Why Charlotte is unlikely to land convention hotel site before year end

The timetable for acquiring a site to build a proposed, 1,000-room convention hotel in Charlotte is likely to be pushed back by at least several months as tourism executives focus on higher priorities, a city consultant told CBJ on Monday.

In May, as part of a presentation on investments targeted by the Charlotte Regional Visitors Authority, Ron Kimble, a consultant to the tourism agency, said City Council would be asked to consider options for a convention hotel — a long-discussed project anticipated to include a request for $100 million in taxpayer money to help pay for construction costs.

Kimble told me Monday afternoon that his previous remarks about a possible consideration this summer by council involve buying and preparing a site. Now, he said, it looks like council and the visitors authority will push those conversations to the end of this year or early in 2019.

“We also have had conversations with you, with the community that have been in media regarding the need for a 1,000-room hotel, a Convention Center hotel in this community that would raise all tides and raise all boats in the hospitality industry and bring new bigger conventions to Charlotte,” Kimble, a former deputy city manager and interim city manager, told council on May 14. “Our competition in Nashville, in Indianapolis, in Louisville, in Fort Worth, in Austin are building and partnering on these 1,000-room hotels, and we’ve got to make sure that we stay competitive in the marketplace. There will be an action coming to you sometime this summer regarding the opportunity to partner on an upgrade to the Convention Center that will also involve the possibility of a new 1,000-room hotel adjacent to the Convention Center.”

CBJ reported in May the visitors authority expects to spend as much as $30 million to buy the land and prepare the site for a convention hotel. If council approves public funding for a convention hotel, the money would be repaid using a portion of existing tourism tax revenue.

Kimble told me the convention hotel proposal is likely to take shape next year, following an upcoming six- to seven-month period of settling several more pressing priorities. Those priorities are:

• Contributing $8 million from existing tourism tax money to help pay for a proposed, $84 million hotel and conference center on the UNC Charlotte campus. Council is expected to vote Aug. 27 on possible city investment.

• Determining the parameters of the next round of improvements and renovations at the NFL stadium in uptown. The Carolina Panthers own the 74,000-seat stadium, but city government paid for $75 million of the team’s $177 million, five-year stadium facelift started in 2014. New team owner David Tepper is expected to request additional public money for additional improvements. Kimble has used $75 million as a “placeholder” figure for what the city might agree to pay.

• Winning approval for yet-to-be-negotiated construction contracts to begin work on $110 million worth of convention center renovations previously endorsed by the council.

• Determining the schedule, scope and other details for an estimated $30 million worth of improvements at the city-owned Discovery Place Science museum in uptown Charlotte.

Kimble said the slight shift in timing for buying the hotel site won’t delay the project because a developer wasn’t going to be selected until 2019 anyway.  

Tom Murray, visitors authority CEO, has said the best location for a 1,000-room hotel is near the convention center, located on College Street and bounded by Stonewall and Brevard streets and Martin Luther King Jr. Boulevard.

Supporters of a 1,000-room hotel cite the need for event planners to be able to negotiate discounted room rates with minimal hassle and at one location (as opposed to multiple hotels) as keys to landing more conventions. The largest hotel in Charlotte is the 700-room Westin, opened in 2003.

Some council members have questioned public investment in a convention hotel, saying it undercuts private hotel developers and operators. Murray and the visitors authority, citing examples and analysis from similar-sized cities, say a convention hotel would bring in and target a different audience, leaving ample demand for other hotels.

“I’m trying to understand why would that be an opportunity for Charlotte to participate in when we have hotels built every day and they are built through the private sector,” LaWana Mayfield, a council Democrat, told Kimble during his earlier presentation. “So, why, just because of its location and proximity to the convention center, why would we identify hospitality and tourism dollars to build a hotel when we have hotels being built all over this city that benefit the airport and so many others?”

Kimble told Mayfield a convention hotel would allow planners to reserve as many as 700 or 800 rooms years in advance and at more attractive rates. Private operators are less willing to risk blocking off a large number or all of their rooms at prices that might wind up being much lower than the going rate.

Regardless of whether the land was in place this summer, there was no way the 1,000-room hotel would have opened in time for the 2020 Republican National Convention. Cleveland opened a 600-room, $275 million Hilton — paid for by the county — just before the city hosted the 2016 RNC. Charlotte was selected as the 2020 convention site last month.

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First Canopy hotel for Charlotte pegged for SouthPark site

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Another hotel flag new to Charlotte appears to be on track for a SouthPark opening within the next two years.

Canopy by Hilton is expected to open in early 2020 at 6010 Fairview Road, according to a list of upcoming locations on Canopy's website. The 2.8-acre site, which sits behind Fairview Towers, is part of a larger site approved in 2016 to allow development of a mixed-use project, including a new hotel. Wilmington-based Liberty Healthcare Management is developing a senior-care facility, The Barclay at SouthPark, on an adjacent parcel.

