these challenging times with our customers.

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How will COVID-19 impact the already tight labor market?

The outlook in the labor market continues to be tied to workforce diversity and development. We have partnered with Goodwill, She Built This City, The ROC, Potions & Pixels and other non-profits to match their apprentice programs with opportunities with careers in construction. This is an intentional effort to grow our workforce. We are also working strategically to expand our community impact with customers like Atrium Health. We just leased a large warehouse between the main campus of the Atrium Health Carolinas Medical Center and the Charlotte-Mecklenburg Airport for localized pre-fabrication purposes. And, particularly rewarding is how we are reaching younger females and teaching them about construction while they are in grade school. In addition to She Built This City, DPR is actively working with local non-profits including Girls Rock Charlotte and the ACE Mentor Program. The past two years, we’ve recruited female interns through The ROC, a program that provides youth with construction trade training, opportunities for construction jobs after high school, and college credits.

CONSTRUCTION & INFRASTRUCTURE OVERVIEW

Perspectives: Challenges Chris Frye Co-Founder & Partner – Barringer Construction

The most challenging supply disruptions during the pandemic have been the lack of manpower, followed by the shortage of material availability. We put a strong focus on following the CDC’s quarantine recommendations which often resulted in trade partners not being able to come to project jobsites. We had to be extremely nimble at the project level. If a project needed to be shut down and cleaned, we were honest with the client and we did what needed to be done. Avoiding the potential for outbreaks had to become priority number one.

Andrew Moriarty Managing Principal, Carolinas – Bohler

Trade development programs designed in conjunction with community colleges will help meet demand for a skilled workforce.

( ) developments. Collectively, the list of household names is committed to delivering hundreds of apartments, adding to the 40,000 apartments that have come online in the region since 2015.

“We’ve been doing multifamily projects for a long time now, but it has been really intensive for the last seven to eight years,” said BB&M’s Beacham. “I think every single year we hear our friends who are generally not in multifamily development asking, when is this run going to end? How can we build so many apartments and have the rents keep going up? Land prices continue to escalate and material and labor prices are out of control. It’s the story of Charlotte really, and some of these cities like Nashville, Austin, Raleigh and similar places where people want to live and where businesses want to move. So, the demand continues to be strong, particularly in our sweet spot, which is urban infill projects.”

The stifling economic impact of the pandemic has made the Queen City’s urgent need for affordable housing stock even more critical. The urgency comes in a complex context of rising land costs, limited financial options, expensive materials and a talent shortage.

The investment that online retailers are making in some large facilities is pretty stunning as they are looking to consolidate their distribution operations at a heightened pace. The other industrial market component that is striking is pharmaceutical manufacturing, more so for us in the Triangle area. Getting the supply chains and having more products being made in the United States is being triggered by the episode that began back in March 2020. We anticipate the return of manufacturing within that industry to take on a more permanent shift.

Mike Shea Regional Vice President – Empire Homes and Communities

Prices are going up, municipalities are requiring more sidewalk and curb and gutter, and erosion control is increasing tremendously. We provide traffic impact analyses with road improvements but sometimes the municipality will request additional road improvements. As it adds up, solving the puzzle becomes more difficult, yet everybody wants builders to offer affordable housing. We would love to do it but achieving all of this without taking any grants or anything from the city is challenging.

Gray Shell Division President - Carolinas – TRI Pointe Homes

As we stand today, we’re looking at things like lumber supply issues, appliances and fixtures that we are having to deal with given the supply chain disruptions but, sitting here now, knowing where we started the year, it’s pretty phenomenal to see how the industry has performed.

Lumber prices have literally doubled from where they were in the spring. In terms of availability and pricing, we have started to see some relief but the material cost will continue to be an issue.

www.capitalanalyticsassociates.com

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CONSTRUCTION & INFRASTRUCTURE OVERVIEW

Construction leaders are closely monitoring supply chain issues and rising construction costs as part of the industry’s recovery process.

The silver lining is that the construction industry has not skipped a beat on the innovation and outside-thebox thinking that characterizes it. Creativity within the industry has produced modular construction, which has proven a viable option in the single-family and multifamily construction spaces. The idea is to capitalize on the benefits of factory-built, prefabricated building portions which, once assembled, are taken to the construction site and connected to the asset’s foundations. The methodology provides significant cost-savings as well as a shortened time frame between construction and inauguration.

Outside-the-box thinking could also include microcommunities, says Nicholas Donahue, CEO and cofounder of Atmos. “That’s going to become a trend in the near future. Recently, one of the co-founders of Casper and nine friends wanted to buy a huge plot of land in upstate New York and subdivide that to make it into a little community for them and their friends. And we’re currently working with three families that bought a plot of land that they’re subdividing between each family with a communal building they’ll all share. We think a lot more families 116

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and groups of friends are going to build these small, micro-villages,” Donahue said.

Commercial trends In its 3Q20 Industrial Charlotte report, Colliers evidenced a delivery slow down in the Queen City’s industrial space. It attributed the delay to the combination of market uncertainty and higher lumber and steel prices, causing developers to wait for commodity prices to come down to mitigate the unforeseen jolt in construction costs. Notwithstanding, Charlotte saw 4.29 million square feet of new warehouse construction and 145,500 square feet of flex assets, while it can expect an additional 3.85 million square feet under construction and 141,642 square feet of flex space.

COVID-19’s e-commerce surge has heightened the attractiveness of industrial assets, particularly in and around the Charlotte Douglas International Airport.

One example is Queen City commercial real estate firm Collett, which is taking on its very first industrial spec asset development project, Airport85 Business Center.

The center is a 154,920-square-foot spec industrial

CONSTRUCTION & INFRASTRUCTURE OVERCONSTRUCTION OVERVIEW VIEW

Keith Poettker President Poettker Construction

What opportunities and innovations have emerged for the industry?

Like every industry, Poettker had the communication tools, like Microsoft Teams and Zoom, in place, primarily using the basic features pre-pandemic.

When the pandemic abruptly hit, our team was forced to pivot and quickly utilize these tools to their full capability. These real-time collaboration tools have helped our team stay connected with each other and our clients and business partners.On the safety side, from a security perspective, I feel firms realized how many individuals were arriving at their workplaces and jobsites unannounced. With site security, badging and access-control protocols already in place, we utilized this opportunity to enhance these initiatives.

building, slated for 1Q22. Its design will include 32-foot clear heights and up to 32 dock doors.

Charlotte’s definitive insertion into the e-commerce game was made even more apparent when e-commerce royalty Amazon set its sights on yet another industrial location, Carolina Logistics Park. It is the latest move for the e-commerce giant in the consolidation of its Queen City footprint, which includes its 566,800-square-foot WestPark building, a 855,000-square-foot robotics fulfilment center and warehouse facilities in both Concord and Kannapolis. Another honorable mention includes Rock Hill Commerce Center. The two towering structures are part of a four-building project totalling 1 million square feet. The project is scheduled to come online in 4Q21.

Infrastructure North Carolina’s energy mix includes nuclear energy (34.25%); natural gas (33.65%); coal (16.78%); solar (7.21%); hydro (5.32%); biomass (1.96%); wind (0.44%); other fossil (0.39%) and oil (0.10%). According to the US Energy Information Administration, in 2019, North Carolina ranked second only to California

In which segments are you seeing the most demand during this time?

The distribution space, in terms of warehouses and business-to-consumer delivery centers, is showing significant demand, with online shopping and the logistics demands of transportation. Pharmaceutical is another area in high demand, pending the outcome at the federal level. If the federal government proceeds with a much-needed national infrastructure bill, any markets or trades impacted by that bill will obviously see high growth.

I envision continued growth for multifamily developments. Over the past year, as people have learned to work remotely, they have realized they don’t have to stay in a geographic location they don’t like just for work.

The Charlotte regional area has many great communities and should expect a wave of population growth as a result of the remote work environment.

The office space and mixed-use developments are going to take a couple of years to improve as clients figure out and understand the new normal: whether companies can live with remote work, how long the transition will be to bring employees back to the office, and what post-pandemic office space will look like. www.capitalanalyticsassociates.com

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in both the amount of total installed solar power generating capacity at almost 4,700MW and actual solar generation.

On the nuclear energy front, North Carolina ranked sixth nationally in electricity net generation from nuclear power in 2019, producing about 5% of the nation’s total. That same year, nuclear power claimed the top spot as the largest source of North Carolina’s electricity generation, surpassing natural gas to provide close to 32% of total in-state electricity.

In light of the pandemic’s effects on crude oil output and prices, combined with the Texas power outage crisis in February 2021, the COVID-19 resilience being built up in the Queen City’s economy should be reflected in its infrastructure as well. In February 2020, Charlotte made known its plan to power municipal buildings with zero-carbon energy by 2030. It is worth mentioning that North Carolina is among the 10 states with the lowest per capita petroleum use in the United States, although so too is its total annual expenditures for motor gasoline.

Ecosystem Charlotte’s public water and wastewater utility, Charlotte Water, enjoyed an approved operating budget of $461 million as of July 2020, of which $75 million was allocated to the Water Community Investment Plan and $235 million to the city’s Wastewater Community Investment Plan. In terms of wastewater, the Queen City’s infrastructure includes six wastewater treatment plants for a total plant capacity of 123.175 MGD. Regarding energy efficiency, North Carolina as a whole has greatly benefited from the powerful

North Carolina was the sixth-leading state in electricity net generation from nuclear power in 2019.

Ed Rose President & CEO – Shelco LLC

Most of our clients hit the pause button or the reset button, by which I mean to say, most of the projects on the drawing board pre-pandemic are still on the drawing board and clients have been reevaluating their scope. The challenges of the pandemic have affected aspects of building design — things like elevator transportation or going from a midrise building to a low-rise one.

Tenants are trying to decide how they are going to come out of this pandemic, gauging the reaction of their employees to these new notions of what a working space should look like. As developers, we need to wait for the tenants to reach such conclusions.

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CONSTRUCTION & INFRASTRUCTURE OVERVIEW

synergy between enabling local regulations and Duke Energy’s efforts. The Southern Alliance for Clean Energy found the state had achieved overall savings of 0.77% from its 2018 retail sales. By doing so, North Carolina is spearheading efforts on a national scale by positioning itself above the 0.71% national average.

North Carolina’s energy transition effort is missing a key player, however: wind energy. The state lacks installed wind power capacity. Yet, Environment North Carolina highlights the state’s coast has a tremendous offshore wind power capacity. The advocacy group’s research found that North Carolina’s coastal wind resource’s potential is higher than any other Atlantic Coast state. It estimates that with a fraction of the available resource, the state could meet up to 20% of its energy needs. What is more, according to the Department of Energy, the state has the potential to gain anywhere between 10,000 to 20,000 new offshore wind manufacturing jobs, a welcomed figure in a time of recovery and an expected rebound.

Looking ahead The Charlotte MSA is rising to the challenge of added layers of complexity, which its construction industry is adamant on cutting through on the road toward extending its growth boom. On the one hand, Charlotte is dealing with increased materials costs, rising construction and land prices and a prevalent talent shortage. On the other, the demographic inflow, new technologies driving cost-efficiency and productivity as well as a diversified landscape of thriving industries is paving the way for a continuously prosperous construction sector going forward.

David Harker CEO & Founder Harker

How have you tackled the development of closedspace projects in this new environment?

For a firm that specializes in corporate interiors, the pandemic has been a blessing from a work perspective and actually getting it done. We have seen an uptick in capital improvement projects from institutional landlords, where they are looking more at developing spec suites, which are more cost-competitive. The majority of the buildings that we work in are occupied by companies that have sent the lion’s share of their people home, so we are not bound to do the work at night as the buildings remain empty. We were also able to take in PPP resources when they were first made available, which endeared us to our team and provided a great opportunity to get up on the mic in front our company to let everyone know from a piece of mind perspective that we had an additional $1 million in the bank, spreading a sense of relief as we continued to have a successful 2020. We quickly realized that we did not need the PPP loan and refunded it a couple of weeks after we got it.

How have you adapted to supply chain challenges?

One of the challenges we face is that our projects are highly fast-paced. The biggest leed-time or supply chain issue we have seen is in appliances. It is taking exponentially longer to source appliance packages on projects. Besides that, we really have not seen much of an impact. Light fixtures were an issue because for every one light there are a thousand others you can source. It has added another level of effort on our part.

One of the things we have noticed is that the expectation for delivery on projects has almost increased post- or during COVID than pre-COVID. The communication uptick has been intense and the amount of time we are given to respond seems to have shortened. The attention to detail and expectation for delivery has added pressure because in our capacity as contractors we are dealing with COVID-19 too.

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Constant communication with clients and project updates are among the keys to success for construction firms.

Skyrocketing costs: NAHB pleads for action In addition to a shortage of labor, the biggest challenge facing the construction industry is the cost of materials. With prices already on the rise prepandemic, COVID-19 only exacerbated the problem, given heightened supply and demand constraints.

These higher costs not only impact builders but homebuyers and other investors, who end up seeing the bulging expenses in the purchase price of their properties. The spike in lumber prices alone has led to an increase of more than $24,000 on the purchase of an average, new single-family home, according to the National Association of Home Builders (NAHB).

The association adds that multifamily properties are seeing an additional $9,000 on the purchase price since April 2020. The NAHB also points out that the higher costs threaten housing affordability.

In mid-March 2021, the NAHB sent a letter to U.S. Department of Commerce Secretary Gina Raimondo seeking action on the issue of rising lumber prices.

CONSTRUCTION & INFRASTRUCTURE ANALYSIS

The NAHB letter, with 36 related signatories, highlights that since April 2020:

5-year price trend of Lumber on the Nasdaq commodities market (April 26, 2021): 1200

• Lumber prices have more than tripled • Oriented strand board (OSB) prices are up more than 250%

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• Additional cost to build an average new singlefamily home: +$24,000 • Additional cost to build a multifamily unit: +$9,000

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• Lumber, and engineered wood products like OSB are large components of residential and commercial remodeling projects, such as hospitals, schools, offices and restaurants

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• The Random Lengths Framing Composite Price surpassed $1,000 mark on Feb. 23. The prepandemic record high was $582

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• Building 1,000 average single-family homes creates 2,900 full-time jobs and generates $110.91 million in taxes and revenue for local, state and federal government.

Source: Nasdaq

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Banking & Finance: The Charlotte region is an established banking and finance hub, second only to New York City. Dominant commercial heavyweights, entrenched community lenders and a burgeoning fintech environment ensure a resilient industry that is primed for further growth.

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Critical role: From PPP loans to digitalization, the banking and finance industry has been front and center during the pandemic The banking and finance sector in the Charlotte MSA excelled during the pandemic storm in 2020 and early 2021, underpinning its status as a key player in an economy that continues to gravitate toward diversification. Providing key support to local businesses through its handling of the Payment Protection Program (PPP) loans, while embracing the technological trends accelerated by COVID-19, the banking and finance sector rose to the occasion in the past year, and proved it was ready for the future.

Looking at the lay of the land, Charlotte is the second-largest banking center in the United States by assets, behind only New York City. Not only is the region home to the second-largest bank in the country — Bank of America (BofA) — but NewDominion Bank, Carolina Premier Bank and Truist, the $66 billion merger of equals between BB&T and SunTrust to create the nation’s sixth-largest bank, also call Charlotte home.

For the last 20 years, the Charlotte-ConcordGastonia region also has consistently outpaced the national average percentage growth in financial sector employment. Pre-pandemic, the U.S. Bureau of Labor Statistics reported the region’s financial employment 124

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had increased 47.4% since 2000, compared to 11.7% nationally. In the Charlotte region alone, 82,000 people work in the finance and insurance industry.

The region’s banking ecosystem, encompassing access to fintech, data science and education programs, is often cited as the common denominator that allowed Charlotte to claim its status as a banking magnet. As the Charlotte Regional Business Alliance stresses, with 2.5 million people in the Charlotte metropolitan area and 25 colleges and universities, the region has the ability to leverage human and intellectual capital to ensure long-term growth.

Sector performance The Charlotte region has emerged buoyant from the winning trifecta of thoughtful planning, resilient industries and sheer momentum. After the 2008-09 crisis, city leaders laid the groundwork for growth with strategic investments in infrastructure, transportation and core businesses. There was a significant pool of available talent after the financial crisis that bolstered the area’s attractiveness. Charlotte is now home to innovative and growth-oriented companies across a diversified array of high-added-value sectors, ( )

BANKING & FINANCE INTERVIEW

On track Merger progress continues unabated with core bank conversion expected to be completed in the first half of 2022

Heath Campbell President, Charlotte Metrolina Region – Truist

How did the integration process from the merger progress in 2020, given the pandemic?

When we speak about the pandemic, I think the first thing we need to keep in mind is the widespread impact it has had on individuals, institutions and businesses in our community. Our hearts and prayers go out to all those and their families who have lost someone, as well as those whose livelihoods have been challenged.

In terms of Truist, we’re on track to complete our core bank conversion in the first half of 2022. At that time, clients will see all of our branches, signs, products and services change over to Truist, and we’re committed to creating a smooth transition for them. We had our first client-facing conversion in August with Truist Securities and it went very well – even in a virtual environment.

Our clients were very happy with how the process went, and that’s a good sign of things to come.

There are 29,000 small businesses in CharlotteMecklenburg, representing 40% of the jobs in the community. Many of these businesses are continuing to cope with a very challenging environment. We’re extremely proud of our role as one of the most active PPP lenders in the country to support our clients during this unprecedented time. In addition to other types of relief, we mobilized thousands of teammates to process PPP applications and provide urgent capital to our clients when they needed us most.

How are you balancing an online presence with the branch network?

To me, the local presence of an organization is just as critical for the future as it is today. Our branches will always be an important bridge for us to build relationships, meet our clients’ needs, and contribute to our communities. But like many industries, we’re seeing our client preferences and behaviors change as

more and more clients choose to bank with us digitally.

This trend has accelerated even more due to COVID-19.

How does the recent sale of the investment advisory services reflect the moves the bank is making?

The institutional 401(k) industry has experienced significant consolidation, and the purchasers are wellpositioned to provide scale and expertise for our plan sponsor clients and their plan participants. While we divested those services, we are also continuing to focus on growth opportunities and making strategic investments in key areas. For instance, we’ve recently made several insurance acquisitions which complement our strengths in that area. We will continue deploying our capital in areas that give us competitive advantages and allow us to provide clients with the services they want and need. www.capitalanalyticsassociates.com

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Weston Andress Regional President for Western Carolinas PNC

What have been your major takeaways from the federal relief packages?

We think it was critically important to get stimulus money distributed, particularly to small businesses.

