Behind the Scenes in Charlotte 2011

Friday, December 30, 2011 In just about any business, there are individuals in the background who are shaping strategy and executing the changes that make the difference between prot and loss. And such players seem to be playing an increasing role as the economy continues to struggle in its recovery from the Great Recession. Here are some key behind-the-scenes leaders whove made a signicant difference in the Charlotte region in 2011 and whose impact will continue to be felt in 2012 and beyond. Tom Shircliff Tom Shircliff wants Charlotte to have the smartest and most sustainable downtown towers in the country. Shircliff, co-founder of consulting company IntelligentBuildings, is one of the key players behind the scenes in Envision: Charlotte, a publicprivate partnership expected to slash energy consumption in uptown by 20% in ve years. It hopes to accomplish that, in part, by tracking the use of electricity in Charlottes ofce towers. The $5.3 million experiment kicked off in October, with 64 buildings taking part.
Tom Shircliff, co-founder, Intelligent Buildings

You can spot which ones are involved in Envision: Charlotte by the widescreen digital kiosks installed in each buildings lobby.

The screens show energy use in real-time and offer suggestions on how employees and building managers can save on electricity bills. The main actors orchestrating the smart-grid pilot are Duke Energy Corp., Cisco Systems Inc., Charlotte Center City Partners and Verizon Wireless. Big-name participants include the city of Charlotte, Bank of America Corp. and Wells Fargo & Co. Shircliff has had a crucial role in steering Envision: Charlotte, which is now organized as a nonprot committed to conserving energy. And its focus areas have been expanded to include air, water and waste. Some 51 individuals representing 28 uptown organizations have signed on with the nonprot. Shircliffs business background meshes well with Envisions mission. IntelligentBuildings offers consulting services related to energy efciency. Hes also frequently on the speaking circuit, addressing commercial real estate professionals and others about the use of technology in reducing power consumption in ofce buildings. Susan Stabley

Carolyn Flowers Moving ahead means doing more with less for the Charlotte Area Transit System . Carolyn Flowers, chief executive at CATS, spent much of this year grappling with budget issues while working to keep two signature projects, the light-rail extension and commuter rail, on track. The Metropolitan Transit Commission, the governing body that oversees how receipts from the half-cent transit tax are spent, this year approved a proposal by CATS to shorten the Blue Line Extension and reduce its price by 20% through the elimination and consolidation of stops and stations. The project will be built to link uptown with UNC Charlotte. It will now end at the university rather than Interstate 485, which lies 1.2 miles north of the school. The estimated price tag is $1.1 billion, with a targeted opening date of early 2017. CATS and the city hope to avoid the controversy and expense of cost overruns from the rst light-rail line with a new oversight program. It focuses on better education and clearer guidelines for prospective contractors and other vendors, as well as moredetailed cost estimates. In 2007, the $463 million Lynx line between Pineville and uptown opened at twice the initial cost estimate. Shortening the Blue Line Extension to 9.4 miles allowed Flowers to keep the project in line for federal funding, which is expected to account for half of the construction tab.

photo NANCY PIERCE

Carolyn Flowers, chief executive at CATS At the same time, the transit commission and CATS revamped proposals for the $452 million, 25-mile commuter line between uptown and Iredell County. That rail project could be ready by 2018, with funding derived in part from designated tax areas along the corridor to take advantage of related development. Reviving the languishing commuter proposal marks a victory for Flowers, who worked with a transit subcommittee, regional politicians, the Lake Norman Transportation Commission and consultants to nd the money. Strained budgets at all levels of government could stall the rail lines at any time, but Flowers has demonstrated a resiliency to advance major transit projects even in the face of scarce funding. Erik Spanberg Cathy Bessant Bank of America Corp. Chief Executive Brian Moynihan did most of the talking in 2011. But it was Cathy Bessant, the banks chief technology and operations ofcer, who saw much of the action. Bessants Charlotte-based division includes more than 100,000 employees worldwide. Its responsible for all the technology across BofAs massive franchise, including a network of 17,800 ATMs and onlineand mobile-banking platforms.