Charlotte-based Tara Investments, which specializes in hotel development, lists the Canopy SouthPark hotel in its portfolio, indicating that it's set to break ground this summer. Tara has developed several hotels across the Southeast, with flags including Hyatt Place, Homewood Suites by Hilton and Hampton Inn and Suites. Elsewhere in Charlotte, Tara developed the Homewood Suites in Ballantyne.

Tara is also seeking to build a Canopy hotel in downtown Nashville, Tennessee, as reported by the Nashville Business Journal, a sister publication of the Charlotte Business Journal.

Hilton Worldwide Holdings (NYSE: HLT) and executives with Tara could not be reached by deadline for more information on the SouthPark Canopy hotel.

Hilton last year opened two flags in SouthPark — a 160-room Hilton Garden Inn and a 110-room Homewood Suites developed by Crosland, Allen Tate and Chartwell Hospitality.

Also in SouthPark, an AC Hotel by Marriott is pegged for the corner of Roxborough and Rexford roads, adjacent to the existing Charlotte Marriott SouthPark. A construction permit by Barringer Construction was recently filed for that site, at 2200 Rexford Road. Charlotte's first AC Hotel in uptown is expected to open next month, according to its website.

Canopy is described by Hilton as a boutique, lifestyle flag. The company lists six hotels in operation — in Washington, D.C.; Maryland; Portland, Oregon; Dallas; Atlanta; and Iceland. Another 16 hotels, including the SouthPark location, are listed as opening over the next three years.

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City leaders weigh likely competition for CIAA tournament

Charlotte has the Central Intercollegiate Athletic Association basketball tournament for at least two more years, but a decision this month by the conference to field bids from other cities put local leaders on notice they likely face a tougher road to keep it. On Monday, members of City Council discussed expected competition for the tournament — an event that brought $29 million worth of spending and 131,000 visitors to town this year.

The Charlotte Regional Visitors Authority, the agency that recruits and promotes tourism events, plans to formally notify the CIAA of its forthcoming tournament bid on Tuesday — the deadline for all prospective sites to make their interest known. 

Bids are due Sept. 9. On Dec. 14, the CIAA board will name its host city for the 2021, 2022 and 2023 tournaments.

Beyond hearing about the tourism value and making vows to fight for the event, council members emphasized what they portrayed as Charlotte’s favorable odds for retaining the CIAA.

“I think we lost control of the narrative,” said council district representative Larken Egleston, who attended the meeting Monday but isn’t a committee member. “The narrative became, ‘The CIAA is leaving Charlotte.’ And we all know that’s not what’s happening. There’s a contract that we’ve all known when it was going to expire and they’re doing what any good business would do, which is explore options that still include Charlotte.”

Council’s economic development committee heard a presentation about the benefits of the men’s and women’s tournaments, played in Charlotte every year since 2006, while also mulling anticipated interest from Atlanta, Baltimore, Richmond and Winston-Salem. 

The CIAA is comprised of 13 historically black colleges and universities. Eight are in North Carolina, including Johnson C. Smith in Charlotte.

The current contract between the conference and the city ends in 2020. Local government provides $2 million annually in subsidies to the tournament, including scholarship donations, free use of the convention center and paying the operating costs at Spectrum Center and Bojangles’ Coliseum.

Egleston’s district includes both of the arenas where CIAA tournament games are played.

Committee leader James Mitchell warned of an insurgent campaign among the four member schools located in the northern portion of the conference’s footprint: Bowie State (Maryland), Lincoln University (Pennsylvania) and Virginia State and Virginia Union. Jacqie McWilliams, the CIAA commissioner, recently told Mitchell those schools want to see the basketball tournament played closer to their campuses, Mitchell said Monday.

The councilman said Baltimore could be of particular concern since Caesars Entertainment opened the city’s first casino there in 2014, located near the tourist-friendly Inner Harbor.

Mike Butts, vice president of sales at the visitors authority, reviewed the latest economic impact study for the CIAA, based on 600 surveys of fans who attended the 2018 tournament between Feb. 27 and March 3. Based on those responses, the visitors authority and the CIAA calculated an overall benefit of $50.5 million, including spin-off benefits from visitor spending.

Direct spending — money spent by visitors on hotel rooms, meals, transportation and other expenses — totaled $28.8 million, an increase of 6.7% over 2017. The CIAA tournament is the city’s most lucrative recurring tourism event, according to the visitors authority.

“It’s a great piece of business,” Butts told the committee.

According to the latest survey results, 68.8% of tournament attendees are alums of CIAA schools and 39% live in North Carolina.