Large corporations with large balance sheets could access the capital markets, which remained open, as well as large, syndicated lines of credit. When you get down to the smaller players, whatever sector they are in, that is where the real hurt has been. The CARES Act, and the Paycheck Protection Program specifically, came at the right time for small businesses. There is still significant hurt out there in the local economy, and there are several businesses on the edge.

How is PNC rethinking its future and that of Charlotte’s banking sector?

We have learned that technology is going to be a driver for the future. Banking companies have truly become technology companies in many ways. That is going to be a critical component going forward.

Financial institutions are going to have to invest in quality technology to compete in this environment.

The other part of the future is talent. There is a war for talent in the banking sector that is going to continue.

The industry needs highly capable banking talent to manage the technology and client relationships. That is why there is such a migration flow toward Charlotte, because not only is it an attractive place to live, but you also have an attractive pool of talent to fill your ranks.

The banking landscape is becoming increasingly crowded in Charlotte, but PNC has been in business for over 160 years. Part of the reason for our long period of success is our consistency and looking after our customers and investing in the communities we serve. Our model has worked quite well here.

We are big enough to be able to afford to invest in our business, but we are not so big that we cannot develop personal relationships. It is our main strength here and will continue to be so.

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( ) including energy, financial services, healthcare, manufacturing, automotive and commercial development.

Every month, an average of 700 families with $250,000 or more in investable assets, residential needs and small businesses move to Charlotte. This positive demographic trend unlocks significant growth opportunities for the city’s financial entities.

It has also jolted Charlotte’s financial ecosystem into growing a thriving fintech and startup environment that in turn fosters the Queen City’s growth, serving as a magnet for skilled talent and subsequently companies interested in absorbing that talent.

Charlotte’s top three banks alone — Bank of America, Truist Financial Corp and Wells Fargo & Co — represent 93% of total market share. By June 2020, all three had reported a cumulated $318.7 billion in local deposits and $4.4 trillion in assets, despite the pandemic.

As it became clear that the pandemic would be a long-term issue, banking players focused their

Truist Financial Corp’s 2019 decision to headquarter in Charlotte further solidified the region as a major banking hub.

BANKING & FINANCE OVERVIEW

Andrew Lindner Co-Founding Partner – Frontier Growth The productivity that can be achieved virtually is shocking to me, be it for our firm, our portfolio companies, or our ecosystem.

The pause triggered by COVID gave us a rare opportunity to look inward and think about the next step in the growth and evolution of our firm. The biggest surprise for us is how resilient our economy and the software business models are. If you’re backing companies that have truly mission-critical, hard ROI solutions, it’s incredible how durable those have been. We expected some of these companies to be flat and they just have not. As a 22-year-old firm, we’ve been through a few downturns and the adage holds true: the time to buy is when there is blood in the streets, even if it’s your own. Big periods of dislocation such as the pandemic unlocks incredible amounts of opportunity that people miss.

efforts on the transition toward the digital space, accelerating their technology adoption by several years, galvanized by the willingness of users to rely more on their mobile and online tools for their banking operations. For the more complex financial needs of their customers, banks relied on CDC guidelines to ensure safe environments at their respective brickand-mortar branches that remained open. Case in point, BofA installed more than 33,000 clear barriers, enhanced cleaning twice a day and placed socialdistancing markers in all of its branches. But the move to digital was clear. By November 2020, 75% of Fifth Third’s consumer transactions were digital, showcasing a 20% spike compared to pre-pandemic figures.

On the mortgage front, 2020’s historically low interest rates boosted new loan and refinancing applications. Movement Mortgage grew from $17 billion in lending in 2019 to $30 billion in 2020; American Security Mortgage Corp doubled its 2019 $2 billion loan volume; Wyndham Capital Mortgage grew loan volume by 150% in 2020 and close to tripled its $2 billion record in home loans of 2019 to reach $5.5 billion in 2020.

Considering the Federal Reserve has signaled that interest rates will remain low for the foreseeable future, Charlotte’s lending activity is poised to continue apace throughout 2021, building on its 2020 performance. In this environment, it is likely that banks will further tighten their lending standards www.capitalanalyticsassociates.com

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BANKING & FINANCE OVERVIEW

Claudie Johnson Charlotte City Executive – Self-Help Credit Union

Self-Help Credit Union bought Greater Piedmont, a smaller credit union that had a presence here in Charlotte, with an office in Pineville and another in Durham. The credit union then bought an old Wells Fargo branch in the Myers Park community. In April last year, when I was coming onboard, we decided to grow our Charlotte presence, so we relocated the Pineville branch to the Myers Park community.

Self-Help is not new to Charlotte. We own a piece of real estate here, the Great Aunt Stella Center in Downtown Charlotte, where we used to have a production office of a sort. We’ve done mortgages here and we’ve done small-business lending since the 1980s, but this is our first retail branch in the city.

BofA beat expectations in 4Q20, reporting 59 cents per share despite a drop in revenue to map out safe from risky borrowers and ensure repayment capacity.

Top banks Taking a look at how the top banks in Charlotte fared throughout the pandemic indicates the pulse of the region’s banking sector, considering the Top 3 represent a 93% market share.

Truist Bank was officially born on Dec. 7, 2019, after one of the largest M&A deals of the past decade. As COVID progressed, Truist provided temporary relief on payments and fees to some of its clients while building up its reserves. The bank had to simultaneously manage the successful conclusion of the merger while navigating the ripple effects of the pandemic.

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community, the bank pledged a $60 billion, three-year commitment to support low- to moderate-income communities, as well as a $40 million donation in September 2020 to create CornerSquare Community Capital as a new resource for the Community Development Financial Institution (CDFI) to assist diverse and women-owned businesses. Moreover, it established Truist Cares, a $50 million initiative destined to COVID-19 relief. A key topic for the future of Charlotte, Truist invested $47 million in local affordable housing. Going forward, the bank is looking to center all of its efforts toward integration in 2021.

It committed to $1.6 billion in net cost savings by the end of 2022. The bank reported earnings per diluted common share of 90 cents in 4Q20. On an adjusted basis, Truist reported diluted earnings per share of $1.18, up 21 cents per share compared to third quarter 2020. Adjusted net income was a record $1.6 billion.

BofA experienced a 10% drop in revenue in 4Q20, from $22.3 billion in 4Q19 to $20.1 billion, as well as a 35% net income crunch from $27.4 billion in 4Q19 to $17.9 billion in 4Q20. However, BofA performed better than expected by analysts on a per share basis, coming in at 59 cents versus a 55-cent forecast. Like many banks, BofA poured billions into its reserves to mitigate risk from the pandemic, suggesting that it is primed for growth ahead.

The Queen City’s community banks tackled the pandemic on a variety of fronts while lacking the scale and resources of Charlotte’s household-name commercial banks. COVID-19-mitigation measures ( )

®

oundtable:

Sector landscape Leading bankers discuss their strategies and key areas of business, while also touching on their goals moving forward.

Kendall Alley

Regional Bank President Wells Fargo

What are your considerations for the commercial real estate lending side of the business?

Most of Wells Fargo’s employees haven’t been in our offices since the pandemic hit, and we’re in the process of rethinking and reevaluating how we utilize our real estate space when things return to normal. We made loans to companies that are also learning lessons from the pandemic. Those who believe in the power of having their teams together will need more real estate space, while those that best execute on a remote basis may not need as much space going forward. What we’re seeing is that companies are evolving and we will have an assortment of options in terms of how things can be executed. Workspaces are going to be changed going forward based on what we have learned about the COVID environment. From a risk management and cash flow perspective, that is going to give positives or negatives to a deal based on what a company’s individual needs are.

How have you bolstered your investment banking strategy?

We are the fourth-biggest bank in the United States and we have been a consistently strong lender to the middle market. We’ve had an investment bank at Wells Fargo since our merger in 2009 with legacy Wachovia, and our view has always been that we can do more to serve our clients with these capabilities and we can do so in a manner that is careful, strategic and always measured from a risk and balance sheet perspective. Our strategy within our corporate and investment banking business is to be the best in our chosen businesses and take advantage of our strengths 130

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Brent Gore

Head of Commercial Banking, Carolinas Region JPMorgan Chase

What are the advantages of operating in Charlotte?

Charlotte is a regional hub for us with a significant concentration of employees serving the Southeast. It’s a vibrant, growing and dynamic market. As businesses grow to meet the demands of the city’s growing population, we have the ability and expertise to help them grow wisely, manage their capital and improve their competitive position in the market.

How can the financial sector come together to help underbanked communities access affordable capital?

Access to banking is crucial, and it is one of our key priorities. It’s one of the reasons why we are aggressively opening new branches in Charlotte and elsewhere, including in areas that were previously “banking deserts.” We want our branches to be close to home and accessible for everyone. In addition, training and financial education must go hand in hand with increased access, because both consumers and businesses must understand the lending process and feel comfortable engaging in the banking system. We have a robust virtual financial education program called Chase Chats that focuses on consumer finance as well as business topics.

What are the firm’s main priorities in North Carolina?

Our investment in North Carolina is part of a longterm strategy that will not be affected by short-term developments. We’ve actually been here since 2006, but began opening retail branches last year. We plan to continue to grow and build in the Carolinas. We had a strong year in 2020, and we are confident that the momentum will continue.

BANKING & FINANCE ROUNDTABLE

Blaine Jackson

Charlotte Division President Park National Bank

What is the vision behind the decision to rebrand the bank’s 12 brands under the Park National Bank name?

The bank is over 100 years old, so changing something like that is difficult, and you feel like you’re moving mountains. When we joined Park, about three years ago, there were no conversations about rebranding. We knew we were joining the company as one out of 12 total brands, with most of those being in Ohio. The newest acquisitions were us in Charlotte and the Carolina Alliance Bank in other parts of North and South Carolina.

I originally liked operating under 12 different names because it allowed us to keep our heritage, autonomy and the local community bank feel that was important to Park. However, once we were in the fold, the reality is that it was confusing to have 12 separate brands which came with 12 separate websites. It confused clients.

What changes in consumer preferences are you experiencing?

There is a premium being placed on mobile and online.

We still believe that relationships matter and that they are best formed face-to-face; however, not everyone wants to meet face-to-face, they may just want to move to online banking. We allow customers to bank when and where it’s convenient for them. We meet them where they are. Our customer’s access to technology has improved with Park. Previously, as a small community bank, our resources were limited by what third parties could provide. Now that we’ve joined Park, we’ve been able to develop some things internally that are really focused on technology to help us elevate our game and take this 100-year-old bank to the next level.

Rick Manley

Mid-Atlantic President First Horizon Bank

What new products and services will you start to offer clients as you expand in the mid-Atlantic region?

We offer everything a large, national bank offers in the way of products and services and we deliver at a local level. We follow a decentralized business model featuring local market management, decisions and approvals. It’s a unique way to approach the market but ultimately successful.

How has your digital strategy changed since the arrival of the pandemic?

We’ve achieved more in our digital transformation in 12 months than we would have done in 10-15 years without the pandemic. We’ve completely automated our account-opening process, and we’ve noticed that our customers are increasingly seeking advice virtually rather than in person. We are now focused on how to use these digital tools in the most productive and proactive fashion to reach out and connect to our customers.

What are the bank’s goals for 2021?

We believe the second half of this year will see an acceleration based on some of the policies being implemented by the Biden administration. We will see inventory and investments from businesses into machinery and equipment as the pandemic takes its place in history. People and businesses are still looking for local financial services and a “hometown” approach from their banking provider, so we’re optimistic about First Horizon’s prospects. This trend, combined with the positive economic growth in migration to North Carolina, should stand us in good stead going forward. www.capitalanalyticsassociates.com

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BANKING & FINANCE OVERVIEW

Perspectives: Opportunities Stephen Buchanan Founder & Managing Partner – Mosaic Capital Partners There are way too few companies that are in this employee ownership model, and we are big advocates.

We know that employees can see a life-changing impact on their financial situation by being a participant in the equity value creation of an ESOP. It can help folks pay for the college education of their children. We think it empowers employees.

Kristopher Carroll Chief Investment Officer & Financial Advisor – Carroll Financial Associates, Inc. We have spent a lot of time, energy and money getting better at what we do virtually, including client meetings, symposiums and marketing. We have added a capability in creating video that we did not have before and a lot of small and medium-sized businesses will do this. In the long term, a business adds value through its capabilities.

Tim Jones Senior Vice President & Complex Manager – Janney Montgomery Scott I came here from Wells Fargo to expand our presence in the Charlotte market. I was apprehensive about whether the firm would want to continue expanding the real estate operations given the uncertainty. But we doubled our capacity, while recruiting new advisers to Janney Montgomery.

Phil Jurney President – TowneBank Charlotte Our approach to banking continues to be top priority throughout the company, which is to serve others and enrich lives. That drives what we do at TowneBank. Opening two new offices in Myers Park and Ballantyne will enable us to serve even more individuals, families and businesses with bankers who have been in Charlotte for a long time and are well-versed in Charlotte’s unique culture.

Dean Williamson Branch Manager/Wealth Advisor – Williamson Wealth Group / Raymond James Financial Services Technology has been doing extremely well during this, as people Zoom and get more creative about what they are using to communicate and to do business. I think that’s going to continue as well. I think there’s a lot of opportunity with technology, even more so because of COVID.

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( ) included adjusting branch operations as well as sales goals, accelerating the transition toward digital platforms and remaining laser-focused on existing clients. In parallel, Charlotte’s community banks had to find ways to insert the U.S. Small Business Administration’s PPP loans into their dayto-day operations. Quick on their feet, community banks also retrofitted their retail operations to accommodate drive-through service for the sake of social distancing.

As of February 2021, BofA and Wells Fargo had approved 187,700 PPP loans nationally PPP Loans In late March, 2020, Congress passed a $2 trillion-plus package to address the economic fallout caused by COVID-19. The Coronavirus Aid, Relief and Economic Security (CARES) Act included the PPP, which delivers forgivable loans to small businesses through the SBA. The loans are aimed primarily at covering payroll, rent and utilities. Close to 5,000 financial institutions of all sizes distributed these funds throughout the year.

As of February 2021, the number of PPP recipients in North Carolina more than doubled in the last two weeks of the month. The SBA reported more than 30,000 local businesses in the state were greenlit for PPP loans, totaling $2.28 billion. In comparison, by Jan. 31, North Carolina counted 14,250 PPP loans amounting to $1.22 billion.

The proactiveness shown by Charlotte’s financial institutions is laudable. From the outset of the pandemic and as of February 2021, BofA had approved 66,700 loans nationally, totaling $4.18 billion, with an average loan size of $62,700. Wells Fargo closed 121,000 applications for more than $6.3 billion across the country, while Truist Financial Corp anticipates it will be rolling out close to $3 billion in 2021 alone.

Understandably, North Carolina’s largest metros took up the lion’s share of the state’s PPP loans as of ( )

BANKING & FINANCE INTERVIEW

First-mover The foresight to build out an omnichannel digital platform is paying dividends

Jeffrey Brown Chief Executive Officer – Ally Financial How is consumer behavior changing in respect to digital banking?

I don’t think we’ll see brick and mortar institutions go away any time soon. There are still a lot of people who want face-to-face interactions, but clearly this environment has accelerated all things digital. We were a first mover in this regard over 10 years ago, building out a large, comprehensive omnichannel platform, which has paid ongoing dividends for us. All banks had robust deposit growth in the last year, but it was the digital banks that benefited the most. In 2020, 44% of all dollars that came through the door for Ally were from new customers, and we grew deposit customers by nearly 15% year over year.

What was Ally’s strategy for the PPP loan program and how are you better prepared now?

The government acted swiftly and appropriately with monetary and fiscal stimulus at the beginning of the pandemic, and this was critical to keep the economy afloat. I serve on the Federal Advisory Council for the Federal Reserve, and we saw a different tone coming from the regulators and the Treasury in evaluating whether these actions were having the right effect. At Ally, we moved quickly to get on boarded onto the Small Business Administration (SBA) system. Similarly, we were among the first to provide consumers with comprehensive deferral offerings and we rolled out similar relief for the dealers we work with. We agree more stimulus should be rolled out, especially for the industries that are so adversely affected by the pandemic.

How are consumers rethinking personal finances?

Absolute levels of spending have dropped, which is appropriate in this environment. This has largely been on the services spending side for obvious reasons.

However, goods spending has increased significantly,

and I don’t think—even post-vaccine—we will go back to normal behavior overnight. I think that is a sign that consumers are being smart and financially responsible. Ally is promoting more savings tools, allowing savers to allocate funds to different buckets for their goals and purposes.

How is your business model adapting to the pandemic’s effects?

Our business model tends to be much more efficient, as we don’t have outlays associated with brick-andmortar footprints. We still invest a lot in technology, security and brand, but we are one of the most efficient banks overall. While we’ve been efficient for some time, it is becoming more evident to our stakeholders.

This reflects years of planning and execution. www.capitalanalyticsassociates.com

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BANKING & FINANCE OVERVIEW

( ) December 2020. Charlotte ranked first with 15,544 loans amounting to $1.72 billion, followed by Raleigh with 10,149 loans totalling $1.22 billion and Durham in third with 4,036 loans for a total $434.48 million.

These encouraging figures were not challenge-free.

On May 30, 2020, The U.S. Census Bureau found that Charlotte-Gastonia-Concord was the only major metro with a PPP loan acceptance rate below 90%, standing at 88%. It was, however, a major improvement over the 48.5% acceptance rate obtained four weeks prior.

Moreover, the forgiveness process put in place to turn the loans of the first round of PPP into grants proved more complex than anticipated. For the sake of expediency, banks had to rely on third-parties to review applications and rely on third-party software that at times was unreliable.

Aware of how these complexities were hindering the loan forgiveness process and its purpose toward helping small businesses stay afloat, the SBA had all hands on deck to speed things up. By January 2021, the SBA reported it had processed 85% of the 1.3 million forgiveness applications. A commendable improvement compared to November 2020’s 367,321 forgiveness notices, representing $38.4 billion.

Moreover, the COVID-19 Relief Bill passed by the House of Representatives in March 2021 brought about another series of changes that both lenders and borrowers will need to adjust to, even as they continued fine-tuning their processes from the past two rounds of COVID relief.

Regulations Although regulatory changes are commonplace in the banking sector, the pandemic’s ripple effects and the financial aid rollout acted as the main drivers for regulatory shifts throughout 2020 and are expected to continue to do so for the foreseeable future. The combination of the forced lockdown and a hastened transition from remote-by-force to remote-by-choice are directing financial and banking regulators to focus increasingly on the digital space, user data privacy protection and online transactions to prevent fraud, all while looking to strengthen the core pillars of banking supervision: governance, risk management, capital adequacy and planning, liquidity management and compliance.

As Deloitte highlights, near-zero interest rates sprouted an updated interagency guidance on credit risk review systems in May 2020. The process is critical for any institution looking to consolidate a successful credit risk management practice, made all the more crucial in the context of historically low interest rates.

