State Politics

NC officials cited HB2 for Charlotte’s loss of 732-job project, emails show

Before choosing Richmond, Va., real estate research firm CoStar Group was looking to take space at the 615 South College office tower (center) currently under construction in uptown.
Before choosing Richmond, Va., real estate research firm CoStar Group was looking to take space at the 615 South College office tower (center) currently under construction in uptown. rrothacker@charlotteobserver.com

Newly obtained North Carolina Commerce Department documents show House Bill 2 was the primary reason Charlotte lost a 732-job business expansion to Richmond, Va.

A day after real estate research firm CoStar Group announced plans to expand in Virginia, a North Carolina economic development official closed out the project file and listed the controversial LGBT legislation approved March 23 as the deciding factor.

In an Oct. 25 email to state officials, Garrett Wyckoff, senior manager of business recruitment for the Economic Development Partnership of North Carolina, said he changed the status of the CoStar project to “Closed Lost.”

“It is my understanding that we lost the project. I have selected the following reason for this status change: Local issues,” Wyckoff wrote in an email obtained by the Observer through a public records request fulfilled Thursday. For further explanation, Wyckoff added: “Spring 2016 Legislation.”

The Observer reported last month that CoStar’s CEO ran into opposition from his board over HB2 when he sought approval to enter final negotiations to expand in Charlotte.

CEO Andrew Florance was “broadsided with (the board’s) pushback over the HB2 issue in Charlotte,” Jeff Edge, a Charlotte Chamber official who was recruiting the company, wrote in a Sept. 20 email obtained by the Observer from the city of Charlotte. “They have re-opened the competition to look more closely at Atlanta and Richmond now.”

“Heaven knows how many deals we’ve been crossed off the list and didn’t know we were even being considered for since March,” Edge added. Real estate sources have also told the Observer that CoStar passed over Charlotte because of the law.

As recently as Sept. 9, Wyckoff wrote in an email that a consultant involved in the project had told him that a call between the company and Gov. Pat McCrory and Commerce Secretary John Skvarla had gone well. The consultant “feels like we are in a very competitive position,” Wyckoff added.

Three days later, however, the NCAA pulled championship games from North Carolina, putting opposition to HB2 back in the national spotlight. And two days after that, the ACC pulled more games from the state, including this weekend’s football championship.

North Carolina and local governments had offered CoStar an incentives package of $10.2 million, emails show. That compared with the $10.6 million CoStar is receiving from Virginia and the city of Richmond, a figure that includes $4 million of in-kind services.

McCrory signed HB2 into law March 23 to overturn a Charlotte ordinance that extended legal protections for LGBT individuals. HB2 also requires transgender people in government-run buildings to use restrooms that correspond with the gender on their birth certificates.

Katherine Peralta: 704-358-5079, @katieperalta

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