Conference executives have pushed for lower hotel room rates for years in Charlotte. Industry analyst STR reported hotel rates decreased in 2017 and again this year, down from peak rates of $269 in 2016. Last year the peak room rate was $255; in 2018, it fell slightly, to $252.

Steady growth in new hotels uptown played a key role in a jump in CIAA tournament occupancy in the center city this year, according to STR figures. In addition, while peak rates declined, hotel premiums during tournament week remained well above typical prices in uptown ($200 to $252 per night versus non-CIAA averages of $184) and countywide ($137 to $164 versus $121).

Two other councilmen who aren’t committee members — Tariq Bokhari and Braxton Winston — also sat in on the economic development meeting. Bokhari, one of two council Republicans (Ed Driggsis the other), and Winston pressed visitors authority business analyst Heath Dillard on the methodology of the impact estimates for the CIAA Tournament.

Winston asked whether allowances are made for business lost during the tournament, such as companies and workers who may change their behavior patterns in uptown because of the crowds. Dillard said the studies don’t account for displaced workers and customers. Winston also hopes to get more detail on which businesses and workers benefit, posing a hypothetical question about whether a restaurant rented out for a private party helps or hurts bartenders, who often rely on customer tips. And so on.

Bokhari said that while he remains confident the CIAA produces sizable net gains for the city, parsing the details and methodology would be valuable, particularly with inevitable debates coming over the benefits of hosting the 2020 Republican National Convention.

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$28M construction loan secured for uptown hotel

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Construction financing has been secured for a new hotel in uptown Charlotte.

A $28 million construction loan has been arranged for a joint venture that's building a 176-room Even Hotel at the Stonewall Station mixed-use development. Georgia developer Mayfair Street Partners and Florida real estate private equity group Sefira Capital are developing the hotel, which is being built using modular construction.

Mark Ebersold at NorthMarq Capital arranged the construction loan on behalf of the borrower through a local bank lender and a New York-based mezzanine lender. NorthMarq is a commercial real estate financial intermediary based in Minneapolis.

The Even Hotel is one of two hotels to be built at Stonewall Station. It will be developed on a 0.4-acre site fronting Caldwell Street while another developer, Alabama-based Yedla Management Co., is spearheading a 180-room Home2 Suites by Hilton hotel next door at the hard corner of Stonewall and Caldwell streets. The hotels represent the last phase of the mixed-use Stonewall Station project, which also includes a 36,000-square-foot Whole Foods Market that opened last month, additional retail space to be leased, Crescent Communities' 458-unit apartment development and a 1,350-space parking deck. Charlotte-based Asana Partners recently acquired most of the retail at Stonewall Station, including Whole Foods, for nearly $34.1 million.

Mayfair acquired the hotel site last summer for $4.5 million. The Even Hotel, Charlotte's first, will include a fitness center, healthy food and beverage options and in-room fitness, true to the flag's wellness focus.

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Convention bid now in question?

While a Charlotte delegation is planning to make the trip to Austin, Texas, later this month where the Republican National Committee is expected to pick the host city for the 2020 Republican National Convention, it's now not clear Charlotte's bid will have the full support of city government.

According to several media reports, some Charlotte City Council members are unsure how they will vote when bid comes before an open council meeting. So far, all council discussions of the bid have been behind closed doors.

Lawana Mayfield is the only council member who has publicly expressed opposition to Charlotte's bid, WSOC-TV reports. The station says liberal activists plan to protest the convention bid at future council meetings.

The Charlotte Observer reports another council member, Justin Harlow, a Democrat representing northwest Charlotte, is concerned about protests. At-large council member Democrat Braxton Winston said in a Facebook video that the decision to host the convention should be about more than economic development.

The Charlotte City Council has a 9-2 Democratic majority. Mayor Vi Lyles announced her support the the RNC 2020 bid in February. “I think we’re going to have an opportunity to once again showcase our great city,” Lyles said at the time.

NCGOP Executive Director Dallas Woodhouse, who has worked with Charlotte on the bid, said in a statement: "We are proud of the strong partnership between NCGOP, city, county and tourism officials to bring N.C. and Charlotte the 2020 RNC Convention. N.C. should be proud so many can set politics to the side for economic development opportunities."

The GOP hosts its quarterly meetings in Texas starting July 18. 

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UNC Charlotte plans $84M hotel, conference center on campus

Ronald Reagan still lived in the White House when UNC Charlotte first added an on-campus hotel and conference center to its wish list. Now, the reality of such a project could be little more than two years away.

On Monday, UNCC chancellor Phil Dubois and representatives from the Charlotte Regional Visitors Authority made a joint pitch to City Council for the long-sought hotel and conference center. Under the terms negotiated by the school and the tourism agency, the hotel and conference center would cost $84 million to build and open in time for the 2020 school year. 