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PPP loans were an all-out endeavor for banks in the Charlotte region.

As technological innovation ramps up to unlock the capacity to generate, analyze and publish real-time data, regulators are looking to stay on top of reporting through the enactment of several Interim Final Rules (IFR). Report changes include Call Reports, the Report of Assets and Liabilities of US Branches and Agencies of Foreign Banks and the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework, effective as of June 30, 2020. The Fed has also requested weekly data from a select number of large U.S. bank holding companies to maintain visibility and promptly detect emerging risks in the financial system.

The emergence of prominent fintech players has also dramatically changed the landscape of the banking sector. As a significant number of Americans relied on online-only financial services throughout the pandemic, regulators looked to catch up and provide

BANKING & FINANCE OVERVIEW

By 2021, the SBA had processed 85% of its 1.3 million forgiveness applications

a level playing field among traditional banking institutions and disruptive fintech companies by allowing the latter to accept federally insured customer deposits.

Mortgages After a nationwide drop in the average 30-year mortgage rate from 3.7% to 2.6% throughout 2020, January 2021 saw an inflexion point, with the rate climbing to 3 percent by March 2021. The low rates opened the gates to a boom in the mortgage lending segment in the past year, the likes of which has not been seen since before the 2008-9 crisis. Mortgage rates have traditionally moved in tandem with the yield on the 10-year Treasury, which has been rising since the beginning of 2021.

Zooming into Mecklenburg County, as of January 2021, the regional housing market remained

BANKING & FINANCE OVERVIEW

Dee O’Dell Executive Vice President Consumer & Business Banking, East Region – U.S. Bank One of the challenging aspects about projecting the future is not knowing the level of economic stimulus that may come into the economy and being in the dark about the confidence individual consumers will have to spend and drive the economy.

You need both. Our role as an industry is to provide consumers, small businesses and corporations with the tools they need to be able to manage things effectively from where they are right now.

That requires digital and human interaction and being able to meet the people where they are. This combination of technology, digital and the human piece is absolutely critical going forward.

predominantly a seller’s market, with 99.2% of sellers obtaining their asking price or more within the first 23 days of the asset being placed on the market. One key factor of this housing situation is the number of millennials taking advantage of the historically low interest rates.

County officials anticipate that over the next three decades they will be welcoming an additional 600,000 residents, which will require a push in housing developments that does not widen the gap between affordable housing and those that can afford it. Online real estate brokerage firm Redfin Corp found homes in the Charlotte metro area increased 17.3% in total value between February 2020 and February 2021. In contrast, the total value of homes increased 13.4% across the United States during that same period.

Competitive landscape When three household banking names control more than 90 percent market share in the Queen City’s financial landscape, there is a temptation to say the sector is far from competitive. Yet, that initial assessment would be a disservice to the thriving ecosystem of fintech players and startups that are choosing Charlotte as their launching pad.

Charlotte’s nurturing efforts to the fintech scene includes Queen City Fintech. Created by RevTech Labs, the initiative provides a mentoring platform and testing platforms for emerging fintech startups.

By granting access to over 500 world-class mentors and close to 200 venture partners, RevTech Labs has created 1,000-plus jobs and raised $2 billion since its inception in 2011.

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Banking institutions, such as Fifth Third Bank, are increasing their presence in the Charlotte market.

BANKING CONSTRUCTION & FINANCE OVERVIEW

highly COVID-resilient, as some examples demonstrate. Retirement Clearinghouse LLC announced in August 2020 that it would be adding 300 jobs and raised $4 million to expand its Queen City HQ. Fintech startup Amicus closed $8.7 million in new funding in November 2020 to bring it one step closer to its objective to revolutionize the philanthropic sector through donor-advised funds. In March 2021, another fintech startup, Collateral Velocity, raised $1.3 million in a funding round to expand its SaaS platform dedicated to real-time medical claim valuations and collateralization.

Community banks have also carved out a solid footing in the region’s financial ecosystem, despite the dominance of commercial banking. Community banks faced a dire scenario in the face of the pandemic, having to tackle heightened credit reserves,

Lee Fite Regional President, Mid-Atlantic Fifth Third Bank

What is your expansion plan for North Carolina?

A year ago, we announced a significant, multiyear expansion in this market. This will effectively double our financial centers. We finished 2020 with more employees than we had at the end of 2019, and we have added employees in nearly every market. We are always evaluating what we do well and what we can do better. We want to ensure we are making smart, long-term investments for our stakeholders. We have continued to invest in technology platforms and risk management. We have also invested in our wealth management capabilities because business transition is a big topic right now. In the past, we’ve talked about financial technology, which will always be an area in which we invest.

What has the recovery process looked like?

Very broadly speaking, the recovery process has gone well for many companies. At the end of 2020, we saw a lot of growth. Having said that, we have certain industries such as hospitality that are still struggling.

Some areas within real estate will take a few years to recover but others are already seeing significant recovery. The area I’m most concerned about is small business. We have spent a lot of money and extended a great deal of support to these companies. Access to capital is an issue and sometimes access to advice can present challenges. Small businesses are what make neighborhoods unique and that is what makes cities livable and fun.

What are your priorities for 2021?

First and foremost, we set out to reassure our customers and I think we’ve done a very good job of that. We want to make sure we do everything we can to help small businesses get back on solid footing. We’ve spoken with a number of our partners in higher education to become involved in supporting the pipeline of human talent in the coming years. We think there is a good opportunity for second-chance employment. www.capitalanalyticsassociates.com

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Steven Fisher Chairman & CEO F&M Bank F&M Financial Corporation

What are the consequences of the Fed cutting interest rates to historical lows?

It helped greatly on the mortgage side. We benefited from increased volume and our clients benefited from lower payments. But, that’s a relatively small part of our business. It’s an important part of relationship building, but from an earnings perspective it is relatively small.

The much larger chunk of our business is negatively impacted by a low interest rate environment and the impact of margin compression. That impact is going to linger well into 2021, 2022 and 2023. We’ve had a really strong margin above 4% for years here, but it’s hard to keep (+)4% margins when you’re making loans that begin with a 3. Just like during the 2009 recession, it had to be done, and again we need to be what our community needs us to be.

What advice do you have for fintech firms?

Transitioning to a digital landscape is certainly a challenge for a bank like ours. We’re a relationship bank; that’s our value proposition. Those relationships are truly built face to face, handshake to handshake.

Mapping that over to a digital footprint, making relationships mobile, is very difficult. If I were talking directly to a group of fintech developers, I’d tell them to find a way to make relationships mobile. When I look at fintech for us, I have three main concerns: First, how does it deepen relationships? I don’t want it to replace relationships. I want to deepen relationships, as that’s our bank’s value proposition. Then, how do you make it scalable for a community bank? One of the issues with technology is that it’s not being made scalable to the level of community banks, to the level it should be. We’re a midsized community bank and the majority of community banks are smaller than us.

I can’t imagine how they’re struggling to keep up with technology needs as providers aren’t scaling their products to the size of the bank. Many innovations cost the same for a $3-billion bank as they do for a $200-million bank.

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Aquesta Bank was one of the leading PPP lenders among its peers nationwide, processing 1,000 loans by June 2020 diminished profits, payment deferrals and lost new business by focusing their attention on existing clients.

Yet, it was not all doom and gloom. Charlotte’s own Aquesta Financial Holdings and Uwharrie Bank were among the many success stories in the past year. The former registered a 19% year-over-year increase in net income in 2Q20, while the latter saw 68% growth and an 85% rise in its net income.

Part of the reason for the success stems from the booming mortgage refinancing market fueled by low interest rates. Uwharrie reported it produced more loans between March and August 2020 than what it had budgeted for the entire year. Aquesta Bank credits its participation in the PPP rollout as the main growth driver. More than half of its employees were dedicated to that operation, standing as one of the largest PPP lenders among its peers nationwide.

The bank approved 1,100 loans as of May 2020, which provided financial relief to over 14,000 families.

Although smaller in both capacity and revenue, community banks were able to leverage their people first-approach. Uwharrie Bank, for instance, processed 1,000 PPP loans as of June 2020, totaling $80 million — with a 100% success rate. The bank processed most of the loans in-house, and manually.

In contrast, large banks relied on bots to handle thousands of applications at a time during the initial rush, a process the SBA later prohibited.

Growth drivers Charlotte’s commercial lending has demonstrated signs of strong health for 2021, as assessed by Fifth Third, one of the Queen City’s major commercial banking players. As of March 2021, the bank’s leadership clearly noted an inflection point in ( )

Market voices: Wealth Management

Edward Doughty Managing Partner Epic Capital Wealth Management

Investing in a way that has a sustainable impact and employs an Environmental, Social and Governance (ESG) approach is certainly not a secret anymore. COVID-19 has increased the awareness of ESG investing. There has been a massive inflow into that arena. With the presidential transition, there will be more of a push for clean energy. A significant number of the alternative energy stocks — fuel-cell battery storage, wind, solar, electric vehicles — have been the hot topic of the market throughout 2020, with an awareness of the environmental footprint businesses have on both a national and global scale. It keeps gaining traction. One in every three dollars is now dedicated toward sustainable investing and ESG to date. It is emblazoned on the front of most big asset management websites. Entire corporate departments are now focused on it. It’s a big component of what we do at Epic Capital and we see it as an additional layer of due diligence when we evaluate investment opportunities for our clients.

The fintech industry has exploded. We’ve used a particular financial planning platform for the better part of over a decade now. It’s a very good platform, but at the same time, in the last year, there have probably been three or four new platforms that have come online. We give our advisers the choice: whatever it is that make sense for their clients, taking them through the pros and cons and providing a lot of training. That helps the adviser pick a platform based on their clients’ needs. On the investment side, what’s been around is the ability to use some fintech technologies to construct investment portfolios for clients, to work with third-party asset managers. On the insurance side, we rolled out a platform that is a fully digitalized process of applying for insurance. In 2020, we’ve seen three years of technology advancements crunched into one.

Burt White

Managing Director, Investor and Investment Solutions & Chief Information Officer LPL Financial

Tim Flanagan

President, Carolinas MassMutual Carolinas

There is increasing demand for financial advice from a trusted adviser.

Right now, the adviser-mediated advice industry makes up $21 trillion of the $28 trillion retail investment market and the independent adviser channel continues to grow as the preferred channel by advisers and investors alike.

We see that trend continuing, coupled with the growth of changing U.S. demographics for investors, which is driving greater diversity in the industry.

Another thing we are watching is how technology is reshaping the industry.

Advisers need technology to gain scale and efficiency in their practices in order to provide a personalized offering and meet the demands of their clients. And only firms that can invest and deliver value at that pace will remain competitive.

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BANKING & FINANCE OVERVIEW

Perspectives: 2020 Andy Brincefield President & CEO – Consolidated Planning As a regional financial planning firm with about 20 offices in over three states, 2020 was an up year in all categories despite intermittent headwinds. We learned how to acquire new clients and new advisers in a virtual setting. We’ve added several teammates to our ranks and clientele to our portfolio that I’ve never met personally.

Robbie Cannon CEO – Horizon Investments 2020 was the most volatile year on record for the equity markets and it can be tricky to stick to a long-term plan when there is so much unpredictability in the shortterm. It’s important to understand why each person is investing. Investment strategies are still adapting to the more tailored wealth management approach brought on by the pandemic. But the fundamental truth that capital markets create wealth has not changed.

Adam Currie Regional President – First Bank Charlotte Everyone in business is trying to figure out what will stay and what is temporary as a result of the pandemic. There is a lot of discussion about personal interaction, espcially with regard to meetings. Our business is built on personal relationships. These relationships can be continued virtually but I don’t think they can be started or built virtually. Our business thrives on human interaction.

Roger Dick President & Chief Executive Officer – Uwharrie Capital Corp It was a very challenging year for the bank but there was also an opportunity to work for our community and help with issues like PPP applications and small-business loans. I was thrilled to see how our team was united and energized in spite of the pandemic situation and it makes me confident that the future of the corporation is bright.

Karen Keatley Principal & Wealth Manager – Modera Wealth Management Our clients trust us with some of the most important and intimate details of their financial lives, so it is vital that we maintain personal connections. You would think this would be difficult to do in a remote, socially isolated environment.

However, we learned pretty quickly that we can do a lot more through video interaction than we had realized.

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Community banks and credit unions often are able to operate with agility to best meet the needs of the local community.

( ) commercial lending as its deal pipeline has been consistently improving since the summer of 2020. So much so that the bank announced 30 job openings in commercial banking positions in Charlotte alone.

Backed by strong, diversified and value-added industries, as well as strong demographic projections, Fifth Third believes there are no visible signs of a slowdown within a 10-year forecast. The lion’s share of the bank’s strength in its commercial business is made up of manufacturing, healthcare and technology-related businesses, and it is noticing a slow but certain recovery amid its retail and real estate clients. What is more, while the ongoing digital and brick-and-mortar banking balance debate still rages on, Fifth Third is building up a pipeline of 50 new branches in North Carolina toward 2024, 20 of which are planned for Charlotte alone.

PPP loans have also played a pivotal role in maintaining the growth momentum of the Queen City. Almost 19,000 loans made it into the hands of small businesses in Mecklenburg County, as reported

BANKING & FINANCE OVERVIEW

By July 2020, almost 19,000 PPP loans had been issued to small businesses in Mecklenburg County by the SBA in July 2020. Based on the SBA’s data analytics, these loans saved about 198,000 jobs for the county’s local businesses. Going further back and counting all the way to the outset of the pandemic in early March 2020, the SBA has guaranteed a bulk of 122,000 loans to North Carolina businesses.

A silver lining from the pandemic is that financial entities are more intent than ever to lean heavily on ESG initiatives, upping the ante from their preCOVID efforts. As of November 2020, BofA had issued five green bonds, two social bonds and one sustainability bond. The latter was to be directed at racial, economic and environmental issues, targeting minority communities as they were the most affected

Judy Wishnek Commercial Market Executive – Truliant Federal Credit Union

Last year, we were actively involved with the PPP financing.

We pulled together a lot of internal resources to make sure we could meet business member needs. Employees from several different parts of the credit union helped by joining our business services team and worked long hours and weekends, whatever was needed to provide that PPP financing, which was so necessary for a lot of our small businesses. Also in 2020, we hired our first SBA director and we are building out his team here in Charlotte, including an underwriter as well as a business development officer.

We’re going to be adding some more staff to that team because we think an increasing number of small businesses are going to reap the benefits of SBA financing. We have invested significant amounts of time and resources into this area for it to prosper.

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Environmental, Social, and Corporate Governance (ESG) offerings and initiatives continue to rise in importance in the sector.

by the pandemic. Wells Fargo launched a sustainable finance center for lending and investing, and has laid out an ESG strategy as well as its very first ESG report.

Looking ahead Charlotte has successfully built up its brand as a financial hub rivaling New York. Its banking and finance sector already played a preponderant role in its local economy and growth pre-pandemic. As both commercial and community banks continue to secure financial relief for their clients based on the release of Federal and local aid programs, the Queen City’s financial actors are on the frontlines of keeping small businesses afloat by securing a timely injection of added resources to keep unemployment under control and ensure businesses see it to the other end of the pandemic.

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of end-to-end services through either vertical or horizontal integrations. Case in point: New Republic Partners is to become a bank holding company through the acquisition of voting shares of New Republic Savings Bank, as the bank transitioned from a federal savings bank to a state-chartered commercial bank.

Moreover, in February 2021, members of Greensborobased Premier Federal Credit Union approved the merger with Charlotte Metro FCU. The new entity would represent cumulative assets of close to $1 billion and serve more than 90,000 members. The combination would also serve to provide a wider array of products and services for Premier FCU while at the same time extending Charlotte metro’s market reach.

With the possible exception of Wells Fargo, which announced a series of layoffs, Charlotte’s major financial institutions did not have to rely on drastic cost-cutting measures beyond closing branches in an effort to reevaluate and re-strategize the importance of their respective brick-and-mortar

BANKING CONSTRUCTION & FINANCE OVERVIEW

William Hedgepeth President & CEO Select Bank & Trust

How have you expanded your presence in Charlotte?

We came up as a rural community bank and have done well. There comes a point in time where you are mature in your markets and start searching for other expansion opportunities where you might find growth.

In most of our rural markets, we are either the top community bank or near the top. It became necessary for us to go into Raleigh and then Charlotte for growth.

That is where our future growth is going to come from: Raleigh, Charlotte and Virginia Beach, and in all likelihood, Wilmington as well. We are expanding our footprint into Winston-Salem and Durham with loan production offices, not full branches. As a community bank, most of our income is interest income on commercial loans to the tune of approximately 70% of the total, which is typical of community banks.

assets. COVID-19 has made the case for banks to consolidate a diversified portfolio and minimize risk exposure, which is why there are differentiated cost-cutting and divestment strategies across major financial players as they set out to recalibrate their risk tolerance matrix and balance their exposures through leaner operations.

The Queen City’s entrepreneurial and innovative ecosystem is poised to continue to produce important players in the banking and finance sector, tracing the roadmap of the next stage of the country’s banking and finance tech, to the benefit of more efficient services and broad access to financial instruments to users of all socioeconomic backgrounds.

It is no coincidence that BofA has allocated a $3.4 billion budget directed at extensive innovation in new technology for 2021, which represents a 13% increase compared to 2020. Be it fintech, digital channels, mobile offerings or revamped cybersecurity protocols, Charlotte’s banking sector is ready to enter the next frontier.

What new lines of business are you anticipating to accommodate shifting demand?

We established SBA and mortgage lending a couple of years ago. We think we can get a lot more out of that.

Outside of those, we are not quite there yet on online loan applications. We are working to be at the level of activity we want to be, through interactive teller machines instead of ATMs. Traditionally, community banks do not deal with a lot of auto loans. Credit unions and dealerships do most of those.

What are your main goals for the bank?

