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‘Commercial gentrification’ pushes 120 entrepreneurs out at North End biz centerby Jonathan McFadden on April 22, 2019
Up to 120 small businesses in a coveted piece of North End real estate have until April 30 to move out before developers transform it into a mixed-use space for large offices and retail.
Last November, Texas-based Artesia Real Estate purchased the City North Business Center at 1801 N. Tryon St., less than a mile from uptown, for $8.8 million. Plans call for Artesia to turn the sprawling business plaza into General Assembly, a 125,000-square-foot office/retail building with common meeting areas, a café and large windows for natural light.
For that to happen, though, the 120 businesses — many of them black-owned — that call City North home must vacate by the end of the month before construction starts.
The news has upset business owners who say they were left out of the loop about the impending move until earlier this year, when they received a letter saying they had two months to find new space. It also underscores ongoing tension in Charlotte as new development threatens to swallow the city’s historic, mostly minority neighborhoods.
“It’s commercial gentrification, and a lot of people aren’t talking about it,” said Christopher Dennis, who operated the housing development company eFix Housing Solutions and the nonprofit Community Dream Builders out of City North for two years. “When a business is impacted by gentrification, you may see a moving sign, but you’ll never see a sign saying, ‘We’re back.’
“Businesses go into a void. Their costs are doubled or tripled,” he said. “It becomes a major challenge.”
Losing local business in the North End is nothing new. New development has inched into the corridor for years, bringing a mix of new life and energy but also displacing residents and now dozens of small businesses that occupied City North.
“I know the displacement of those 100 or so businesses will greatly affect our corridor,” said Darryl Gaston, co-founder of the North End Community Coalition. “If you wipe out existing real estate that typically has (benefitted) individuals who don’t have this wellspring…of money, what options do we make available to people? You’re talking about livelihoods.”
Reimagining North End
Business owners displaced from City North range from an experienced clothing designer to a longtime event planner to the founder of a company specializing in affordable housing. Some have scrambled to find new space outside North End; others have found alternatives that keep them in Lockwood, the historic African-American community where City North Business Center has housed thousands of small businesses over the decades.
“There were about 120 businesses around the time of the sale; all 120 are finding new homes,” said Colin Brothers, Artesia’s principal owner. “We’re very sympathetic towards them and tried to give them some resources and time to relocate elsewhere.” That includes connecting business owners with a broker to help find alternative space and agreeing to accommodate merchants unable to locate new space by the April 30 deadline. Brothers said they are allowing at least one tenant will remain in City North past the deadline while their new office is prepared.
Brothers believes General Assembly (which he says has no political affiliation, despite its name) will be a catalyst for revitalizing North End into an innovation hub.
“We think we’re helping the community by further improving the (building) versus leaving it as is,” he said. “It’s something the city has been supportive of, that corridor growing and maturing over time. They envision that corridor being revitalized.”
City leaders have rebranded the neighborhoods north of uptown as the North End Smart District, a hotspot for data, development and investment that will empower residents and uplift communities. The most significant hallmark of that progress has been Camp North End, a former industrial site now home to businesses, festivals and restaurants.
But unlike General Assembly, creating Camp North End didn’t displace scores of entrepreneurs who relied on affordable rents that were a steal by Charlotte standards.
Just ask Gege Gilzene, a fashion designer who only a year ago turned his clothing side hustle, GThree Concepts, into a full-time business at
City North. He paid $650 a month (about $17.80 per square foot ) to rent a 438-square-foot suite — hard to beat for a fashion startup so close to the center city and NoDa.
After getting news he’d have to go, “everything in me just fell to the ground,” Gilzene said.
It cost an average $17.09 per square foot to rent Class C, or the lowest classification of office space, in Charlotte’s center city in last year’s fourth quarter, according to Cushman & Wakefield, the real estate investor helping Artesia oversee General Assembly’s construction and sign new tenants. A listing on LoopNet, an online marketplace for commercial properties, shows that rent at 1801 N. Tryon may jump to $30 per square foot once City North becomes General Assembly. That’s just below uptown’s average $32 per-square-foot asking rental price and nearly double what the occupants being forced to vacate their space in City North are paying today.
To keep overhead low, Gilzene said he’ll move his business into his house and use apps like LiquidSpace to find open conference rooms for meetings with clients. It’s not a perfect (or permanent) solution. He once stopped customers from coming to his home when some overstepped their bounds, such as rifling through his refrigerator.
“It really does feel like a blow — a major blow,” he said about the move. “I’m getting kicked in the butt every turn I make. I’m working but I’m packing.”
He plans to find new space, but is focused on keeping his business afloat as wedding and prom season get in full swing.
“Once I get a little more stable, then I’ll start that search again,” he said. “For now, I just need to get out of here.”
Is Charlotte good for small business?
Charlotte City Councilman Larken Egleston, who represents the district containing City North and parts of North End, agrees that city leaders have “high hopes” for the area, but said they don’t include displacing local businesses.
“When people are building in the North End or any part of Charlotte, we hope they’re making room for small, local businesses to thrive,” he said. “When people are priced out of where they live or have their business, they’re not generally able to find another option that’s closer to town. They have to move further from town.”
He called the City North situation “unfortunate,” but added that the former property owners had the legal right to sell to Artesia. And, because Artesia didn’t require a zoning adjustment, it also didn’t need city council’s blessing to adapt the property into General Assembly.