The 4.4-acre site targeted for the project is located at the J.W. Clay Boulevard-UNCC stop on the Blue Line Extension light-rail line, located at the intersection of North Tryon Street. It requires approval from the zoning commission, a process already begun by the university.

Of the $84 million construction cost, a portion of existing tourism taxes would account for $8 million. Council would have to approve the visitors authority’s funding for the hotel. A vote is anticipated at the Aug. 27 council meeting.

All but $2 million of the remaining $76 million would come from the UNC Charlotte Foundation. The foundation would provide its portion by issuing $45 million in bonds, contributing $9 million in cash and raising $20 million through private investment. Marriott would kick in $2 million. 

The hotel will be a 226-room Marriott with a 24,000-square-foot conference center and a 132-space parking deck.

Dubois and visitors authority consultant Ron Kimble told council the conference center is twice the size of what similar-sized hotels usually build. The reason: Anticipated demand for academic conferences and other events driven by the on-campus location.

The visitors authority based its proposed investment in the project on the likelihood of campus conferences and meetings creating demand at nearby hotels in University City, potential bookings for large conventions in uptown because of the easy light-rail proximity carrying convention-goers from the campus hotel to uptown and simulcast connections to UNCC’s center city campus spurring more activity at both sites.

Part of the arrangement would include an ownership share for the visitors authority in the conference center’s ballroom and meeting rooms. Terms of that agreement with the university have yet to be negotiated. UNCC’s foundation would own the property and be responsible for its operations and maintenance.

Others involved in the project include the university’s trustees board, Stormont Hospitality (development manager), Sage Hospitality (hotel operator), Cooper Carry (architect), Balfour Beatty (general contractor), Hilltop Securities (financial advisors) and Jones Lang LaSalle (market analysis).

The $1.2 billion light-rail line connecting UNCC’s main campus and uptown along a nine-mile route opened in March, better connecting the school with the city’s central business district. Backers of the hotel and conference center believe this project will help the tourism sector and UNCC.

Based on estimates and analysis compiled by the university’s advisors and partners, the hotel and conference center would add $9 million combined in local and state taxes while creating 210 jobs. Projections for the hotel in its seventh year of operation include $13 million in room revenue, $5.5 million worth of food and beverage sales and a room-occupancy rate of 73.5%.

“This is a unique new addition to the tourism landscape,” Kimble told me Monday. “It’s a unique hotel that would have conference center on the light-rail line at the front door of the university on North Tryon Street and it would be digitally and electronically connected to the uptown campus building and to the convention center.”

Dubois, the chancellor, told CBJ it’s taken several decades for the conditions at and around UNCC to make the hotel project viable.

Growth in University City, surging enrollment near 30,000 students and the light-rail line opened this year make a more powerful case for building the hotel.

“Our argument is we can make all boats rise by trying to attract to the region, to University City and the campus, organizations that typically don’t come to Charlotte now because we don’t have a campus-based hotel,” Dubois said. “That was the case I’m making and (council will) have a month to think about it.”

If council approves the project by the end of summer, plans call for construction to start in January. The hotel would open in August 2020. 

Also at the council meeting on Monday, members unanimously approved a $20 million police station to be built uptown — a project deferred two weeks ago when some members grew frustrated over existing diversity contracting programs.

Since then, council’s economic development committee has expanded its scrutiny of those programs while also deciding not to hold up the police station any longer. Local firm Edifice landed the $20 million contract on Monday and will build the three-story, 31,000-square-foot station at West 5th and West 6th streets.

Ed Driggs, a council Republican, said that approving the project this week signaled to the business community the city won’t seek to change terms after a deal is negotiated. Previously, some on council hoped to revamp the diversity program in time to apply new standards to the CMPD station.

“We can’t stop everything” until the new standards are finished, Driggs told me.

Council moved ahead with a $20 million project connecting Bojangles’ Coliseum and Ovens Auditorium on Monday, approving Barnhill Contracting as the construction firm. Of that amount, construction accounts for $17 million of the budget with the rest going to design fees, pre-construction and other expenses. Odell Associates is the architect.

Bojangles’-Ovens and the CMPD uptown station have goals of 14% participation for small businesses and 10% for minority-owned firms. Work on the connector building will start later this year and finish in early-2020; the police station has an anticipated opening date of mid-2020.

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Changes Made to Law Requiring Hotels to Display Human Trafficking Posters

As the NC General Assembly enters the final stretch of its 2018 short session, the North Carolina Travel Industry Association went to work (at CAHA’s request) on a modification to a 2017 law requiring hotels, restaurants and welcome centers to display a controversial human trafficking poster in their lobbies. The law required every hotel and restaurant that holds an ABC permit to display the posters in plain view of the public. While CAHA firmly supports any initiative that helps to prevent human trafficking, the signs did not display a message of welcome and hospitality.