Our priorities are laser-focused on growing our customer base organically. We would like to have some commercial bankers, SBA lenders and Mortgage lenders in key markets. We will continue to do the things we do well. If the opportunity is right to open branches, acquire branches or smaller institutions in the Raleigh and Charlotte areas, we would love to do that. We would love to get a footprint of well over $2 billion in assets and claim our place as one of the largest community banks in North Carolina. www.capitalanalyticsassociates.com

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Charlotte region financial services: Key facts: • $1 out of every $7 earned comes directly from financial services • Leading contributor to region’s economy, with more than $28 billion contribution • One of only two sectors to add jobs in 2020 • Nearly 5% growth in 2020 compared to below 1% nationally • No. of people working the region’s financial services sector: more than 93,000 • 30% employment growth over the past five years

Key dates: 1927: Federal Reserve opens branch office in Charlotte 1985: Interstate banking becomes legal, benefiting North Carolina’s banks which already had experience with M&A given the states looser regulations on cross-county banking 1998: Nationsbank and Bank of America merge and move HQ to Charlotte, making the region the second-largest banking center in the country by assets 2019: Truist moves HQ to Charlotte, giving the region the largest employment base of three of the six largest banks in the country

Finance sector employment growth, 2016-2020: Charlotte Austin Phoenix Tampa Nashville Dallas Atlanta Minneapolis Denver Jacksonville Columbus Washington 0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Financial subsectors by employment, Charlotte region 2020: Insurance

23%

Securities commodities and other financial investments

Credit intermediation

62%

15%

Source: Charlotte Regional Business Alliance

Healthcare: With one of the most vibrant healthcare sectors in the country, Charlotte is ready to emerge from the dark days of the pandemic, even as it continues to deal with challenges that include affordable and accessible care.

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Brighter days: A positive outlook and a burgeoning life sciences hub point to a healthy future Charlotte boasts one of the country’s most vibrant healthcare sectors, including powerhouse groups like Atrium Health, which has 42 hospitals, 1,500 care locations and 55,000 employees under its umbrella. The field is wide open as well, which can be seen from the continued interest of outsiders: Centene Corporation, the health insurance giant based out of St. Louis, will invest $1 billion in Charlotte, bringing up to 6,000 jobs, in the next decade. Other examples of the sector’s rising star in the region include Wake Forest School of Medicine’s highly anticipated campus that is being built in the city of Charlotte and expected to open in 2024.

The COVID-19 pandemic put the sector in the spotlight as never before, which highlighted both its successes and failures. In Charlotte, it was found that hospitals had plenty of capacity in terms of hospital beds but not nearly enough trained clinical staff to deal with the influx of patients suffering from COVID-19. As the caseload went up at different points over the course of the pandemic, Gov. Roy Cooper had to order the temporary cancelation of non-emergency procedures at the state’s hospitals.

But the vaccine rollout has been a clear success, achieved in Charlotte with aplomb, speed and minimal waste, an accomplishment in itself considering the 146

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storage requirements of the various vaccine types.

In Mecklenburg County, for example, Deputy Public Health Director Raynard Washington told the Charlotte Observer in March 2020 that no viable doses had been lost as a result of human error, although the Observer also reported that at least 44 doses were deemed “not suitable for use” because of defects.

Landscape The availability of medical care, while above the national average, is beset with problems familiar to the rest of the country: 16% of North Carolinians are without medical insurance, with 120,803 in Mecklenburg County alone. The North Carolina figure is the ninth-highest in the country. According to a national ranking, North Carolina slipped from 31st in 2015 to 36th in 2019. As well, it exceeds the national average in adult obesity, heart disease, HIV diagnosis, infant mortality, death from firearms, and opioid overdose rate. With different approaches vying between a Democrat governor and a Republicanled Assembly, healthcare is in a state of limbo at the moment, with neither improvement nor deterioration.

The major healthcare providers in Charlotte are ( )

HEALTHCARE INTERVIEW

Tele-success Telemedicine has become a fundamental element in patient care post-COVID

Dr. Dale Owen CEO – Tryon Medical Partners How does Tryon Medical stand out as a doctor-owned facility?

To the best of our knowledge, we are the first and only large multispecialty group to have extracted itself from a major healthcare system successfully. We had about 115,000 patients attributed to us at Atrium when we were owned by the hospital and part of their system.

As of February 2020, we’ve increased that to 152,000 registered patients, amounting to approximately 20% of the adult population in Mecklenburg County.

How has telemedicine been received among patients and providers?

We had about a 2% use of telemedicine before COVID-19 hit. Now, we have expanded telemedicine to become a fundamental way we can serve patients, in many cases more efficiently. It’s crystal clear there is quite a variation and degree of use of telemedicine.

Some large hospital systems are seeing 30% of their current in-office patients, the remaining 70% is through telemedicine. We are seeing 80% in-office. We are able to do so because we created safe harbors. We are testing all of our physicians and staff for COVID-19 every three weeks to create a safe and secure feeling for patients when they need to come into our clinics for their appointments.

One of the reasons telemedicine was not being used as much previously is that not enough people knew enough about it and the remuneration for it from insurance companies was typically 20% of the payment for an in-office visit. When Medicare and the payers came onboard to make it on par with regular insurance payments, that allowed physicians to keep their doors open during the early months of the COVID-19 virus.

What we really need is for insurance companies and payers to validate that telemedicine will continue to be funded at the same level as in-office visits in the

future. Both telemedicine and in-office visits need to continue, post COVID-19. We need the flexibility to use both when the situations warrant it.

What are Tryon Medical’s plans for the coming year?

We have to remember that 10% of independent practices across the United States have already declared bankruptcy during COVID-19. Forty percent are at risk, out of which 25% are dangerously close to bankruptcy themselves at present. Tryon Medical Partners has done extremely well since we left the hospital system and became independent in 2018, but we cannot rest on our laurels. We must have all of our core principles and core parts of our business humming to weather these challenges. Other than COVID-19, the big thing is adaptation and access to the needs of the patient. www.capitalanalyticsassociates.com

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Lindsay Muns CEO Charlotte Radiology

How does Charlotte Radiology fit into the health sector in Charlotte?

The company has been around for over 50 years and throughout its evolution we have always been a partner of Atrium Health, formerly known as Carolinas Health System. We’re the exclusive radiology provider in the majority of its market. In 2018, Charlotte Radiology became the founding practice of US Radiology Specialists, a radiology roll up in conjunction with private equity firm Welsh Carson. We retain a tremendous amount of local autonomy and control, and this partnership allows us more headroom and resources to navigate some of the headwinds that healthcare faces.

We serve 19 hospitals in the greater Charlotte market and we have 16 breast imaging centers that we wholly own, one of which is mobile.

How have the shortages in medical staff complicated your operations?

The majority of patient care professionals we employ are technologists. The good news is that we are not seeing a shortage mostly because of the huge population influx into Charlotte, even before the pandemic. However, radiologists, and specifically subspecialized radiologists, will become more and more difficult to recruit. There is such a demand for them across the country. It is encouraging that teleradiology is possible in terms of reading the scan and sending the results.

What are some of your near-term priorities and goals?

We are bullish, and we have plans for expansion in mammography and outpatient imaging. Everything we have seen since the beginning of January indicates that outpatient imaging is not slowing down. In-hospital scans will probably drop off slightly and potentially be below 2019 levels until the vaccine is more widespread.

However, we are definitely predicting growth over 2019 and we are encouraged by our ability to manage the changing environment of the last year.

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( ) the behemoths: Atrium Health and Novant Health. Atrium Health Union West, opening in Stallings, North Carolina in early 2022, will bring with it a raft of resources to the area, including 40 acute care beds, 30 medical/surgery beds, six labor recovery rooms, four intensive care rooms, 10 emergency bays opened 24 hours a day, two operating rooms, imaging services and a laboratory. Atrium has other projects in the works too, including new emergency departments in Mountain Island and on Providence Road. Novant Health is similarly expansionist, with a new hospital in Ballantyne due to be completed in 2023.

But the leading project is the Wake Forest Medical School (in partnership with Atrium) that will be opening its new campus in Charlotte. This project hopes to be a bridge between the faculty from its Winston-Salem campus and the professional expertise for which Charlotte is so well known.

Probably the biggest new trend in health over the past year was telehealth, and while not local to the Charlotte region, it has been embraced wholeheartedly by the regional health sector. Telehealth, which allows easier, remote access to routine healthcare, was already growing substantially before the pandemic struck.

Once the hospitals became overloaded and unsafe for fear of contagion, the development of the telehealth market grew with exponential speed. This burgeoning market saves time and resources, and potentially lives. Atrium Health began offering telehealth services to help people battling COVID-19 and between March and September of 2020, it was able to attend to 13,000 patients remotely.

COVID impact The healthcare industry in Charlotte has been among the highest drivers of growth in the region.

Centene is expected to add thousands of jobs when it opens its new campus in the University City area in what is poised to be one of the largest economic development investments in North Carolina’s history.

In addition to jobs directly related to the health sector, Charlotte is an emergent manufacturing hub in the country and among its biggest exports in this regard are pharmaceuticals and medicine.

In spite of what by many measures is seen as a bright future, the COVID-19 pandemic bruised the health sector in Charlotte in spite of the outpouring of gratitude toward medical doctors and first responders that became common after the pandemic interrupted lives and society. For healthcare providers, there were fewer office visits and fewer elective surgeries (a primary financial lifeline) as a result of the influx of

CONSTRUCTION HEALTHCARE OVERVIEW

COVID-19 patients. More than 60 Charlotte healthcare providers were approved for Paycheck Protection Program loans of $1 million or more and even some of these did not survive the lean year of the pandemic.

Among those practices requiring federal help were dental offices, mental health experts, specialty care practices and assisted living facilities. A large issue here was that so much of federal relief money went toward the largest institutions in the state that are already sitting on billions of dollars in reserves: of the $600 million set aside by the Provider Relief Fund in North Carolina, the majority went to Atrium Health, Novant Health, Duke Health and UNC Health Care.

This situation has transpired in a year beset by untold stress and burnout among healthcare workers. There was a paucity of medical supplies and beds that forced frontline workers to make difficult decisions while executing their tasks. At one local site, Tryon Medical Partners, doctors were working long hours, testing 150 to 200 patients a day and seeing, at the worst times, a 25% positivity rate. At Presbyterian Medical Center, there was a point during the darkest days of the pandemic when almost all of the patients were on ventilators. Adding to the stress of the situation was the fact that, due to the contagious nature of the virus, no loved ones were allowed to visit the ICUs. Health policy On the policy front, there have been healthcare changes at the county, state and federal level throughout the year. In Mecklenburg County, many policies were put into place to combat the COVID-19 pandemic, such as stay-at-home orders and curfews. A number of these are set to expire as the pandemic subsides over the course of the vaccine rollout. On the state level there was a battle over Medicaid funding. The program consumes $3.7 billion in state expenditures, and the governor and state legislature — the governor wanted to expand the program to cover hundreds of thousands of uninsured adults — found themselves at loggerheads over how to move forward. On the federal level, this year has seen a rocky transition from Trump to Biden. The new administration is expected to bolster both Medicaid and the Affordable Care Act (ACA), known as Obamacare, both of which took a hard hit from the previous Republican administration.

Insurance market Six insurers offer coverage in North Carolina’s exchange: Cigna, Ambetter, Centene, Bright Health, Oscar and United Healthcare. The state has one of the highest enrollments for private health insurance ( )

Trey Sutten CEO Cardinal Innovations Healthcare

What are the challenges and opportunities of expanding your network of providers?

It’s an essential point for us in terms of the care that we deliver, that we are responsible for. It’s in the context of behavioral health, mental health services. What we do is unique and different from physical healthcare. For us, it’s about making sure that you have a strong connection to the individual so that there is candor, honesty and transparency in what they are dealing with. It’s imperative for us that our provider network reflects our membership.

We’ve been investing significant resources in the communities we serve. We hosted a radio program on a Latino channel. Pre-pandemic, we did a job fair and are now doing virtual fairs. Over the last year, we’ve added 199 providers for child welfare services. More broadly in terms of all providers, we added over 50 new general providers across 12 different services. That’s against a baseline of about 850. It was a large increase in the number of providers that we brought on with a specific emphasis on diversity so as to make sure that we have got that strong bond between the person caring for our members and the members themselves.

What are the main near-term goals for Cardinal?

Our main priority remains executing our plan of action. The core idea is to build out our child welfare model, getting our turnaround times in line, getting our admissions and readmissions down below 22% by June and then 18% by October. There are a lot of key priorities in terms of member care and doing exactly right by them. The other big priority for us is integrated health care, bringing together physical, behavioral and pharmaceutical; connecting the mind with the body; even going beyond that and connecting that individual to the environment. We’re getting ready for integrated care, to deliver on the social determinants of health. We lead the state in housing as an example. We’re seeing a lot more activity in the food and security space. We want to focus on all the peripheral things that make a person’s life better, make that individual healthier. www.capitalanalyticsassociates.com

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HEALTHCARE INTERVIEW

Demand changes As demand for services affected by the pandemic returns, challenges and concerns remain

John Green President & CEO – Iredell Health System How are you preparing for the anticipated shortage of healthcare workers?

We’re one of the industries that is still almost fully hands-on. We’re going to have to be creative because we’re not going to have enough workers, which will involve looking at implementing technologies to automate processes and different staffing patterns.

We’re also looking at our student programs and trying to attract more individuals to the healthcare community. We need to help students form a pathway to the industry, and not just for nurses because we have a variety of professions that are in need of talent.

International opportunities are a possibility as well.

There are a number of programs that allow us to bring in nurses and other healthcare professionals who wish to come to the United States. While we want to help anyone in our community who is looking to advance their healthcare careers, we also have to make sure we have enough staff.

How has demand for your services fluctuated during the pandemic?

Demand for outpatient surgery has returned, but we haven’t seen the return of some chronically ill patients.

We have heard this throughout the state and nation and assume that they’re fearful of getting care due to the pandemic. We certainly haven’t seen the same numbers come back through our emergency room, which has been a significant swing for all hospitals.

Through February 2021 we had seen a 15% to 25% drop in emergency room visits. This is concerning. We rarely have days that resemble pre-pandemic demand.

We’re the first to advocate that individuals shouldn’t come to the emergency room if they can get their care through some other means. However, we want people who need the emergency room to come.

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What problems does the healthcare system need to address?

Going forward, the entire healthcare system, including ourselves, needs to figure out how to become increasingly transparent, how to moderate price increases and how to reduce costs. At this point, almost 20% of gross domestic product is healthcare. If you went back 30 years ago, no one would have predicted that healthcare would become one in every five dollars spent. Healthcare is absolutely the most expensive thing people deal with other than their mortgage, and sometimes we’re even as expensive as that. Healthcare can’t continue at this pace. At the same time, citizens expect great, convenient care, which is hard to balance with cost. This is where telehealth or different means of achieving wellness have potential to increase healthcare quality and reduce costs.

HEALTHCARE OVERVIEW

( ) under the ACA. Most of those seeking to enroll qualify for financial assistance and choose the ACA because the state has not expanded Medicaid to this demographic. Since the ACA marketplace for insurers opened in 2014, it has been a relatively volatile ride nationwide, with insurers dropping out as often as they opt in. In North Carolina, for 53% of that time, at least three insurers have been active in the ACA marketplace. As far as its cost, those who get coverage through work are paying more, up 4% in 2020 and 55% in the last decade. Over the course of the last year, many insurance providers have waived costs directly related to the pandemic, though these varied considerably, and the policies were not without time limitations.

Public health For public health, 2020 was an eventful year, unlike any other. In Mecklenburg County, the novel coronavirus became the third-highest cause of death, behind heart disease and cancer. Beyond that, other health crises continue apace, with the opioid epidemic among the leading concerns. In fact, there was a spike in overdoses during the pandemic. To help combat this, Charlotte health organizations pooled $500,000 to distribute Narcan, the lifesaving overdose drug, throughout the city.

Life sciences Just as it is nationally, life sciences is a growing sector in Charlotte. The city is now home to 50 different life sciences companies not to mention a further 300 in the sector’s supporting ecosystem. This is a sector often indicative of an excellent local higher education system, which North Carolina most certainly has, as well as a vibrant health sector. Altogether, this is a winning combination for the future of this industry in Charlotte. Life sciences are also a particularly attractive destination for foreign direct investment into Charlotte at the moment, according to JLL. In a report on the sector published in March 2021, JLL rated the potential of emerging life science markets, scoring areas such as GDP growth, millennial population projections, income and growth in housing inventory. The CharlotteConcord-Gastonia region received the highest score, 93, followed by Seattle-Tacoma-Belleview at 88.3. JLL looked at 110 markets for the report.

Community and accessible care As mentioned, by a number of metrics, North Carolina has a deficiency in accessible care for many of the state’s residents, an issue that has become all the more pressing as the COVID-19 pandemic has been raging.

The upcoming developments like the Wake Forest School of Medicine are incredibly important for Charlotte’s growing healthcare industry.

In some ways, the private sector has stepped forward to fill this gap. For instance, at the height of the pandemic Atrium Health was able to extend its virtual health services to smaller hospitals free of charge. Further, Atrium was the only nonprofit healthcare company to win the 2020 CMS Health Equity Award. In some cases, private citizens are stepping forward. Former basketball superstar and North Carolinian Michael Jordan is a staunch supporter of equitable access to health and has already opened two clinics in the state.

Looking ahead The outlook for the health sector looks bright indeed. Even before the pandemic, it was on an upward trajectory, and this has only grown as outside companies make investments in the city and the companies already here continue to grow. The COVID-19 pandemic, while in many ways exhausting the health system and underscoring the social divisions germane to access, also poses an opportunity for collaboration, concentration and growth. Charlotte will see the benefits of a vibrant health sector as it inoculates its residents at a faster rate than many other places in the country.

The health sector in Charlotte will continue to benefit from a pro-business, corporate friendly environment in the city overall. Companies are looking to move into the region, the government is friendly and there is an abundance of skilled labor. This latter aspect is especially important in health. Here, North Carolina has a solid foundation of world-class universities that will help ensure that this sector continues to thrive in the Charlotte region. www.capitalanalyticsassociates.com

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Central Piedmont Community College: Central Piedmont Community College is well known as a workforce partner and as one of the key contributors to Charlotte’s prosperous economy. Most importantly, it is an advocate for student success, particularly through its seamless pathways approach that looks at education through a holistic lens. As the region emerges from the pandemic, Central Piedmont has a pivotal role to play.

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Pivotal player: Central Piedmont looks to Charlotte’s recovery with an eye on the region’s long-term future Central Piedmont Community College has been a cornerstone of Charlotte’s robust educational system for more than 50 years. Emerging from a historic pandemic that devastated the national and local economies of markets worldwide, rearranging the business, social and educational landscape all while accelerating innovation in and out of the classroom, Central Piedmont is expected to be a seminal player in Charlotte’s recovery while helping guide the market’s equitable long-term future.

The college’s plethora of associate degrees, corporate and continuing education offerings, its adult education and fully online programs mixed with the college’s deep commitment to learning outcomes, creating career pathways and improving economic mobility in the Queen City, are invaluable assets for safeguarding the success of current and future students as well as Charlotte’s established and growing economic sectors.

As the second-largest community college in the North Carolina Community College System and the largest in the Charlotte metropolitan area, Central Piedmont has grown hand-in-hand with the Queen City, supporting the career pathways of traditional students, adult learners and professionals while being an integral part 154

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of the economic development activity in the Charlotte market. Coming out of the pandemic landscape, residents and businesses alike will rely on industry experts and community partners to contend with the ongoing and ripple effects created by COVID-19 and its aftermath. At this intersection, the Charlotte market can look to Central Piedmont to serve as a beacon to illuminate the uncharted territory of a post-pandemic future.

