The Charlotte City Council voted 10-1 Monday to make the Jefferson-First Union Tower at 301 S. Tryon St. a local historic landmark. Under state law, the designation lets the owners defer half the property tax on the designated part of the building. They plan to turn the vacant 32-story office tower into apartments and a hotel.
The plan includes no affordable units. Several council members said the city should have asked for some. Staff told them the designation was not a negotiated incentive, and that the landmark vote was the last time the project would come before council.
A landmark, not a deal
The county's top preservation official told council the tower qualifies on its own. Stewart Gray, director of Mecklenburg County's Historic Landmarks Department, said it meets the same criteria used for the National Register of Historic Places. If Wells Fargo had asked, he said, "we would bring it to you for landmark designation, even if there wasn't this development plan in place."
Shahid Rana, Charlotte's economic development director, called it "a by-right application because of its historic significance," meaning it earns designation on its merits rather than through a deal with the city. "This isn't like your traditional tax increment grant or a business incentive grant," he said, referring to the grants in which the city rebates part of the new taxes a project generates. Those grants, Council Member Reneé Johnson of District 4 noted later, require a public benefit.
Council could have said no. But at-large Council Member Victoria Watlington said that turning down a building that meets the criteria, when others have been approved, could expose the city. "It could be challenged," she said, and City Attorney Andrea Leslie-Fite agreed.
Council Member Ed Driggs of District 7 said he supported the conversion but not the route. "This use of the historic designation ought to be a policy decision that we make and not a transaction event," he said.
The building and the plan
James Anderson of Riverside Investment & Development, the tower's developer, said the roughly $250 million project would bring 282 residences and a 180-room hotel, improvements to the adjacent office building, and a transformed public plaza and atrium. "Landmark designation and the associated tax relief are essential to making this historic conversion feasible," he said. Rana said the developer is also seeking federal historic tax credits, which help pay to rehabilitate qualifying historic buildings.
According to council's meeting materials, which Council Member Kimberly Owens of District 6 read aloud, the tower was the first late-modern skyscraper in downtown Charlotte and North Carolina's tallest building when it opened. It later served as a Wells Fargo headquarters building.
What the tax break is
North Carolina taxes a designated historic landmark at half its value. The other half of the tax is not forgiven outright: it is recorded as deferred taxes and carried as a lien on the property. Under the statute, the last three years of deferred taxes come due if the designation is changed or the building loses its historic significance, other than through fire or natural disaster.
The city's agenda for its Aug. 10 meeting, when council scheduled Monday's hearing, estimated the potential deferrable taxes at about $124,525 for the city, $209,398 for Mecklenburg County and about $23,000 for two city special tax districts, based on the county's appraised value of $162.9 million. The same agenda said the estimate "is likely to decrease significantly," because the tower sold on April 23 for $36.5 million and a countywide revaluation is coming in 2027.
City officials described the designated area in two ways. Rana said it covers only the tower's exterior and the pedestrian bridge that spans the street, not the garage, plaza, commercial building or mid-rise office that share the parcel. The August agenda described it as "the exterior and portions of the interior of the structure and a portion of the land." The difference was not reconciled on the record Monday.
Rana argued the alternative was worse. "The cost of inaction without providing a historic designation that allow for a developer to repurpose this building is a loss of tax revenue," he said. Council Member Danté Anderson of District 1, citing figures staff gave council, said the property's annual tax revenue was projected to rise from about $2.2 million to about $4.3 million.
What council asked for
At-large Council Member Dimple Ajmera asked whether the plan included affordable housing. "I don't see a designation for affordable housing. Am I correct?" she asked. "Correct. Yes," Rana said.
"I think we need to have a broader discussion on what exactly our taxpayers are getting in return," Ajmera said, suggesting 20 or 30 percent of the units could be affordable.
Johnson moved to defer the vote to get more information. "We're calling it historical because it was 1971, which I don't think is historical, just for the record," she said. Rana said a delay would affect the developer's ability to apply for federal tax credits, though he did not have the deadline. The motion to defer failed, and the designation passed 10-1, with Johnson voting no.
"I'm older than this building," Owens said before voting yes.
Members asked for the broader questions to go to committee: when historic designation should be used for office conversions, and what the city should require in return. Mayor Rob Harrington said council would settle the wording of those referrals later.