NCTIA and CAHA worked with legislative leaders to modify the language in a new bill, Senate Bill 335 (Budget Technical Corrections and Study). The new language now reads: All permittees shall prominently display on the premises in a place that is clearly conspicuous and visible to employees and the public a public awareness sign created and provided by the North Carolina Human Trafficking Commission that contains the National Human Trafficking Resource Hotline information.

Senate Bill 335 passed the Senate on Wednesday and was approved by the House on Thursday. The bill is now on Governor Roy Cooper’s desk and will likely take effect without a veto. Barring a veto, the law will now limit the requirement to back-of-the-house display in plain visible view of employees.

CAHA leadership is currently meeting with the CMPD to gain a better understanding of the human trafficking issue as it relates to our community and how we might further support initiatives that bring an end to human trafficking. More information will be shared at the CAHA General Manager’s meeting on July 16, 2018 at the Ritz Carlton. General Managers can RSVP online at http://www.charlotteareahotels.com/meetings/.

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Kessler CEO talks plans for $110M luxury boutique hotel in uptown

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Expect this $110 million boutique hotel to bring a little sparkle — and funk— to uptown.

Construction is officially underway on the Grand Bohemian Hotel Charlotte. Plans call for that 254-room, 15-floor hotel to open in March 2020.

A groundbreaking was held Thursday, but this is a project three years in the making, says Richard Kessler, CEO of The Kessler Collection. 

Kessler has been hands-on in the entire process to bring the Grand Bohemian to Charlotte, from choosing the city and site to working with designers on the project.

“What we’re building will be here for decades. We’re adding to the city and skyline for decades to come,” Kessler says.

He was drawn to the Queen City because of its future potential — and need for a unique hotel. Expect classical architecture and contemporary touches — all with an Argentinian flair.

“We’re not creating hotels. We are creating entertainment centers,” Kessler says. “It’s a piece of art.”

That Orlando, Fla.-based hospitality company acquired a 0.6-acre site next to the Carillon Tower at Trade and Church streets in 2015 for a little more than $3 million. 

The hotel will have 32 suites. An open-concept restaurant will bring the flavors of Argentina to Charlotte with a steak-oriented menu. 

A lounge and bar with sidewalk and park seating as well as a Starbucks are planned.

The 16th floor will be home to a rooftop bar with views of the Queen City.

It also houses the signature Poseidon spa with services such as hot stone massage, lavender peppermint scalp treatment and aqua gel facial masks in addition to a 24-hour fitness center with cardio machines and custom-programmed music.

here’s also 18,000 square feet of customizable meeting space for everything from corporate functions and holiday parties to weddings. That includes a mix of indoor and outdoor space with three breakout meeting rooms, a private dining room, a 4,400-square-foot ballroom and as well as a rooftop terrace.

Think hundreds of pieces of dynamic art throughout the hotel. (Side note: Kessler himself buys that art.) 

Expect rooms to cost in the $300 range, Kessler says.

The Grand Bohemian flag is part of Marriott’s Autograph Collection.

The Kessler Collection’s portfolio includes nine luxury boutique hotels, including sister properties in Asheville and Charleston, S.C.

“People really enjoy our hotels because we do something different than anything in the marketplace,” Kessler says. “In most cities we’ve been in we’ve been the No. 1 market leader.”

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Site for 1,000-room Charlotte convention hotel to be selected this summer

A city consultant and the CEO of the Charlotte Regional Visitors Authority said Monday that discussions on a 1,000-room convention hotel will likely shift to selecting a site and beginning talks with prospective developers this summer. Those plans surfaced during a presentation to City Council that outlined anticipated funding needs for a slew of projects in the next five years to be paid for using existing tourism taxes.

Tom Murray, the visitors authority executive, last year told CBJ and industry leaders that a convention hotel would make Charlotte more competitive when recruiting conferences and conventions. He reiterated on Monday the need for a large-scale hotel under the tourism arm’s control, allowing the city to contract large room blocks at discounted rates to attract conventions.

Though he declined to disclose specific sites, Murray said it would be preferable to locate land adjacent to the convention center. The convention center, opened in 1995, is located on College Street, bounded by Stonewall and Brevard streets and Martin Luther King Jr. Boulevard.

Former city manager Ron Kimble, who has consulted on tourism projects since his retirement in January 2017, told council, “We also have had conversations with you, with the community, that have been in the media regarding the need for a 1,000-room hotel that would rise all tides and raise all boats in the hospitality industry and bring new, bigger conventions to Charlotte.”