Growing impact From its beginnings, Central Piedmont has been at the forefront of change, adapting to the reality of the times. The college opened its doors in 1963, the height of the Civil Rights movements, merging the mostly white Central Industrial Education Center and the mostly Black Mecklenburg College to become Central Piedmont Community College, following the N.C. Community College Act of the same year. The Central Campus is located in Charlotte’s Elizabeth neighborhood, though the college’s presence spans Mecklenburg County, with six campuses and two learning centers.

As of 2021, Central Piedmont serves more than ( )

CENTRAL PIEDMONT COMMUNITY COLLEGE INTERVIEW

Intentional The pandemic proved an opportunity to live up to words and expectations

Dr. Kandi Deitemeyer President – Central Piedmont Community College How has Central Piedmont supported its students through the pandemic?

I think the pandemic showed our strengths and where we want to go. We like to use the words “intentional” and “transformative,” and the pandemic allowed us to be even more intentional with students, where we’ve had to do more one-to-one interaction. We had to meet students where they are more than ever before, whether you work in student affairs or are a faculty member.

I think it gave us a great opportunity to focus on the teaching and learning experience. While many of our career and technical education programs continued with in-person, on-campus instruction, most of our programming since the pandemic began has been in a remote format. Being able to meet students in that experience was important, in spite of the fact that, at the time, not every student was ready and not every faculty member was ready for online interaction. .

How has Central Piedmont worked to support economic mobility?

In the last four years, I have not had a conversation with a local business leader, government leader or a community leader who has not come to that conversation with a deep understanding that we all need to do better.

As a community, everything we do needs to focus on programs that can be strengthened and initiatives that can bring prosperity to everyone. How do we change people’s lives? How do we transform our community?

How do we strengthen it? I’m very proud the college has been involved in these conversations from the start, and that our strategic plan focuses on student success and providing pathways to greater economic mobility. There has been action on multiple fronts, such as coalitions driven by the mayor’s office. It might be work in one of our healthcare industries, or through the Leading on Opportunity organization. We’ve gotten

very intentional about what those partnerships mean and what they can achieve.

What are your near-term expectations?

Certainly, we’re going to return to campus and continue our work. We’re excited to have so many more of our students back on campus for the fall 2021 semester. As I think about Central Piedmont Community College coming out of this pandemic, we’re going to be ready to meet the high-growth demands and needs of our prosperous, growing and global city. Prior to the pandemic, Charlotte was definitely coming into its own, and as more people are vaccinated and businesses return to more-normal operations, Charlotte is going to bounce back in a big way. Central Piedmont will be ready to serve our students and community partners. www.capitalanalyticsassociates.com

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Dr. Heather Hill Vice President of Academic Affairs Central Piedmont Community College

What is your view on the pandemic’s impact on talent availability and retention?

We do believe that we have a responsibility not just to our traditional straight-out-of-high-school students, but also to nontraditional, incumbent workers who either need another credential to move up or an opportunity to re-career. That is an area that is highly attractive to the nontraditional student. It is succinct without all the exploration. We thoroughly examined our data and some nationwide data and we found that students are more successful and completion rates are higher if you have shorter term courses. As an institution, we’re looking at offering more of the shorter eight-week sessions instead of so many 16week sessions. We have offered eight-week courses for many years, but we’re trying to make a more intentional effort with our calendar so we can have an eight-week session, take a short break, be very intentional with our recruitment, our registration, our advising and get students back into the next eight-week program.

Where do you see online education moving as the pandemic recedes?

One of the lessons from the pandemic is that there are some things we can do online that we thought maybe we never could. It has given us an opportunity to reexamine technology because many of us as faculty members may have one idea of what technology can do for us. With the speed at which technology is changing, we have an opportunity to reevaluate some of the most current technology and to even refresh the things that we were doing. There is a ton of research out there about the benefits of flipped classrooms where students prep online with some type of material and then come into the classroom for the homework, the real-time tutorial piece of it. There is an opportunity for that. I don’t think, however, that it is one or the other. It really is a blend to the point where we would estimate that very few of our classes moving forward will not have some component of technology.

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Following safety protocols, Central Piedmont has offered some inperson classes throughout the COVID-19 pandemic.

( ) 50,000 students annually, with approximately 43,000 for-credit and more than 12,000 corporate and continuing education students taking classes at the college each year, respectively. The college also draws in more than 3,000 international students annually, representing 152 nations. Additionally, approximately 1,200 military veteran students add to the college’s diverse student population.

At the helm of Central Piedmont is President Kandi Deitemeyer, who was appointed the college’s fourth president in 2016 and assumed the role in January 2017.

Strengthening the relationships across the college’s six-campus footprint as well as with the business community in the region has been a keen focus for Deitemeyer.

“The college constantly looks for opportunities to partner with employers directly to meet their workforce needs more efficiently,” Deitemeyer explained. “We have a number of programs with companies such as Carolina CAT, Cummins, Siemens, and Tesla, through which we train students in the specific skills and knowledge required by these employers. These partnerships ensure these companies have a pipeline of new, well-trained talent. We have found these programs can work for employers in a wide range of industries.”

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With more than 300 programs available, Central Piedmont’s goal is to provide the kinds of programs and opportunities for citizens to acquire the academic knowledge, industry experience, business and life skills needed to successfully enter the workforce or transfer to other higher learning institutions, crucial tenets in the pandemic recovery process and the bedrock of improving economic mobility in the region.

Pandemic pivot Prior to COVID-19, Charlotte experienced a decade characterized by robust business expansion and population growth, garnering a reputation as a headquarters city and for its entrepreneurial opportunities. Central Piedmont has been a major centerpiece of this growth. At the onslaught of the pandemic in March 2020, the college doubled down on its efforts to provide student support both in and out of the classroom, remotely and in person, to help students and industries weather a challenging and unknown landscape.

The pandemic prompted the move of more than 1,500 class sections to the online/virtual delivery method along with the necessary student services. As part of its immediate support to the student body, Central Piedmont provided more than 1,200 laptops with accompanying Wi-Fi hotspots to enrolled students.

“We are working to provide technology because many students simply are not equipped to move into a remote learning environment. We are making laptops and Wi-Fi hotspots available to students through many different philanthropic partnerships,” Deitemeyer told Invest:.

More than $120,000 has been raised specifically for the Student and Employee Emergency Funds since last March. The college’s holistic student support factors in the unexpected financial emergencies that could prohibit students from completing their degree programs, a reality that materialized for many as a result of the pandemic. The college’s Student Emergency and Finish Line grants illustrate Central Piedmont’s efforts to meet students’ beyond the academic level in order to best ensure positive learning outcomes. To that end, the newly established Central Piedmont Cares initiative has helped more than 70 employees and 3,800 students throughout the pandemic. Central Piedmont’s holistic approach makes financial, medical, mental, legal and technological support functions available to the student body in order to maximize their experience at the college.

Some students returned to campus as early as May 2020, as many programs require an in-person instruction component. The increasing availability

Dr. Tracie Clark Vice President for Strategy and Organizational Excellence Central Piedmont Community College

How is the college thinking about hybrid curriculum options?

We are very fortunate that pre-COVID, we had done the background research and approved the launch of our Parr Center for Teaching and Learning Excellence. While we had to launch it in the middle of the pandemic, it could not have come at a better time because several faculty members who needed those additional skills were able to teach in an online format. Even as we are trying to get back to whatever this new normal is going to look like and we offer more sections on campus, we are still going to have to social distance. There are some classes that have 50 seats and no one at this stage is going to sign up for such a packed-in, indoor environment. That is where hybrid options come in. It grants us the ability to be flexible with a large class roster.

What functional roles is Central Piedmont looking to expand?

We distributed a basic needs survey to our students to find out what they needed. Mental health as well as housing and food security were top of the list. The survey helped us in our recruitment and retention efforts. We are constantly making sure they are aware of those additional resources we have at their disposal, including food pantries on each campus. We are sending the message that we are here to support their non-academic needs as well.

We are also looking to build out our access to labor market data. We work with several different companies to get workforce trends, average salaries and postings in our community. They are very helpful in tracking trends, particularly with the pandemic. The opportunities that are available today are quite different than they were six months or a year ago. That allows us to be on the pulse so that we can know what fields are going through a spike in demand and those that are dying down and reflect that in our programs.

In addition to the faculty support with the Center for Teaching and Learning, we do anticipate an increased focus on general employee talent. www.capitalanalyticsassociates.com

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Dr. Chris Cathcart Vice President of Student Affairs Central Piedmont Community College

What drives the student affairs department at the college?

What we have at Central Piedmont is a very passionate and experienced team of professionals. There are members of our team who have been at this work and in this organization for 20-plus years and are happy to do it, so the wealth of experience and knowledge that we bring to taking care of our students is considerable. We are always thinking of ways we can continue to improve the support to our students and we are passionate about that.

How has your mentoring program performed during this time of immense change?

We have several different mentoring programs that attempt to address the needs of our diverse student populations. Obviously, it’s been an interesting process to keep those students engaged. We work with those who are in high school, and some who are on campus.

Sometimes the outreach component has been difficult because our students have so many competing priorities.

We’ve had to do outreach to keep our programming consistent. Through the routine, through the exercise, and through the activity, we were able to keep our students engaged and actually make them as successful as we can. Of course, cohorts are not as large as we would expect them to be because of the pandemic, but the ones we have been able to engage, have been successful and are moving through our academic programs with minimal concern.

How have you engaged students in matters concerning diversity?

We wanted to create a space where there could be a good, strong dialogue about implicit bias, about cultural awareness. We sought to increase the opportunity for us to hear different perspectives and then investigate how we act and internalize that information, ideally using it to be a more inclusive community. The college has tried really hard to focus on that over the past year and feel we’ve been quite successful.

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of COVID-19 vaccines point to a more robust return to normal on-campus operations come fall 2021. As the college returns to regular operations, student success and community service will continue to be Central Piedmont’s guiding principle as outlined in the college’s vision, mission and values.

Seamless pathways As Charlotte’s economy diversified and expanded in the years following the 2008 Great Recession, difficulties in finding well-trained, highly skilled talent became a common thread across major economic sectors.

Businesses will continue to face this challenge as Charlotte embarks on the COVID-recovery process, with educational institutions uniquely placed to address those workforce needs. As the largest educational institution in the Queen City, Central Piedmont has a major role to play. To help fill the labor gap, the college is intent on creating seamless pathways for traditional students looking to transfer to begin careers or move to advanced programs after a two-year stint at the college, working professionals looking to further their careers, and nontraditional students looking to pivot into successful career tracks.

With more than 300 available programs revolving around healthcare, construction and complimentary trades and advanced manufacturing, among others, coupled with key strategic partnerships with local industry leaders, the college is well known as a workforce-focused entity. Corporate and continuing education offerings mixed with apprenticeships, internships and work-based learning opportunities fuel Central Piedmont’s workforce-focused approach. With today’s quickly evolving and highly competitive job market, students can distinguish themselves from a pool of candidates by tapping into Central Piedmont’s robust offerings of apprenticeships, internships, continuing education courses and work-based learning offerings.

This college’s offerings feature real-world experience with some of Charlotte’s biggest employers in diverse fields of study. Key partnerships with companies such as Amazon, Atrium Health, Bank of America, Blum, Carolina CAT, Cummins, Duke Energy, Hendrick Automotive Group, Novant Health, Siemens and Tesla provide students with valuable field experience that best matches their personal interests and goals.

As a major transfer partner to other four-year institutions, Central Piedmont’s pathways extend well into other parts of Charlotte’s higher education system.

Nearly 60% of Central Piedmont’s students transfer to other universities, many to the University North Carolina (UNC) at Charlotte. In 2019, Central Piedmont

CENTRAL PIEDMONT COMMUNITY COLLEGE CONSTRUCTION OVERVIEW OVERVIEW

and UNC Charlotte announced 49erNext, a new coadmission program focused on facilitating degree completion as students seamlessly made the transition from the college to the university. A fully integrated advising model centered around students’ academic, financial aid and career planning needs is the hallmark of this program in an effort to best ensure the timely completion of a baccalaureate degree. A pilot class of 111 students opened the 49erNext program in August 2019, and close to 29% of UNC Charlotte’s transfer students come from Central Piedmont. Participants of the 49erNext program are eligible to seamlessly transfer into more than 75 undergraduate degree programs, or more than 130 majors, at UNC Charlotte, as long as they complete an associate degree at Central Piedmont with a minimum 2.0 cumulative GPA. Similarly and despite the ongoing health crisis, Central Piedmont doubled down on efforts to expand seamless pathways to other local Charlotte four-year institutions in 2020.

Participants in the 49er Next program are eligible to seamlessly transfer into more than 75 undergraduate degree programs Last August, Central Piedmont and WGU North Carolina, an affiliate of national online nonprofit Western Governors University, signed a memorandum of understanding agreement to ease the transition of Central Piedmont graduates to pursue bachelor degrees offered by WGU, while also providing tuition discounts and access to scholarship funds.

Last September, Central Piedmont and Queens University of Charlotte announced the launch of the RoyalUp program, another of the college’s direct pathways to completion of a bachelor degree. RoyalUp participants who maintain a 2.5 GPA or above are guaranteed admission as well as a $10,000 annual scholarship at Queens. “This public-private partnership is unique and will be a great benefit to students in Mecklenburg County. We are excited to offer this option and pathway to our students who will thrive at Queens,

Mark Short Vice President of Talent & Organizational Engagement Central Piedmont Community College

What are some of the main takeaways from COVID19’s disruption?

The biggest takeaways revolve around connectivity and communication with our teammates and students.

Workforce and technology connectivity was critical for us. We created a culture of care by establishing a dedicated email group where employees and students could reach out to the college to address any need they were facing, from financial to mental health support.

We also implemented a variety of internal initiatives to support and motivate staff throughout this time.

Maintaining connectivity with a human element was important because when the pandemic started, we had no clue how long it was going to last. Regarding the equity, diversity and inclusion component, we placed a strong focus on equity in terms of who could be connected because some students, faculty and staff experienced technology issues did not have access to the needed technology at home. Outreach to faculty, students and staff was critical early on. As people got into a rhythm, things got much better. We wanted to create a sense of inclusion. Though people were working and studying remotely, they still needed to have that same sense of belonging to the community no matter where they were. We have six campuses, so it was critical to create a one-college mindset. Throughout this time, we strived to create that sense of human connectivity and belonging.

How does a strong corporate background help fill operational gaps at an educational institution We’re blessed to come from strong organizations that had a lot of programs in place. We learned from those experiences, both good and bad, and applied those when setting things up. We had a clean slate at Central Piedmont when it came to program implementation and development in the equity, diversity and inclusion space.

I think having the experience of previously working at a different institution with a different culture lends itself well to what we’re trying to build at Central Piedmont. www.capitalanalyticsassociates.com

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Ria Nicholls Chief Diversity Officer – Central Piedmont Community College Executive on Loan – Bank of America Our learning plan goes well into 2022 and features different modalities centered around online learning, a speaker series and virtual and/or in person training. We’re placing an initial focus on our leaders; if we want to create the culture we want, it starts with our leaders and what is expected of them. Some of the work we have planned as far as talent development will feature implicit bias and micro aggression training for all faculty and staff at the college.

We are culminating all of these fronts with our “Courageous Conversations” initiative. As leaders complete their training, they’re expected to be part of the training and courageous conversations we are having so we can bring these efforts together and grow as a community. These efforts will be much better in person. All of this is connected to the Equity, Diversity and Inclusion Council. Coming back to campus allows all of this to come alive, so to speak.

A $1 million Bank of America initiative in partnership with Central Piedmont will help students of color complete degrees where they will enjoy small class sizes, relationships with professors and a strong surrounding community,” Deitemeyer said at the time. “At the same time, this partnership is a great example of the higher-education community in Charlotte working together to build more avenues to greater economic mobility,” she said.

Just recently in April 2021, Central Piedmont and Johnson C. Smith University (JCSU) in Charlotte announced the creation of the JCSU Connect program.

Students who enroll in JCSU Connect will take their first two years of classes at Central Piedmont and finish their bachelor’s degree at Johnson C. Smith. Students who remain in good academic standing at Central 160

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Piedmont, completing 60 credit hours, can receive an $8,000 renewable scholarship for two years at Johnson C. Smith. Central Piedmont will launch the program in August 2021. The first cohort of students will transfer to Johnson C. Smith in the fall of 2023. JCSU Connect will provide yet another direct and cost-effective pathway for Charlotte-area students who want to pursue a bachelor’s degree.

Whether it is creating opportunities for students to quickly enter the workforce with the needed job skills employers crave, or ensuring degree completion at a four-year university, Central Piedmont’s seamless pathway approach imbues the college’s program offering and partnerships with businesses and educational institutions alike.

Community needs As the perennial education and workforce development institution in the Queen City, Central Piedmont is keen on partnering with the local business community not only for collaborative academic and training programs but to help boost overall economic mobility for students and residents in Charlotte.

In November, Bank of America, one of the largest companies headquartered in Charlotte, announced a new jobs initiative to benefit minority students in collaboration with Central Piedmont. The $1-million initiative is designed to help students of color achieve degree completion and successfully enter familysustaining careers in high-demand employment fields.

CENTRAL PIEDMONT COMMUNITY COLLEGE OVERVIEW

This initiative complements Bank of America’s efforts to address the needs of individuals and communities of color that have been disproportionately impacted by the pandemic. “Our focus on workforce development has been integral in creating opportunities for local residents, and for that reason we have a history of supporting Central Piedmont,” Bank of America Charlotte Market President Charles Bowman said at the time.

Similarly, JPMorgan Chase & Co. announced a $735,000 grant to Central Piedmont to support economic mobility as well as immediate, pandemic-related needs.

The donation is slated to help bolster Central Piedmont’s student outreach efforts and to continue developing a robust talent pipeline in the Charlotte market. Part of this grant will help the college develop new, fully online training pathways in high-demand IT fields, including cybersecurity, health IT and forensic accounting. The funds will provide for course development, instructional capacity, technology and student support services.

Since 2014, the bank has invested approximately $1.6 million in the college to support high-demand programs, such as truck driver training, electrical vehicle technology training, global logistics and distribution, and a customized training program for workers at Charlotte Douglas International Airport. Approximately 525 students have earned credentials through these programs, the college reported.