That does little to assuage business owners forced to move. Egleston said he believes Charlotte is still welcoming to entrepreneurs, pointing to incubators and coworking spaces as evidence of the city’s energetic startup climate.
But even among coworking spaces, there’s a widening cost divide. Kevin Giriunas, founder of Advent Coworking in Plaza-Midwood, predicts more international and national coworking chains will migrate to Charlotte in the coming years, charging top dollar for space in the urban core.
“They’re top-notch spaces, class A offices (but) you’re paying a premium for these spots,” Giriunas said. “It’s a highly scalable model, but they don’t care about community.”
Smaller spaces like Advent or Hygge Coworking, he said, are more accommodating. At Advent, business owners can buy a day pass for $20. If they need to stay longer, they can choose an ongoing $149 rate for a month-to-month flex membership or pay between $350 and $2,500 per month for an office, Giriunas said. Lease terms are short, usually six months to a few years, depending on the space.
“It’s substantially cheaper per square foot per month compared” to costlier space or owning your own building, he said. “For a lot of people, it’s enough to get in the door and figure out if they’d like it or not.”
Changes in Lockwood
Built in 1933, the building christened City North Business Center has long been a fixture in Lockwood, nestled between North Tryon and North Graham streets near the Amtrak station.
In its heyday, the area flourished as a home to mill and plant workers. Over time, it experienced decline, becoming a low-income community overflowing with cheap rent and violence. In 2010, it was ranked as one of America’s most dangerous neighborhoods.
Residents sought change and worked with nonprofits to revamp the area. Today, Lockwood attracts developers captivated by its proximity to uptown, NoDa, the light rail and a choice selection of breweries and restaurants. All those add to reasons why Artesia chose it for General Assembly, which aims to draw large office tenants seeking creative space.
“It’s close to uptown. It’s got ample parking. It’s going to be close to some good amenities,” Brothers said. “There’s a great long-term vision there, and I admire that.”
Credit much of that vision to people like Christopher Dennis, who’s used both his for-profit and nonprofit businesses to help stabilize Lockwood. “We’re now facing the result of the change we helped bring about,” Dennis said.
Like the 119 other tenants occupying City North, Dennis and his team of six will move out April 30. They’ve found temporary space at Lockwood Legends, a renovated home at 240 Sylvania Ave. that houses an art gallery and event space.
Dennis and his companies will stay in Lockwood, although the new space is significantly smaller. That means changing how he does business.
“We’re going to implement new technologies and utilize more virtual spacing,” he said. “(City North) is a major key anchor location for us. Having to relocate has been a challenge.”
Dennis said he’s heard very little from the new property owners, aside from a letter telling him where to send his last few rental payments. He paid $750 a month to rent at City North. He’ll pay less at Lockwood Legends, but that hasn’t diminished the logistical burden of finding adequate space while running two businesses.
The experience has emboldened Dennis to stir conversation around commercial gentrification, a phenomenon he says doesn’t garner as much attention as housing.
“Entrepreneurs have become major players in development, but no one has focused on what happens in the wake of (commercial gentrification),” he said. “Entrepreneurship is a driving force the city will leverage in its ability to grow. These changes will impact that growth.”
Egleston, the city councilman, says gentrification stays top of mind for city leaders and he feels it’s beginning to influence the development community, too.
“I feel like there’s more consideration of that then there might have been historically,” he said. “We can set the tone. We don’t want Charlotte to be ‘Anywhere USA’ with a bunch of national brands taking over and only the big companies who can afford to pay high rent can be successful.”
“This will never happen to me again”
In its Feb. 21 letter to City North business owners, Cushman & Wakefield recommends merchants use a brokerage firm to help find new space. Several business owners have used the service, Brothers said.
He added that the firms gave business owners more notice of the move than what the lease requires.
“All of the discussion so far has been around the residential impacts of gentrification,” said Brothers of Artesia. “We’re very sensitive to this issue.”
Brothers wouldn’t disclose the cost of the overall project, but says he expects taking a year to turn City North into General Assembly.
“We want to be good neighbors to the community and just help steward the project well during this phase as tenants are moving out,” Brothers said.
Not everyone feels supported. For nine years, Coretta Livingston ran her events business, The Venue at 1801, at City North Business Center. She’s hosted weddings, baby showers, political fundraisers and even memorial services there.
When she learned she’d have to move, she was flustered. “My clients depend on me; they expect to have space,” she said. “It’s very disheartening.”
Livingston paid $2,300 a month (including utilities) to run her business in 2,000 square feet of space at City North. Now she’ll pay double for space at 1701 W. Trade St., near Johnson C. Smith University.
The move doesn’t just hurt her budget. It hurts customers, who trusted that Livingston would quote them an affordable price for events in their community. Where some venues might charge $3,800, Livingston charged $1,200 or $1,400.
She anticipates increasing her prices by $100 or so to compensate, otherwise “I won’t be able to sustain.”
The new space is bigger (5,000 square feet) and includes six offices she plans to rent to other businesses to offset her rental costs. She’ll also keep The Venue at 1801 name, just so no one thinks she’s closed.
Still, the sting of leaving City North lingers. She feels like she’s been pushed out in favor of more affluent tenants, and she’s adamant this will be her last year paying a landlord to house her business. By the time General Assembly is open, she wants her own building.
“I’m not renting from somebody,” she said. “This will never happen to me again.”