No specific amounts were mentioned, but, based on precedents established in similarly sized cities, public money would likely account for 30% or more of a convention hotel. Assuming 1,000 rooms, construction would be in the range of $350 million, meaning $100 million or more could be sought from taxpayers.

Rival cities including Austin, Baltimore, Cleveland, Indianapolis, Louisville and Nashville have all planned or opened similar projects with significant public money.

“We’ve got make sure we stay competitive in the marketplace,” Kimble said. “There will be an action coming to you sometime this summer regarding the opportunity to partner on an upgrade to the convention center that will also involve the possibility of a new 1,000-room hotel.”

Last year, council approved spending $110 million on convention center renovations and expansion to be repaid using a portion of existing tourism tax revenue. A final vote on the construction contracts will be taken this fall. 

Construction is slated to begin next winter and be finished in 2021. 

Murray emphasized in a discussion with reporters after the presentation that no agreements have been reached with a hotel developer. A site idea will likely be brought to council later this year.

In a presentation last year to industry executives, Murray and others asserted a convention hotel would help existing hotels, citing industry data from rival cities that have recently opened similar projects. The visitors authority CEO pointed to 93 consecutive months of industry growth in Charlotte as proof there is enough demand to absorb a 1,000-room hotel. 

The city’s first convention hotel, a 700-room Westin, opened in 2003. City money accounted for $16 million of that project’s $143 million cost. In return, city government received use of 500 of the 1,600 parking spaces in an adjacent deck as well as some of the hotel’s conference rooms.

“Ideally, it would be adjacent,” Murray said of a 1,000-hotel room. No hotel brands or representatives have been contacted yet, he added.

Charlotte has seen a proliferation of new hotels opened or planned in recent years, including an increase of 5.6% in the number of rooms during the past year.

The city is considered the likely choice to land the 2020 Republican National Convention since other anticipated contenders declined to submit bids. Last year, Charlotte hosted the PGA Championship and, in February 2019, the NBA All-Star Game will be here. The Democratic National Convention came to Charlotte in 2012.

Murray said those successes point to more growth and opportunity in the years ahead — opportunity that requires more rooms and convention space to be fully realized. LaWana Mayfield, a council Democrat, wondered aloud why public investment is needed when private companies are already building hotels without government investment or encouragement. Kimble referred to the need for the visitors authority to have control of blocks of rooms in one location at reduced prices, an offer that is much easier to make for a subsidized hotel.

“You have spent wisely, you have spent and invested strategically,” Kimble told council during his presentation, summing up tourism tax spending commitments. “You’ve invested where you get the greatest return on the input of the revenues for the assets built. I would say past City Councils have been extremely, extremely successful in creating return on investment.”

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Charlotte's booming restaurant scene fuels rising wages

The competition for talent is on as more restaurants stake out their place in Charlotte’s fast-growing dining scene. A shallow labor pool is driving up wages and causing restaurateurs to re-examine benefits and perks to retain employees — all at the cost of the bottom line.

“People are really struggling to fill basic-level positions,” says Kris Reid, executive director of the Piedmont Culinary Guild. “There’s just not enough bodies.”

Reid herself formerly worked as a chef. 

The guild works to promote 248 local chefs and farmers, encouraging them to showcase the flavors of the Piedmont by keeping their supply chain local. But rising employment costs are taking a toll on that effort as restaurants balance customer expectations for quality with pricing pressures.

A search of Indeed.com produced more than 4,000 restaurant job opportunities here, with options available from fast food to upscale dining.

Operators are going to be forced to think outside the box on hiring, Reid says. For example, the guild is exploring community dinners instead of traditional job fairs with a goal of highlighting food and beverage as a fun, community-based industry.

“We’re sort of in a labor crisis. Everyone really is struggling and trying to find a solution,” Reid says. Currently, 38% of all restaurant operators nationwide report recruitment and retention of labor is a top concern, says Hudson Riehle, vice president of research for the National Restaurant Association. “With a growing number of restaurants, obviously the underlying labor supply has tightened,” Riehle says.

One out of every 10 jobs in the United States is in the restaurant industry where employment is expected to top 15 million in 2018.

Hiring has always been a challenge. Now, that’s heightened by increased competition for employees and a shift in workforce expectations, says Frank Scibelli, founder of FS Food Group. 

For example, these days it’s harder to find employees who want to work nights and weekends while missing time with friends and family. 

“We’re trying to get more progressive because it’s not going to go away,” he says.

His Charlotte-based restaurant group employs roughly 500 at Midwood Smokehouse, Paco’s Tacos & Tequila, Yafo Kitchen and Mama Ricotta’s.

Wages are up about 10% in the past few years. The company has added perks such as a 401(k) program, paid vacations, meals and discounts to sister concepts to help attract talent. 