“When JPMorgan Chase comes to a city, one of the first things we do is identify community partners that will help us not only connect with the community, but also actually make a long-term and sustainable impact on its residents and their economic mobility. We found a partner in Central Piedmont Community College,” Vice President of Corporate Responsibility Dekonti Mends-Cole said at the time. “Central Piedmont does not just educate students; it also identifies the needs of the surrounding community and provides the tools and the programs to address them. We’re pleased to partner with the college to help the residents of Charlotte and Mecklenburg County thrive.”

Looking ahead After a tumultuous year, Central Piedmont leaders, faculty and students eagerly look forward to the fall semester and beyond. The COVID-19 vaccine points to a fuller, more robust in-person fall semester. Whether remotely or in person, Central Piedmont remains steadfast in its holistic student support, ultimately underpinned by its commitment to improving economic mobility in the Queen City. As one of Charlotte’s treasured assets, Central Piedmont is well known as a workforce partner and as one of the key contributors

Central Piedmont students can choose from multiple programs that provide direct-transfer pathways to four-year universities.

responsible for Charlotte’s prosperous economy. It will be a major presence advocating for equitable access to opportunities for all community members in a postCOVID world.

In the midst of the challenges posed by the pandemic, Charlotte was rocked but not broken thanks to its strong foundation; a foundation rooted in community service and public-private collaborations, for which Central Piedmont Community College remains a unifying partner. Moving forward, Central Piedmont’s relationships and collaborations with industry and higher education partners, mixed with the continued alignment of academic and training programs to deliver the skills desired by Charlotte’s diversifying economic sectors, will be crucial components of the pandemic recovery process.

Capital Analytics would like to thank Central Piedmont Community College for its contributions in compiling this chapter.

To learn more, visit their website at: www.cpcc.edu

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Education: Charlotte’s prestigious universities, colleges, trade schools and K-12 institutions remain strong but innovation and adaptation will be the name of the game for the city of Charlotte and the surrounding region to remain a vibrant center that continues to grow.

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Sea Change: Emerging from the pandemic, education already looks very different Charlotte’s education sector underwent a sea change in the last year. School life is almost unrecognizable compared to the pre-pandemic era, becoming more accessible in some aspects, and less accessible in others. Universities and colleges have spent the last year transitioning to the online learning model, where lectures are delivered virtually.

When the COVID pandemic caused authorities to implement stay-at-home orders in March 2020, schools and colleges were a major sticking point. On one hand, the mass congregations of students were a breeding ground for the spread of the virus, but on the other, legislators were asking themselves if they could afford disruption to arguably the most vital economic pillar.

One year later, in-person classes are set to resume on a broad scale. Although many students are eager to return to class and normality, at least some parts of the virtual and digital learning structure are here to stay.

Landscape The greater Charlotte area is home to some of the most prestigious universities in the country. Davidson College is ranked 15th among National Liberal Arts Colleges, Queens and Winthrop are tied at 13th in 164

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Southern Regional Universities and Catawba College comes in seventh in Southern Regional Colleges.

Ranked 12th nationally and ahead of three of the eight Ivy League schools, Duke is just a stone’s throw from Charlotte in Durham. In 2017, the universities in Charlotte awarded almost 13,000 degrees, with the most degrees awarded from University of North Carolina (UNC) and Central Piedmont Community College, itself among the Top 20% of community colleges in North Carolina in a variety of categories.

Business accounted for the largest single awarded segment, awarding 1,372 degrees and reflecting Charlotte’s position as a business and financial hub.

While 7,621 degrees were awarded to women during that year, 5,363 were awarded to men. The vast majority of graduates were white, accounting for over 55% of all degrees awarded, while about 24% of degrees were awarded to Black graduates, less than 10% to Hispanic or Latino students and less than 5% to Asian students.

Diversity and equity have become a hot topic among Charlotte’s educational institutions after the country faced race-fueled civil unrest in summer 2020. But added to the mix now is COVID-19, which has been shown to have caused an effect called the “COVID slide,” whereby just 10% of 3- to 5-year olds ( )

EDUCATION INTERVIEW

Small advantage Smaller size allows for more agile decision-making compared to bigger universities

Fred Whitt President – Lenoir-Rhyne University How did the university evolve in the past year?

Just like at many universities, the past months have been incredibly challenging. It is always difficult to deal with uncertainty and ambiguity, and a worldwide pandemic creates both of these issues and more. We had an incredibly positive fall semester. Our enrollment remained strong and we developed a comprehensive COVID infection and disease prevention and control plan to guide our approach. A university-wide task force developed guidelines and procedures, called “Protecting our Den,’’ which included pre-arrival and surveillance testing during the semester. As a result through October, we had one of the lowest numbers of positive COVID cases in the region. Our classes were delivered in a hybrid format so each student was in faceto-face and online for each of their courses. We used a flipped classroom model, where you do a lot of course content online, and the face-to-face classroom time was utilized for more engaging activities. This included working with groups, problem-solving and content application. This approach allowed us to physically distance in the classroom by having no more than half the classes meeting at any one time. We followed that model throughout the semester, and will continue into the spring semester. While it’s a change, it was best given the cards we were dealt.

What are the advantages of being a small school in terms of communication?

We have about 2,700 students. About 900 of those are graduate students and, of course, in addition to being here in Hickory, we have a graduate center in Asheville with about 200 graduate students. We also have the Lutheran Theological Southern Seminary in South Carolina. One of the things that I noticed right from the get-go is how much more nimble we can be compared to my experiences in state universities.

We’re in a unique position to pivot in a short period of time and adapt to change. Our mission is to meet the needs of the community at large, including business, industry and healthcare agencies. For example, getting a new program approved at a state university can take up to two years even when a proposal leaves the local campus. At our type of university, we have as few as two to three months for approval once the proposal is finalized on campus.

In terms of COVID, rather than making decisions unilaterally, we collaborated with our community partners and allies who advised us regarding our plans and implementation. We also stayed in continued communication with the NC Department of Health and Human Services, the CDC and other medical contacts affiliated with Lenoir-Rhyne. www.capitalanalyticsassociates.com

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EDUCATION OVERVIEW

As educational institutions plan a return back to the classroom, a hybrid approach is likely to remain in place.

Educational Attainment: Highest level of education among people aged 25 years and older.

North Carolina

Charlotte area

Count 37.8%

Higher Degree1

48%

H.S. Diploma2

No H.S. Diploma2 0%

660k

41.6%

733k

46.2%

14.2%

193k

12.2% 10%

20%

30%

40%

50%

Count number of people in category 1

Post-Secondary Degree

2

H.S. = High School Source: Statistical Atlas

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( ) enrolled in preschool prior to the pandemic were found to have received a robust replacement and the results were even more impactful for disadvantaged children and families. In Mecklenburg County, the Urban League is tackling inequality through workforce development, financial literacy, education and improved living standards.

Challenges The COVID-19 pandemic created some unique challenges for educational institutions to navigate through 2020 and into 2021. Some schools initially extended spring break and encouraged students to remain off campus. Others, like UNC Charlotte, announced an almost immediate transition to remote instruction where possible. Teleworking was encouraged for staff at numerous institiutions. The

EDUCATION OVERVIEW

The CARES Act allocated almost $14 billion directly to institutions of higher education Charlotte-Mecklenburg Schools (CMS) District tried to move spring break around, hoping to lessen the impact for students, but classes were ultimately canceled after the stay-at-home order was issued.

As the pandemic wore on, Charlotte-area schools prepared for re-opening both physically and virtually for the fall semester but faced the hurdle of rising COVID-19 cases in Mecklenburg County. A hybrid model of in-person and online classes was established at most institutions, with students required to wear masks. CMS planned pre-recorded virtual graduations for the Class of 2020. A year on, into March 2021, the return to normalcy and what that ultimately looks like is still being considered by schools. Key challenges include learning loss caused by a year without normal schooling, teacher and parent burnout and how to test fairly for students who have been under huge emotional stress for the better part of a year.

The disruption to classes, of course, had a financial

EDUCATION OVERVIEW

impact on universities. Students with radically changed circumstances began to drop out of college and university, others were given financial aid by the institutions and others delayed enrollment for a year. Income from student housing also fell, given that students were unable to return to dorms. Higher education began to evaluate its assets as income dwindled in an attempt to generate some liquidity that would see them through the pandemic. Greensboro’s Guilford College cut almost half its 41 academic majors and 30% of its faculty. Toward the end of the year, colleges and universities were facing significant fiscal 2020 declines in revenue, largely from refunded courses and cancelled programming.

As colleges and universities battled funding shortfalls, some help arrived in the form of the federal government’s CARES Act. The act that was signed into law on March 14, 2020 provided almost $14 billion allocated directly to higher education institutions, to be used for added expenses when shifting classes online and providing aid to students. Around 75% of the funds available were earmarked for Pell Grant recipients. During the second round of funding, universities received an additional $23 billion and in 2021, lobbyists returned for a further $97 billion.

The latest package ultimately allocated $40 billion in funding.

Despite these challenges, just a handful of institutions were forced to permanently close – although storm clouds could be brewing on the horizon as colleges throughout the country saw enrollment declines beginning in the fall semester. Data from the National Student Clearinghouse Research Center show that undergraduate enrollment dropped by 4%

The collaborative spirit between private and public institutions includes efforts to streamline the student transfer process.

CONSTRUCTION EDUCATION OVERVIEW

William Downs President Gardner-Webb University

How was Gardner-Webb University positioned entering 2021?

We are a faith-based institution, our institutional motto is “For God and Humanity,” and we have built our academic programs around serving the people of the foothills and in Western North Carolina. Despite all of the uncertainties of COVID-19 and the financial stresses it has placed on families across our region, our entering freshman class in August of 2020 was 17.7% larger than last year’s entering freshman class.

Our finances are in good shape and we are sitting on zero positive COVID-19 cases even though we never closed.

across the board in September 2020 compared to the same month a year earlier. Perhaps more concerning, there was a 16% decline in the overall number of firstyear students and a 23% drop in first-year students at community college. These results were gloomier than the expected 2.5% overall dip.

As virtual learning becomes more widespread, students are trying to decide whether the expense of some degree courses is worth it. For some, the significant fees paid were not so much for the classes, but for the opportunity to meet business leaders, network and obtain high-level internships. For MBA students, who make up a significant chunk of Charlotte’s enrollments, the social component of the classes is one of their biggest advantages. They must now weigh whether it is worth paying six-figure sums for a degree while losing potential income. ( )

What contributed to the enrollment spike?

The historic disadvantage of a small school in a small town such as Boiling Springs suddenly became our greatest advantage. We sit on 225 sprawling acres in a one-stoplight college town, with a 13:1 student-tofaculty ratio. We can construct a nice, secure bubble here. This is a safe, healthy, good place to go to school.

We also rolled out some new, innovative financial incentives to help families of college-ready high school seniors choose Gardner-Webb. We created the Foothills Commitment, in which we guaranteed to halve tuition for every admitted student from Cleveland, Gaston and Rutherford counties who wanted to live on campus, amounting to $15,620. We saw a 65% increase in enrollment from these three counties. We have now extended that Foothills Commitment to Lincoln County, which is why we believe that we are going to have even greater success there by the fall of 2021. We also launched what we call the “Transfer Your Future to Gardner-Webb” initiative. We knew that there were a number of students out there in large public universities who might not have felt comfortable going back to a large institution. As an incentive, if a student transfers from an accredited four-year university and comes to Gardner-Webb, we will pay for your room and board until you graduate. www.capitalanalyticsassociates.com

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®

oundtable:

Future of education What will classrooms look like post-COVID and what will be the key areas of focus? Local leaders provide their insights.

Sharon Gaber

Chancellor University of North Carolina at Charlotte

What are some of the prevalent challenges that universities are tackling?

We continue thinking about accessibility and affordability and about the pivotal role that we play in improving the region’s and state’s mobility outcomes. We introduced the 49erNext program in October 2019 in partnership with Central Piedmont Community College. We’ve expanded that pipeline to five other community colleges.

We want individuals who enter community college to be able to easily transfer to UNC Charlotte and continue their education seamlessly. We receive the largest number of transfer students of any of the 16 universities in the UNC System. The UNC System has not raised tuition in five years and we will continue to be accessible and affordable as we offer a quality education because every metro region, including ours, has a strong need for individuals with advanced degrees. We want to continue to shape the workforce of the future.

What is your 2021 outlook for the university?

Our outlook is strong. Now with more than 30,000 students, UNC Charlotte is the second-largest school in the UNC System. We are North Carolina’s only urban research university in the largest city in the state and uniquely positioned to address the complex challenges and opportunities facing our dynamic region.

The University’s future will be largely shaped by our efforts to develop future leaders for the workforce and our communities, conducting leading research that supports our communities, while remaining accessible and affordable to those in our region and across the state.

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Charles Iacovou

Dean of School of Professional Studies and Vice Provost of Charlotte Programs Wake Forest University

How has Wake Forest developed in the Charlotte educational sector?

Wake Forest first joined the Charlotte education community about 25 years ago and a lot of progress has been made since then. The very first program we offered in Charlotte was our MBA. It is now ranked 22nd nationally

by US News and World Report. Today, Wake Forest offers a diverse set of programs to the Charlotte community.

We offer undergraduate and graduate courses, including graduate degrees in business and executive education programs, as well as immersive exploration programs to high school students.

What is the outlook for Wake Forest and Charlotte’s educational system?

Somewhat unexpectedly, Wake Forest had a record enrollment year in 2020 during the pandemic, both in terms of undergraduate and graduate students. And in 2021, we saw the highest number of undergraduate applications we’ve ever received. We’re already experiencing a lift in demand above and beyond the 2020 record. Overall, we feel quite confident in our own situation. Emerging research at the national level indicates that students, especially adult learners, are more likely to go back to graduate school and further their education because of the pandemic. They want to take time off from work until the market opens up a bit more for them. Like the many other great higher education institutions in Charlotte, we expect that we are likely to benefit from that lift for a while. The desire of people to go back to school because of the pandemic is something that we’re ready to support as applications continue to increase.

EDUCATION ROUNDTABLE

Daniel Lugo

President Queens University of Charlotte

What is your take on the pandemic’s impact on college tuition?

There has clearly been a trend toward questioning the long-standing tradition of two pricing structures: one for private institutions, one for public institutions.

We believe there is going to be more variability and differentiation. The demand is increasing for colleges and universities to demonstrate value and the return on investment. We feel strongly about the return on investment of a great Queens education and we can demonstrate it. Our first report of the graduating class of 2019 found 97% are working or in graduate school. We have an educational approach that is built on the distinctive liberal arts foundation, combined with meaningful professional access and professional degree programs. We extend into the professional world with the requirement of multiple internships and partnerships with the civic, corporate, and nonprofit communities in Charlotte.

We feel good about sustaining our market price where others are going to have a harder time defending their price point.

How do you anticipate the state’s education plan will evolve?

North Carolina understands the importance of higher education. We have one of the strongest state systems of education We are confident that even after the pandemic people will understand that higher education is the answer to economic problems, not the challenge.

Our solutions go through the roads of higher education which fuel our nation’s talent pool.

Cheryl Richards

President – Charlotte Campus Johnson & Wales University

What might be the primary changes to higher education for the near and long-term future?

Colleges and universities will need a mix of delivery modalities: online, in-person, hybrid, or flex-delivery.

Not only has the pandemic pushed institutions to think differently about learning modalities, but our incoming students are of a generation that expects technology as a way of learning. Even before COVID hit, colleges and universities were trending in this direction and the pandemic accelerated that. Institutions that don’t have the ability to create hybrid and flexible options for learning, integrating online and experience into their curriculum, I think will struggle going forward.

The other thing I’ve seen as a result of the pandemic is a renewed focus on partnerships. We’ve seen institutions consolidating or merging as a result of limited fiscal resources and others trying to fine-tune their value proposition to attract students in a crowded market space.

What is your outlook for higher education?

Nationally, you’ll continue to see institutions make individual choices on how to operate in the current academic year. Many will make choices about who is invited to return for on-campus classes and who is not.

For Johnson & Wales, we decided that we would continue on a similar path to that we had in the fall, which is to bring back a select group of students – new freshman, students with lab courses, those on internships in the area, and graduating seniors who will benefit most from an in-person experience. We will continue to provide the physical distance on campus and our hybrid learning modality. www.capitalanalyticsassociates.com

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EDUCATION INTERVIEW

Public partner Partnership with Charlotte-Mecklenburg Schools is an opportunity to improve upward economic mobility

Clarence Armbrister President – Johnson C. Smith University pre-K initiatives all the way through high school, where Johnson C. Smith University is looking to take up the mantle and identify students who can take advantage of a four-year education and not have their finances be a reason why they cannot complete their education or have to drop out. We are in discussions with local partners that developed pre-college ready programs to identify those students who are interested in going to college and make sure we can secure funding either through scholarships or otherwise for those students to be able to attend our university.

What is the vision behind the university’s work with the public school system?

In 2018, Charlotte was still reeling from ranking 50th out of the country’s top largest 50 cities in the Chetty Study, which focused on upward economic mobility metrics.

It was a rude awakening considering all the great things going on in Charlotte. The local business community truly leaned into that and has really taken that bull by the horns. It has been really invested in closing that gap as the study found that the Queen City’s most impoverished residents only had a 4% chance of moving from the lowest quintile to the top quintile. In terms of working with the Charlotte-Mecklenburg Schools, the business community has done significant work related to pre-K education, helping develop some funding streams and working with the community to develop 172

| Invest: Charlotte 2021 | EDUCATION

How have internships played out for the university in this new landscape?

One of the visions we have for our institution is for us to really lean into the experiential learning aspect.

We would like to see our curriculum integrated with learning opportunities for our students so that by the time they graduate, they have two or three significant external experiences they can utilize to determine their fate once they leave here. While these efforts were interrupted by COVID-19, we were able to successfully transition these practices to the virtual space.

What are your main priorities for the new school year?

Our main priority is to get our students back on campus and to do so safely. We have worked since March on that, doing significant planning. We have not been put to the test as much as others that are open but we believe we are well-prepared. We are certainly better prepared than we would have been had we opened in September. For Johnson C. Smith University, we think we made the right decision in not returning students to the classroom in the fall. As we look to the spring, we are ensuring that we continue having these discussions with the business community about the opportunities to invest in our university.

EDUCATION OVERVIEW

( ) Unique opportunities While there are undoubtedly challenges to face, there are also opportunities. One of the major areas that COVID shone the spotlight on was clinical research and the difficulty in carrying out clinical trials on a normal basis. With billions of dollars and resources pumped into COVID trials, vaccines were developed in record time to the point where people questioned their safety given that an average clinical trial takes six to seven years to complete. But it emerged that many delays in clinical trials are not related to safety, but rather to bureaucracy, lack of subjects and lack of funding, leading to more solutions in this area.

Declines in revenues for higher education also will drive the need for further innovation. Blended learning is likely to increase, creating even more need for better and more advanced tools. Asynchronous platforms such as Canvas, Blackboard and D2L as well as synchronous platforms such as Zoom and Teams will be relied on heavily going forward. Online education will be an important source of new revenue for institutions, which will no longer be constrained by classroom sizes, many experts believe. Partnerships are also being evaluated as schools move away from all-inclusive revenue-share models.

Universities are also looking to leverage their student housing to bring in more revenues. A residential housing development that was started in January in University City by UNC Charlotte will cater not only to UNC Charlotte students but also will serve as a co-living space for other residents. The 188-unit Aspen Heights development will require a $60 million investment and will be one solution to the affordable housing crisis many big cities face.

Trade schools Perspective: Jobisready In Charlotte, college and university not the only path to

Lisa List President, Charlotte Campus – Chamberlain College of Nursing From what our students tell us, many of our students get multiple job offers. Some students report receiving offers before they graduate. We have had students who have gone right into the ER, into ICU, obstetrics, pediatrics, mental health. Our community especially needs more mental health resources. The increased stressors of the pandemic have stretched already thin resources for our community. We’ve also developed great relationships with our local healthcare facilities. We receive very positive feedback about our graduates. We are highly proud of our nurses, how they are going into the frontlines, especially now because it is so needed.

enhanced education. Vocational training also is strong across the city’s trade and technical schools. Popular programs span a breadth of disciplines, including Medical Assistant, HVAC Technician, Accounting, IT and Welding. Technical and trade schools in Charlotte include Southeastern, the Aviation Institute of Maintenance, ECPI and Empire Beauty Schools.

Several schools also offer hybrid, evening and weekend and online courses, such as South College, Daymar College and Miller-Motte Technical College. According to the Trade and Industry Development publication, North Carolina’s 58-campus community college system is the nation’s third-largest and a national model for customized workforce training.

As property prices rise and real estate development

Carol Spalding President Rowan-Cabarrus Community College

What has been the impact of short-term training programs and fast-track certification?

It’s true that more education will lead to higher wages and a better quality of life, and we are big proponents of education as the best investment that anyone can make. In addition to the technical programs that will be housed in the Technology Education Complex, one of our largest programs is our transfer program. RowanCabarrus has 15 transfer agreements that provide direct transfer pathways into over 60 baccalaureate degree programs in the North Carolina university system and other independent colleges. We also have the Learn Local, Grow Local transfer program with Catawba College that encourages students to stay in the area and complete their undergraduate degree. We also know that about half of the students who graduate high school do not have a plan for their next steps after graduation. We are working hard to connect with these students and help them enroll because we know that a post-secondary degree or certificate is necessary for the majority of current and future high-wage jobs.

What are your main near-term priorities?

We will continue to improve and expand our online learning offerings and transfer programs. We know our students and communities trust us to help build a more prosperous community. In the next few months, the Advanced Technology Center will be completed.

This facility will allow the college to offer expanded mechatronics offerings, cyber-physical security, and a comprehensive plastics program to prepare our students for Industry 4.0. We are one of the first community colleges in North Carolina to be distinguished as a National Center of Academic Excellence in Cyber Defense (CAE2Y), which is a major innovation for the college and resource for the community. Additionally, we will continue to work with the business community to develop apprenticeships and internships and expand our short-term training opportunities to meet their immediate workforce needs.

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Community colleges will be instrumental in helping displaced workers pivot into new career paths.

City of Charlotte: Households with a computer:

Households with a broadband internet subscription:

94%

87.4%

Source: U.S. Bureau of Labor Statistics (2015-2019)

EDUCATION OVERVIEW

skyrockets, tradespeople are in higher demand than ever, and universities are responding. Central Piedmont Community College provides training in criminal justice technology, welding and medical assisting.

The Carolina’s college of health sciences is addressing the medical talent pipeline deficit with certificates in medical laboratory science and associate degrees in nursing. And to capitalize on the booming demand for online services, Charlotte has several coding bootcamps for a range of budgets and schedules.

Workforce preparation Despite an emphasis on trades, the skilled labor force is not growing fast enough at the current pace and authorities and organizations in Charlotte are working to address concerns of a pipeline deficit. Advances in automation and AI are likely to exacerbate this issue, meaning the importance of employer-provided training is more significant than ever. Most U.S. highschool graduates are unlikely to complete a fouryear education, meaning community colleges and workforce training programs play a crucial role, as do government-sponsored programs.

The city of Charlotte has partnered with the Urban League of Central Carolinas to launch the Renewable Energy and Efficiency Workforce (RENEW) training Program, which provides paid training in the area of HVAC and electrical. UNC Charlotte offers continuing education certificates that can be completed in three to four months and Central Piedmont provides company-tailored free training support in the areas of manufacturing, intensive technology, customer service and data processing, warehousing and distribution, and air courier service. In the private sector, Red

Scott Bullard President Pfeiffer University

Private versus public school enrollment:

Students in private schools in grades 1 to 8 (elementary and middle school):

Mecklenburg County

North Carolina

11.7%

11.4%

11.5%

9.1%

22.8%

19.1%

13,602

What were some of the university’s milestones in the past year?

On March 17, 2020, we went to online learning due to concerns related to the emerging pandemic. We didn’t force the students to go home, so about a quarter of our students stayed on campus in March and April and we finished out the semester with zero COVID-19 cases. We also began a recruiting campaign for the fall semester called “Safer in Stanly.” We have a beautiful main campus with historic buildings, a lake, and lots of wooded areas. It provides students a great opportunity to participate in outdoor activities.

Since the last time we talked, we have opened a 41,000-square-foot four-story campus that houses our master’s in physician assistant (PA) and occupational therapy (OT) studies. The campus is in the middle of downtown Albemarle, where community morale and real estate prices have exploded as a result.

People are referring to it as the “Pfeiffer effect.” We’re trying to create a new academic village there and it’s phenomenal. A couple of restaurants have opened even during the pandemic and the renovation of a historic hotel is underway. The hotel is tastefully being morphed into student housing and there’s even rumors of a rooftop bar.

What updates to the school’s curriculum have been implemented?

Everyone who comes to study PA or OT will graduate with a certificate in rural medicine. So, when they apply, they need to write a short essay saying why they’re interested in rural medicine. Many of the grants we’ve received for the launching of that program were because we wanted to train people uniquely to deliver medical care in a rural context.

The certificate in rural medicine is really crucial. We need to continue to build attractive facilities and be innovative with our curriculum and trust that we’re going to continue to attract the best and the brightest.

I think we’re at the cusp of something truly amazing.

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Students in private schools in grades 9 to 12 (high school):

6,379 Students in private undergraduate colleges:

13,590

Source: City-Data.com

The combination of robust public institutions and private, usually smaller institutions in Charlotte afford students a bevy of options.

EDUCATION OVERVIEW

Ventures CEO Ric Elias established the Road to Hire program in 2013 as a way to train local high-school graduates for high-paying tech jobs. According to the Road to Hire website, 30,000 young adults in Charlotte are neither working nor in school; it’s expected that 1,700 ninth grade students in Charlotte-Mecklenburg will not graduate high school; and the cost of college has risen eight times faster than wages since 1989.

Also helping to address the issue is Charlotte Works, a comprehensive platform that brings together career services and advice with market data and training providers.

K-12 In its favor, the Charlotte metro area has a stellar K-12 school system. Thirteen of the city’s high schools are ranked within the Top 5% in the country. Cato Middle College High is No. 1 in the city and ranked 217

nationally with a graduation rate of 98%. Lake Norman Charter is second in Charlotte and 402nd nationally and has a college readiness ranking of 72.4. The Central Academy of Technology and Arts is fifth in Charlotte and 554th nationally, boasting a 100% graduation rate.

But K-12 education has also suffered from significant disruption in the last year and a sigh of relief was breathed when in March the North Carolina Board of Education adopted guidance from state health leaders for schools to open for in-person learning “to the fullest extent possible.”

For some students, though, the cost of home learning itself is prohibitive. A digital divide of 14% exists in Charlotte. That means that this percentage of households have no internet access at all, which is concerning when seven in 10 teachers assign homework that requires internet access and 80% of job opportunities are posted exclusively online. This has been helped by CARES Act funding, of which $3.25 million was earmarked to support Access Charlotte, an organization that invests in public Wi-Fi networks and provides funding to schools for hotspot connectivity.

The importance of the K-12 system has been in sharp focus during 2020 as the priority list for vaccination was drawn up. On March 8, teachers nationwide became eligible to receive the vaccine although they had already begun in North Carolina after the governor announced the priority group would be eligible for the vaccines from Feb. 24.

Looking ahead The economic landscape of any city or country is influenced by the quality of education it provides. In the last year, educators in Charlotte and around the world have been challenged like never before with the burden of continuing to provide quality education for the future population. There have been significant learning losses and these will have to be recovered, whether through summer schools or a re-evaluation of the entire exam process.

Despite the challenges, JLL says Charlotte is poised for strong growth in 2021, bolstered by its ability to attract and retain local talent. Charlotte’s prestigious universities, colleges, trade schools and K-12 institutions remain strong but innovation and adaptation will be the name of the game if the city of Charlotte and the surrounding region want to remain a vibrant center that continues to grow. And if higher education institutions want to tempt students back into the classroom, affordability should be addressed in the face of mounting student debt across the nation. www.capitalanalyticsassociates.com

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Educational attainment by county in the Charlotte area: Bachelor’s Degrees:

Very Advanced Degrees:

Percent of population 25 years of age and older with a bachelor’s degree or higher.

Percent of population 25 years of age and older with a professional or doctorate degree (e.g., MBA, PhD, or MD).

43.1%

Mecklenburg 33.6%

Union

1

Mecklenburg

46.1k

2

South Atlantic

522k

United States

13.0M

South

30.3%

64.8M

32.9%

United States

#

289k

30.5%

Charlotte South Atlantic

Count

3.6%

N Carolina

29.0%

1.94M

Cabarrus

28.6%

36.2k

South

28.2%

22.5M

Cabarrus

26.5%

865k

York

25.7%

29.2k

5

Iredell

13.7k

6

Lincoln

1.4%

S Carolina Iredell

23.3%

Lancaster

192k 40.2k

2.5%

Charlotte

81.2k

2.5%

S Carolina 4

2.45M

2.9%

N Carolina 3

3,229

2.4%

Union

1

7.13M

3.3% 3.1%

48.1k

#

24.1k 1.50M

3.5%

29.5%

York

Count

2

2,810

3

1.9%

3,138

4

1.9%

2,173

5

770

6

2.2%

Gaston

19.8%

28.7k

7

Lancaster

1.4%

803

7

Lincoln

19.7%

11.0k

8

Gaston

1.4%

1,961

8

17.6%

Rowan

14.4%

Chester 0%

10%

20%

30%

16.7k

9

Rowan

1.0%

962

9

3,199

10

Chester

1.0%

218

10

40%

0%

1%

2%

3%

4%

Count number of people in category

Count number of people in category

# rank of county out of 10 by percentage of population 25 years of age and older with a bachelor’s degree or higher.

# rank of county out of 10 by percentage of population 25 years of age and older with a professional or doctorate degree (e.g., MBA, PhD, or MD).

Source: Statistical Atlas

Source: Statistical Atlas

Tourism, Arts & Culture: The pandemic decimated the tourism and travel, arts and culture sectors in 2020 but the Charlotte region remains one of the country’s preeminent tourist destinations. As the vaccination campaign continues, people are looking forward to a return to travel. In fact, many predict that the second half of 2021 and 2022 will be recordbreaking.

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Horrible aberration: Optimism is seeping through the cracks of COVID, pointing to brighter days ahead Charlotte is one of the preeminent tourist destinations in the South. It has the Atlantic Ocean on one side and mountains on the other, and the city’s airport has the added benefit of being a hub. A vibrant local economy has only served to increase its attractiveness as a destination. Charlotte offers professional sports, fabulous restaurants and the sort of cultural institutions commensurate with an economically dynamic city in 21st century America.

While Charlotte does have a lot going for it, it is no surprise that 2020 was a dismal year for tourism, arts and culture, not just in the region but across the entire world. While many industries were able to adapt to survive COVID-19, the pandemic struck at the heart of the social activities that are the lifeblood of this sector.

Planes were grounded, museums were closed, sports events moved online, and to go to a restaurant was to risk infection. People stayed home. Thankfully, the vaccination drive continues apace, and all of the draws that work in Charlotte’s favor are ready to be explored in 2021 and beyond. “We are definitely trying to capitalize on any and all local activities and groups,” said Staphon Meadors, dual assistant general manager at the Hilton Garden Inn/Homewood Suites by Hilton South Park in 180

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an interview with Invest:. “The government is slowly starting to allow sporting events to open up, fans are starting to come back and as you know, we have some sporting teams in the area, with the Panthers and the Hornets. Basketball will be right around the Christmas season for the NBA, and Charlotte has a new MLS team that is going to start next year. Those are definitely opportunities for us to take advantage of.”

Performance and trends Of all of the sectors of Charlotte’s economy, none took quite as a direct hit as a result of COVID-19 than tourism, arts and culture. Discussion of how the industry performed in 2020 must take into account the effects of the pandemic. The numbers were down across the board: according to Visit NC, the state in 2020 saw a nearly 50% drop in visitors over the year before; as of November 2020, that comes out to $9.5 billion lost in visitor spending. North Carolina is an often-visited state for tourists—arts, recreation, entertainment, accommodation and food services were 18% of the state’s GDP in 2019.

Some of its traditional draws helped cushion the blow of the pandemic. North Carolina is, after all, an ( )

TOURISM, ARTS & CULTURE INTERVIEW

Rocked Tourism and hospitality took a devastating blow during the pandemic, but plans are emerging for success in a post-COVID era

Tom Murray CEO – Charlotte Regional Visitors Authority What were your major takeaways from operating in such an atypical year?

Our industry has really been rocked, which affects our city dramatically. One in nine people in our community works in the hospitality industry. The hotels and the restaurants certainly felt the damage, particularly in the Uptown market. Hotels have been 60% below their 2019 levels. It’s really difficult to operate in those environments. It has a knock-on effect on the restaurants that would normally serve hotel guests and convention guests. Obviously, we have not had meetings in the convention center, although we’re working on events for the spring. The last 10 months or so were really about trying to survive, take care of our employees, work with our teams and others to prepare for a post-pandemic environment.

That takes multiple shapes. We’ve been investing in our infrastructure, ensuring it is up to par with the latest and best technology to protect our customers when they arrive again.We’ve purchased equipment that helps sanitize, and added systems to provide near hospital-grade air quality to our meeting rooms. Most recently, we invested in thermal scanning technology that allows us to check the temperatures of large numbers of attendees coming in at any given moment.

We’ve also earned a number of certifications, among them the GBAC accreditation, which relates to our practices that help mitigate a variety of bio risks.

What will be the short-term ripple effects from this experience?

Our overall tourism tax collection is down, which is a percentage of hotel sales, prepared F&B sales and a rental car tax. Those markets are all down dramatically, although restaurant sales have recovered faster than hotel sales. Our city has been wise and careful with its planning and particularly in the way that we invest

in our infrastructure. The assistant city manager and the CFO of our board have great confidence that the tourism tax funds are in great shape. They are in the position not only to make our debt service obligations in the future years but also invest in future projects.

That is in part because we use long-term planning, looking at 25-year trend cycles.

Because of the conservative way that we forecast future revenues, including considerations for a black swan event, we feel like we had good fiscal planning and we are consequently well prepared. That is not to say that the momentum of the successes that we have been having as of late was not interrupted, but 2017, 2018 and 2019 were all record years for tourism and tax collection. Those were, in fact, three of seven record years in a row. www.capitalanalyticsassociates.com

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Douglas Hustad General Manager Omni Charlotte Hotel

How did the hotel build up its resilience to tackle the pandemic-forced downturn?

2019 in Charlotte was one of the best years in the history of not only this hotel but also most hotels in the city.

2020 was projected to be even stronger prior to COVID setting in. At the end of March, we temporarily closed the hotel and reopened at the beginning of June. We had a relatively decent summer, with good business on the weekends. During the week, most business travel and group business virtually ceased to exist, which has continued with the exception of small business activity that fits within the North Carolina state guidelines. On the weekends, our featured rooftop outdoor pool and large screen helped drive business in the summer before the colder weather set in.

How did your hotel pivot to highlight safety and security more than the experience factor?

Although Omni as a brand always had maintained a solid reputation regarding cleanliness standards, we went from selling an experience and location to taking our cleanliness standards to a whole new level with the pandemic. We implemented a “Stay A Part of…” campaign as part of our culture and brand. It includes heightened awareness of our protocols through visibility: safe social distancing, wearing face masks and limiting capacities to state regulation.

What is your near-term outlook?

While we look with encouragement toward the deployment of the vaccine, it will take a few months as its distribution advances to recover consumer confidence on both the corporate and leisure fronts. We anticipate business travel is not going to be what it was in 2019. It’s certainly going to take a while for people to build confidence in business travel. Charlotte has an extremely strong business travel segment. Getting those companies that have travel bans or have been suggesting people stay at home to be confident about their associates traveling is going to take time.

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( ) outdoors destination, and its attractions have made it the eighth-best state to visit in 2021. People like to go to the beach in the summertime and the mountains in the autumn — the main draw of the state and also the Charlotte region. Importantly at this time, these are activities that can generally be achieved while still abiding by COVID-friendly safety protocols. That said, events that are major tourist draws were put on hold: Tuck Fest 2020, canceled; Taste of Charlotte 2020, canceled too; the Novant Thanksgiving Day Parade 2020 went virtual.

There is a fear that many elements of the industry, from restaurants to hotels, will not be able to survive, or at least will not be back to full strength for another year or two after the population is vaccinated and people begin traveling again. It is predicted that leisure domestic travel will recover at a faster clip than business travel, international travel, and travel oriented around large events with thousands of people.

The pandemic year saw the government — local, state and federal — step into the tourism industry on an unprecedented scale. When North Carolina Gov. Roy Cooper issued stay-at-home orders requiring state residents to remain in their domicile from 10 p.m. to 5 a.m., he also issued rules relating to the hospitality sector: restaurants would have to close by 10 p.m. and alcohol could not be served anywhere after 9 p.m. The state tourism board also played its part by inaugurating a program, Count on Me NC, which sought to educate owners on how to operate their businesses safely. The state was able to receive $15 million in grant funding from the CARES Act toward these efforts. In many cases, business owners rolled with the punches, pivoting the nature of their business in order to survive. This was most clearly seen in the restaurateurs who became retailers: instead of having customers come in for a meal, they began specializing in takeout options.