FS Food Group has a progam that pays prospective employees to come in for the day and shadow staff.

“We want it to be a fit our way as well as theirs,” Scibelli says.

He’s seen that new staff requires more training and better communication. Employees learn early about paths to potentially advance their FS Food Group careers, he adds. “It’s not all glamorous work,” Scibelli says. “It’s a tough job. But the people who love it here stay forever.”

It doesn’t hurt that wages in the restaurant industry have risen faster than anywhere else in the private sector, Riehle says. That gives employers another tool to increase recruitment odds and retain staff.

That wage growth is backed by Indeed’s job listings. Job posts with wages listed topped North Carolina’s minimum wage of $7.25. 

The soon-to-open Brewers at 4001 Yancey is looking for line cooks, prep cooks and dishwashers. The pay? $10 to $14 an hour. DeSano Pizzeria Napoletana had listings in the $12-to-$15 range for bartenders and servers. And Eddie V’s in uptown was offering up to $18 an hour.

An experienced line cook at the soon-to-open Superica can earn up to $20 an hour, says Andy Palermo, senior general manager at Ford Fry Restaurants’ Tex-Mex concepts.

The Atlanta-based company enters the Charlotte market later this month with a 7,000-square-foot restaurant in South End.

But it’s not all about the pay. Full-time employees are eligible for paid-time off, health benefits and other perks. There’s also a path for development and growth within the company, Palermo says. “People are interested in hearing what’s in it for me. We’re really strongly committed to creating a great working experience for them.”

He says well-themed job ads and targeted recruiting trips were key in lining up staff. Superica will have up to 110 hourly employees.

Duckworth’s Kitchen & Taphouse recently revamped its Park Road location. A trimmed-down menu and new seating layout helps increase functionality in the kitchen, says Kevin Stevens, district manager and operating partner for Duckworth’s.

It also makes it easier to deal with staffing challenges.

Gone are the days of applicants walking in the door in search of a job. Stevens says that for every 17 contacts he gets off a job board, one applicant may show up for an interview. “You can definitely tell there’s a change in the workforce. It will be interesting to see how it evolves.”

A recent Duckworth’s ad offers to pay $1 more an hour if an employee brings employment verification. It also gives employee bonuses for referring new hires. “That’s pretty much how competitive it has gotten. You really hate to steal someone from someone else,” Stevens says.

H.P. Patel, co-founder of Tandur Indian Kitchen, says his biggest challenge was lining up a staff while still under construction in SouthPark. “Labor is tight. Employees don’t want to wait for construction to end. They want a job now.”

Tandur invested more than $1 million into its first location here, which opened last month.

The fact this is a new concept to market exacerbated the challenge. Tandur aims to make Indian cuisine more mainstream, but that comes with its own issues. “People can’t wrap their head around an Indian restaurant, fast casual and how does this all work,” Patel says.

Hourly positions can pay up to $12, depending on position, with tip sharing as well. But he says creating a culture for employees is most important.

Having a fun work environment can help staff deal with busy times and improve the overall customer experience, too. “If you’re having fun, it’s a completely different experience,” Patel says.

The Restaurant Association’s Riehle says it is critical to deliver on the dining experience as consumers spend more food dollars eating out.

Today, roughly 48% of the food dollar is spent in restaurants — up from 25% in 1955.

“If that last restaurant experience for the patron doesn’t meet their value received for price paid, then they can be quite quick to vote with their feet,” he says.

Operators are forced to balance rising wages with customer expectations and the bottom line. 

Restaurateur Jon Dressler estimates he’s paying staff up to 30% more than five years ago.

“Wages have increased — and we like that,” he says.

His Rare Roots Hospitality Group employs roughly 250 workers across five restaurants. His most recent venture, Fin & Fino, opened last month in uptown. 

Dressler and wife Kim invested more than $1 million into the social seafood house concept.

He concedes higher wages are not good for the bottom line, but restaurant workers have been underpaid for years. Too often the restaurant industry is seen as a stepping stone instead of a career, he adds.

“We provide a real job. We work real hours, we make real money,” he says. “The restaurant world is a passion. It’s something that’s in your soul, your fiber, your being.”

Dressler says he’s escaped many of the pitfalls tied to hiring by creating a culture that puts family first and inspires loyalty. Current employees can vouch for potential hires — a recommendation Dressler takes to heart— and management is promoted from within when possible.

“Our growth has always been very strategic and centered around our people,” he says.

Operating multiple restaurants allows him to invest in training and set expectations in advance of a new restaurant’s opening. That translates in the hospitality, service and overall experience Rare Roots establishments can offer, Dressler says.