State officials are working to secure more federal stimulus money as it makes its way through the machinery of state. President Joe Biden’s signature $1.9 trillion American Rescue Plan Act has allotted $5.3 billion for the state government and nearly $9 billion for North Carolina overall. Wake and Mecklenburg counties will receive $215 million each, while the city of Charlotte will receive $148 million. State representative John Bradford (R-Mecklenburg) has introduced two bills aimed at using some of this cash to help hotels. The industry can certainly use the help. In North Carolina, between March 2020 and January 2021, sales at hotels dropped by 19.5%; at restaurants it was slightly better, a drop of 16.5%, but bars — likely due to that stay-at-home order — were down by 28% in that span of time.

TOURISM, ARTS & CULTURE OVERVIEW

The local government, while under stress, is doing its part too. The Charlotte Regional Visitors Authority had increased its rainy-day fund to $18 million in the summer of 2019 only to have it reduced to $10 million by summer 2021. This is largely due to a reduction in revenue. The visitor authority relies on taxes on hotel rooms, restaurants, rental cars, and on fees from the renting of city-owned buildings, and none of this money has been forthcoming.

Not surprisingly, the airline industry in Charlotte took a hit, with reduced traffic and service, canceled flights and full-fledged crisis engulfing the airline industry. As a regional hub, the Charlotte Douglas International Airport (CDI) has fast-emerged as one of the pivotal travel nodes in the United States. With 46.4 million passengers in 2018, it was the 32nd-busiest airport in the world based on passengers and the seventh in the world based on aircraft movements. The numbers for 2020 are harrowing: CDI had 27.2 million passengers last year, a record 46% decline over 2019’s 50.2 million. In April 2020, the lowest point of the lockdown, the airport only had 340,265 passengers.

These numbers began rising soon thereafter, albeit at a reduced rate than in other years. There were over

2 million passengers in December and 4 million in January. This rise coincides with the advent of mass vaccinations, so there is cause for optimism.

Still, the revenue losses have been staggering. By way of illustration, Charlotte’s most popular route is to Orlando International Airport. It’s revenue from this route in 2Q19 was $47.89 million. In 2Q20, this had fallen to $6.8 million. Smaller regional airports have been affected too. In August 2020, American Airlines suspended service to two airports in the Carolinas — Pitt-Greenville Airport and Florence Regional Airport — leaving these destinations without a major carrier.

There is a silver lining for CDI. For one, its numbers, hovering at about a 50% reduction, are not as bad as those of many of its counterparts, which have seen reductions of up to 60 to 70 percent. Additionally, the airport has been winning prizes for keeping its passengers safe: it won a Global Biorisk Advisory Council Star Facility Accreditation for having the most stringent protocols for cleaning, disinfection and infectious disease prevention in facilities.

Cultural institutions, too, took a hit during the pandemic. Museums were forced to close for several months at the beginning of the outbreak. As

Matt Allen General Manager Hyatt House Charlotte/ Center City

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How are you leveraging technology to better serve guests?

One of the biggest things we are looking at is a lock replacement. That was slated to start this year, but it has been pushed back. It’s a costly process, but I think it’s worth the expense because it allows guests to check in online and bypass the front desk entirely because their phone becomes the key to enter the room. Many hotels are already using this technology but as a smaller hotel, we are coming a little later in the day. I think this will become increasingly common as it limits some of the contact that we took for granted in the past.

Domestic travel and “staycationers” have carried the hospitality industry throughout the pandemic.

How has the appetite for conferences picked up and how do you expect this to play out in 2021?

We have hosted a few very small meetings this year with a limited number of people in the room but with people using Zoom to dial in. The city itself is not banking on a lot of conferences for 2021. For the most part, 2021 was not originally expected to be a large conference year for Charlotte because of the expansion of the Charlotte Convention Center. This was fortuitous timing because the completion of the convention center should coincide with a return to normality in terms of COVID. I think this will bring great things to the region. When they were putting together the space, they listened to what people wanted, including more breakout spaces.

This should attract some new and exciting companies to Charlotte for their events. Having one big convention center hotel would definitely help with this.

Corporate travel is all but gone at the moment. We have some that is coming to the city but as far as the big names that were coming in the past, they have cut down on those expenses entirely. We are receiving a little bit of payoff from the industries that are flourishing, such as tech and healthcare. Charlotte is a big banking town and, from talking with people from the industry, a lot of this business needs to get done face to face. We are anticipating business to pick up at the end of the second quarter of 2021.

Mecklenburg County again announced stay-at-home orders in January 2021, six museums in Charlotte voluntarily closed: Mint Museum, Levine Museum of the New South, Harvey B. Gantt Center for AfricanAmerican Arts + Culture, Bechtler Museum of Modern Art, Discovery Place and McColl Center for Art and Innovation. The Charlotte Symphony also suspended rehearsals upon hearing the county’s safety edicts.

Cultural entities are doing what they can to ensure the survival of the Charlotte cultural sphere. Foundation For The Carolinas is partnering with THRIVE to distribute $4.8 million to large organizations. The Arts & Science Council (ASC) — the designated “Office of Cultural Resources” for the city of Charlotte, Mecklenburg County and six suburban towns — mustered its resources, and with support from Hue House and Charlotte is Creative, is distributing $1.2 million to small and midsized groups and individuals.

As has been well documented, technology has stepped into the fore over the pandemic year as physical contact has become more precarious.

While this shift hasn’t altered the tourism industry as much as banking or litigation, for example, there are still many ways in which the sector has changed.

For instance, while the number of people riding Ubers has gone down significantly, revenue from the mobility company’s food delivery service is up 125%.

| Invest: Charlotte 2021 | TOURISM, ARTS & CULTURE

TOURISM, ARTS & CULTURE OVERVIEW

As well, miscreants seeking to find ways around the government hospitality closures turned to Airbnb for partying. So much so, in fact, that the North Carolina office of the home-sharing app had to close down listings across the state, including 20 in Charlotte, after guests used their spaces for illegal gatherings.

On another front, Charlotte’s white-hot business convention market, which is a huge revenue draw, has largely been put on hold, with business conventions having gone virtual. This particular form of digital transformation has not been met with the same success as others, and it is expected that, with the vaccine, conventions will resume and Charlotte will again be a desirable location for them. Where they have continued, it has been done with the utmost regard for safety. “The worst is behind us, but the rebound is going to be a lot more gradual than we initially expected. Early in the pandemic, we had expected that by the latter part of 2021 into the beginning of 2022, we could get back to 2019 levels. That has been pushed back and could now be closer to 2023. In addition, some businesses have learned how to work in a more remote environment, but we do believe that does not replace in-person interaction. Once it is safe and companies feel that they can allow their employees to go out and visit other businesses or go into the office, we expect to see a jolt in demand.” said James Gratton area general manager at the Marriott, Renaissance & AC Hotel Charlotte SouthPark.

Despite the pandemic, hotel construction in Charlotte has continued apace. Construction has, by and large, not been halted, which is another harbinger for future success. In the Uptown area alone, 1,274 new rooms are due to open through 2022. Among the biggest projects recently opened or on the cusp of opening are the Holiday Inn Express & Suites – South End, EVEN Hotel at Stonewall Station, the JW Marriott Ally Charlotte Center, and the Hyatt Centric SouthPark Charlotte.

Arts & culture Charlotte boasts a vibrant arts and culture scene with world-class institutions, not least among them the Mint Museum Uptown, the Harvey B. Gantt Center For African American Arts + Culture, the Bechtler Museum of Modern Art, the Charlotte Symphony, Opera Carolina, and the Actor’s Theatre of Charlotte.

This year has been as hard on these as it has been on the tourism and hospitality sectors, as many have had to close down through the duration of lockdown or severely reduce their capacity. At the Bank of America Stadium, what was lining up to be a record year started seeing shows canceled as the pandemic arrived. Billy

Perspectives: Landscape Carrie Duncan Dual General Manager – AC Hotel Charlotte City Center, Residence Inn Charlotte City Center Our guests need to feel safe and secure when they are traveling, especially with this market being heavily driven by corporate travel. As everyone is on strict work from home orders and cannot travel, there has been a complete travel ban restriction on all corporate travel, making the market flip-flop from a corporate-driven market to a purely leisure-driven market. We are just starting to see the corporate travel trickling in, which is exciting.

Sofia Daya General Manager – Home2 Suites by Hilton The way that we have adapted so far tells us that it’s possible to make a comeback. With the new cleanliness initiatives and new safety precautions we put in place, people will feel quite safe traveling in hotels in the years to come just because of the amount of effort that we have already put into this as a result of the pandemic. We don’t think it will ever change. We believe it will crystallize as the new gold standard going forward. Masks inside hotels are probably here to stay. There will always be a shield up at the front desk protecting our staff.

Connor Parsons General Manager – Courtyard by Marriott Charlotte City Center We do see green shoots here and there. In Charlotte in particular, we see a demand for reopening restaurants and bars, and we see people anxious to be able to do some of the normal social activities common in a downtown market. We recognize the need for safety and special precautions right now and we expect leisure travel to continue to increase marginally as we see deployment of a vaccine in the United States, and as states and companies begin to loosen travel restrictions.

Zach Rutledge General Manager – Bojangles Entertainment Complex September is when we’re really looking to get back to our ticketed events, including a month-long run of Wicked, which was originally scheduled for last year, followed by a run of Hamilton. We’re keeping our fingers crossed for the fall given the way the vaccine distribution has been going. If it continues to trend in the right direction, we’ll be able to have large gatherings by then, hopefully at full capacity. I do anticipate that people will still need to wear masks at that point.

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Randy Rushakoff Area General Manager Midas Hospitality

What were some highlights or takeaways for Midas Hospitality in 2020?

It’s really been a challenging year in hospitality. We’ve had to make some very tough decisions and right-size the workforce. The demand for business travel fell off and so much of our business is related to group travel, or to the local office parks. Now everyone is working remotely. While it’s great that parts of life could go on over Zoom and the like, it has adversely impacted hotels and restaurants. I feel like we’re past the worst of it. I remember the worst night we had: in a 204room hotel, we sold 12 rooms. I can’t pay someone to come and clean rooms for eight hours if we only have 12 rooms. You learn and adapt, and business has picked up a lot since then.

How have you addressed the labor shortage in the hospitality industry?

At our hotels here in Charlotte, it is still a struggle to hire people. We have enhanced benefits, increased wages, and implemented a $50 monthly transportation allowance to recruit and retain the best talent. Having seven hotels has meant we can adeptly move our people around to different locations. Some people will work multiple properties to cover their hours. But it is hard to find people to come to work. As well, for the most part, guests don’t really want stay-over cleaning services anymore. They’ll want a deep clean before they arrive, but while they’re here, they won’t want housekeeping. So, you can really see the industry — and the labor requirements — evolving.

What is your outlook for the next 12-18 months?

I feel like we’re past the worst. It has gotten busier. I don’t know that we’re going to immediately return to pre-pandemic levels for at least another year. It’s been exciting to see groups traveling again. Meeting rooms that have sat empty for a long time are being booked.

There’s a return to profitability. Still, I think it will not be until 2022 or 2023 before things are back to normal.

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Joel and The Rolling Stones were among the acts who had to cancel as early as March; Garth Brooks had sold out all of the stadium’s 74,000 seats in 90 minutes — a record — only to have his show indefinitely postponed.

Sports, Events and Festivals Sports is huge in Charlotte, with an NFL franchise, an NBA team, a Major League Soccer club, and a slew of minor league offerings, not to mention the annual CocaCola 600, NASCAR’s longest race, which has been held in the city since 1960. While sports competitions went on through 2020, it was with a vastly reduced number in attendance at the venues. Fans had to content themselves with watching from home. Through much of the pandemic, indoor arenas had their attendance pegged to 15% of capacity, while outdoor stadiums and speedways were at 30%. By March 2021, thanks to a successfully deployed vaccination program, Gov. Roy Cooper was able to raise the maximum capacity in venues to 50%.

Still, there were a slew of cancellations in terms of major events and festivals. In addition to Tuck Fest and Taste of Charlotte, the Charlotte Pride festival was also canceled. Probably the major event disruption of the year was the ill-fated Republican National Convention, held in the run-up to Election Day 2020. The event was meant to bring 50,000 visitors to the city, $121 million in direct economic impact, and a 100% hotel occupancy rate in late August. Unfortunately, the Democratic governor objected to such a mass gathering, which would be in violation of state rules. This led former President Donald Trump, insistent on maximum capacity crowds, to move the convention to Florida just several weeks before it was due to take place.

Hotel performance As essential businesses, hotels were never forced to close and at least 70% of them remained open. That said, they were hugely under patronized as travel came to a standstill, and neither leisure visitors nor business travelers made the imprint on hotel vacancy that they would have in a normal year. This had disastrous effects on hotel market performance. Occupancy fell by 60% over 2020, while revenue per available room dropped by about 75%. According to one study by the American Hotel Lodging Association, North Carolina saw 22,787 direct hotel-related jobs lost and 88,225 jobs lost that support the hotel industry. Though this has likely been a fairly temporary hemorrhaging, and the jobs will largely come back as the country reopens, it made 2020 a very bad year for the industry. Added to the decline in guests, in order to stay open, hotels had to spend money

TOURISM, ARTS & CULTURE INTERVIEW

Raising the curtain The arts are poised for a strong comeback that will include lessons learned from a most challenging year

Tom Gabbard President & CEO – Blumenthal Performing Arts Center How is Charlotte’s arts and culture sector preparing for a post-COVID transition?

We have used this time well. Being unable to set up public performances gave us the leeway to dramatically improve air quality in all of our buildings. They were healthy buildings to start with, but they have been stepped up a notch in terms of health standards. We looked at all of our air filtration systems to ensure we had state-of-the-art, hospital-grade quality systems in all of our venues as we began to reemerge. We know it’s going to be a long-term process. It’s not a matter of just flipping the switch and then everybody is partying like they were in 2019. Part of our transition will be events such as Immersive Van Gogh, where people can move around. As we look ahead to the fall and restarting more traditional inside performances, we have a really good strategy that weaves together improved air filtration, and for a period of time mask use when people are sitting next to each other. Of course, vaccines are making a big difference. We feel confident that by the time we get to the fall, we can begin to really restore normal theater operations. We know people are eager to get back.

What community engagement programs are you seeking to launch?

That is something else that has changed for the good in many ways. The convergence of COVID-19 with the Black Lives Matter movement and various social justice issues has underscored the need for the arts to be relevant to the community in entirely different ways. This has really focused our attention on that.

Blumenthal has always sought to be a place that is home to everybody. We brought on board Boris “Bluz” Rogers as Director of Creative Engagement. He’s an artist who is well respected here in Charlotte, both as an artist as well as a community leader. We have added

Bree Stallings as Director of Artistic Experiences. She has created many of the murals in town as a working artist. In parallel, she has also been involved with education and community development activities.

Both Bluz and Bree are transforming how we engage with local artists to create high impact programs. We began a program called We Are Hip Hop. It’s a way for us to activate hip hop artists here in Charlotte and begin to showcase their work. Through this, we hope to find ways for local artists to make some money. We want artists here to be able to actually pursue their craft and earn a living. This last year has shown us that it is really essential that we provide some jet fuel to that and move ahead in a much more impactful way to work with artists in the community and to make what we do relevant to every citizen. www.capitalanalyticsassociates.com

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Billy Dunlap President & CEO Visit York County

How did the tourism sector reconfigure its goals with the onset of the pandemic?

When the pandemic hit, we focused on going into support mode, really supporting our partners, who, for us, are attractions, hotels and restaurants. Anyone who is in the hospitality industry. We knew that all three of those would be hit hard through the pandemic: attractions were shut down, hotels were operating at a minimum and restaurants were figuring out how to be open and how to serve their guests. We shifted our focus locally – how do we help our hospitality partners survive with the support of people who live here. We found being a mouthpiece for our restaurants and attractions to communicate their hours and information as they evolved with the restrictions was imperative. We also focused communication efforts directly with our partners to get them relevant industry information to help them through this difficult time. We were trying to do what we could because not only did we want to support these industries while the pandemic was going on, but also because we need these restaurants, attractions, hotels to survive. When tourism comes back in York County, we will need them there.

What events and attractions are you hoping to open this year?

We’re looking forward to all of York County’s venues and facilities being open this year. Carowinds, our largest tourist attraction, has announced they hope to open in May, so we’re excited about that. In 2019, Carowinds made up a third of our visitors, so they drove people into all areas of York County, the straw that stirs the drink, if you will, bringing people into our hotels, restaurants and all over. We’re also planning a large D1 College Basketball showcase for December that will bring a huge impact. In partnership with Rock Hill Parks, Recreation & Tourism their athletics facilities are booked just about every weekend, whether for soccer, lacrosse, softball, basketball, BMX, you name it which in turns provides a great economic impact for our community’s recovery from COVID-19.

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on implementing new safety measures: hand-washing stations, plastic guards, one-way movement signage and regular cleanings.

Some hotels are heavily reliant on traffic from CDI airport which, as has been seen, saw 50% less traffic than usual. Industry and trade conventions, too, are a huge draw for local hotels. In a normal year, the Charlotte Convention Center will draw thousands to such events, but none came during the pandemic. “There have been many challenges because of the ever-changing nature of COVID,” said Kyle De Hont, general manager of The Ivey’s Hotel. “As everybody would attest to, even in the national headlines, we were expecting that it was going to be a couple of weeks, maybe a couple of months, but here we are and it’s going to be next year before we even begin to think about the next side of it.

It’s been challenging, with the constant evolution of our procedures, our marketing, our strategies, a lot of constant adaptation to what we think we know. 2020 was supposed to be an absolutely fantastic year, after 2019 was an amazing year for Charlotte, coming off the NBA All-Star weekend, and a lot of great conventions in the summer. It’s been disappointing, it’s been tiring, but it’s also been rewarding. We had to adapt and make changes with our team.”

Looking ahead In March 2021, Carowinds, the amusement park just south of Charlotte, announced that it was looking to hire around 2,000 employees for its 2021 season.

It’s news like this that makes people in the industry optimistic, reiterating that 2020 and the pandemic were just a horrible aberration for tourism, arts and culture.

As the vaccination campaign continues ahead of schedule, people are looking forward to a return to travel. In fact, many predict that the second half of 2021 and 2022 will be record-breaking years for leisure travel. “We anticipate the leisure business to rebound as soon as it is able. There is some psychology that has been built into people relating to the fear of travel but it will be balanced out by the desire for social connection. The hospitality business is going to be interesting to watch going forward. We think that businesses are going to be more reluctant to rush into sending people to travel. It has been a learning period for them to take advantage of the available technology, learn how to continue business without as much travel as they were doing pre-COVID. It will prove to be a slow crawl that we are eager to see play out, probably by the end of 4Q21,” said Meredith Zingraff, general manager of The Dunhill Hotel.