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Passengers at Charlotte Douglas can catch some shut-eye as new sleep pods set to open

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A new concession at Charlotte Douglas International Airport will soon allow passengers to recharge their batteries in between flights.

Minute Suites announced last summer it had signed on to add six pods — each about 56 square feet — and a shower at Charlotte Douglas. The company is set to open with a grand-opening event scheduled for May 1.

Minute Suites is located at CLT's atrium area, just past the security checkpoint areas in the central part of the airport. The pods, which were slated to open at the Charlotte airport back in December, are equipped so that travelers can nap, watch TV or use a computer as well as work in a private space. They'll be open 24 hours a day.

Travelers can pay $42 to book a suite for a minimum of an hour. The rate for additional use in 15-minute increments is $10.50. The cost of booking a suite in eight-hour blocks ranges between $140 and $160. A separate fee is charged for shower usage. For a complete breakdown of pricing, click here.

This marks the fourth airport for Minutes Suites. It's also at Hartsfield-Jackson Atlanta International Airport, Philadelphia International Airport and Dallas-Fort Worth International Airport.

In the midst of a major 10-year, $10 billion overhaul, the Charlotte airport is in the process of revamping its concession mix. That includes an Olde Mecklenburg Brewery bar kiosk at Concourse E and a full-service restaurant and taproom by NoDa Brewing Co. that's set to open this summer.

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Hotel with rooftop concept coming to former Kimpton site in Dilworth

A Charlotte-based hospitality development group has plans to build hotels in two prominent locations in the Queen City.

OmShera Hotel Group acquired the roughly 1.2-acre site at East Worthington and Cleveland avenues in the fall and will develop a six-story, 135-room Courtyard by Marriott hotel there. The site, in the Dilworth neighborhood, was previously planned to be a 128-room Kimpton hotel but those plans fell through. OmShera purchased the site from Catellus Group for $3.9 million in October.

Kush Anandani, director at OmShera Group, said the Dilworth hotel will be a custom Courtyard as opposed to a more prototypical hotel. He said the hotel will be a very similar design as what was approved in Catellus' rezoning a few years ago, in which the hotel group worked closely with the Dilworth neighborhood.

Anandani said the hotel will have an "urban, local community" feel. It will include a roughly 5,000-square-foot rooftop restaurant/bar concept that Erin Zitelli-Davis at The Chambers Group is marketing on behalf of OmShera, Anandani said.

"We’re definitely looking for a local concept and something that brings out the flavors of Charlotte and Dilworth," he added.

The Courtyard is expected to break ground by the end of this year, with a projected opening in the spring of 2020, Anandani said.

CAHA Continues to Expand Jobs Initiative through Partnerships

Represented by 10 member hotels, the Charlotte Area Hotel Association participated in the City of Charlotte’s Career Discovery Day on April 17th at the Charlotte Convention Center. Participation is part of our ongoing initiative to introduce and educate the next generation of employees about careers in the Charlotte hospitality industry. More than 4,000 students looking to enter the workforce representing 36 Charlotte Mecklenburg Schools were exposed to several “Industry Zones”—Hospitality being one of the few private-sector zones among the more than 100 vendors. Big thanks to the CRVA for lending us the “Partners in Hospitality” archway, which helped Charlotte's hospitality industry stand out in a crowded hall.

CAHA member hotels displayed career opportunities with the students who are hungry to find their path. The message was consistent throughout the day—hospitality is the industry of upward mobility; come in with a good attitude and willingness to work hard, and you can create a successful, long term career.

Moving forward, CAHA has several plans in place to strengthen its' hospitality jobs initiative. An employee recruitment video, filmed locally last month is in the final stages of editing. It features young hotel employees, all in supervisory or managerial roles, who shared personal experiences of upward mobility in the hospitality industry. All started in line positions but found opportunity and training to progress in their careers. "The best way to share an upward mobility story to young adults is for them to hear from young adults who are not too removed from initial career decisions," said Vince Chelena, CAHA executive director. "We captured stories from amazing employees who truly believe they have found a career in hospitality. Through a partnership with CMS, graduating students will be exposed to the hospitality industry as a great place to work and grow professionally."

If you were not able to participate in the Career Discovery Day this year, there is another opportunity on the horizon to showcase our industry to the next generation of young leaders. The Mayor’s Youth Employment Program will be hosting their Summer Kickoff Event in June at Spectrum Arena. Executives from different industries will be present to coach students on interviewing, career readiness training, and other career building skills. CAHA will again be represented through its' member hotels. More information about the job fair will be coming soon.

"We tip our hat to the Mayor’s Youth Employment Program and CMS for putting together an incredibly successful event," said Chelena. "We look forward to continuing our partnership with both organizations and introducing students and career seekers to Charlotte's hospitality industry."