In 2011, the Bessant-led group faced multiple challenges. In January, BofA appeared to be targeted by WikiLeaks for a major data dump after a bank executives computer fell into the wrong hands. But the threat zzled when the data turned out to be old and not that desirable. Then in the fall, BofAs website, which processes millions of online bank transactions daily, suffered a week of outages. Some speculated the snafu was related to hackers and heavy trafc after the bank announced plans for a $5 monthly debit-card fee. Most recently, the division has begun laying off workers, including some in Charlotte, as the company seeks to trim expenses. Despite its problems, BofA again boasts top honors from multiple technology groups for its onlinebanking, mobile-banking applications and other tech components. And amid all the distractions, Bessant has remained above the fray. American Banker named her one of the most powerful women in banking. And industry trade publication Waters Technology chose Bessant as its 2011 chief information ofcer of the year. As Moynihan shook up his management ranks during the summer, Bessant survived and advanced just as she has done for three decades at BofA. As a former Charlotte Chamber chair, she remains a big cheerleader for the Queen City, even as the company decentralizes its management ranks. Adam ODaniel Doug Stephan Doug Stephan and his partners typically stay under the radar, but they spent a lot of time in 2011 working on their investment in the high-prole EpiCentre property uptown. Stephan is a principal at Vision Ventures . His rm teamed up with Mount Vernon Asset Management, headed by Geoffrey Curme, to purchase the debt on the 302,000-square-foot entertainment and retail property through a limited liability company called Blue Air 2010. The two rms are backed nancially by hedge funds that include the Baupost Group and are focused on underwriting, acquiring and resolving complex problems associated with impaired commercial real estate loans and assets. Complex, indeed: Blue Air is now battling with the developers of the EpiCentre in court, with an eye toward eventually taking control of the property. The web of litigation and limited liability companies involved is the stuff of lawyers dreams. In the meantime, Stephan and his partners look for opportunities to buy more distressed commercial real estate debt, although thats getting harder as more competitors push up the prices. It is harder to nd good deals, he says. There is a great deal of capital pursuing distressed debt and real estate. Stephan says his group is cautious about where it invests, avoiding highly marketed assets that attract multiple bidders. Theyve cooled on apartment deals, but remain open to land, retail properties, bulk condo purchases, and ofce and industrial deals.

Vision Ventures and Mount Vernon have previously purchased the debt at the Rosewood luxury condo complex in Cotswold and more than 80 acres north of uptown. Our outlook on the market in general remains cautious, he says. Will Boye Mike Pruitt Mike Pruitt began 2011 as the low-prole leader of a small investment shop in Ballantyne. Most folks didnt know he also held the key to the future of iconic Hooters of America Inc. restaurant chain. And in January, thanks to his friendship with Hooters founder, the late Robert Brooks, Pruitt played a leading role in the purchase of the company from the Brooks estate. He now owns a stake in the company, sits on its board and is guiding the wings-and-beer joints expansion overseas. Pruitt is chairman and chief executive of Chanticleer Holdings Inc. He founded the micro-cap investment rm in 2005, naming it for the mascot at his alma mater, Coastal Carolina University. Those college ties also led him to Brooks, a major Coastal donor. In exchange for Chanticleers $5 million investment in Hooters of America, Brooks gave Pruitts rm the right of rst refusal to any ownership changes at the chain. So when the Brooks family decided to sell, Pruitt teamed with private-equity investors at H.I.G. Capital and KarpReilly to take control of the company. Hooters of America is the franchisor and operator of 435 Hooters restaurants in 44 states and 28 foreign countries. Pruitt says he shared Brooks vision for the company: Good food, cold beer and pretty girls dont go out of style. After closing the deal, Pruitt refocused Chanticleer almost exclusively on its Hooters stake. And the rm is now leading the restaurants expansion with franchises in South Africa and Australia and plans to eventually open restaurants in Brazil and Europe. By 2014, Pruitt and Chanticleer expect to expand to 31 overseas restaurants from the four they operate today. Adam ODaniel John Cox During 2011, John Cox acquired another duty at the Cabarrus Regional Chamber of Commerce , a role akin to that of a real estate agent. Reeling from a $12,500 tax bill for the organizations headquarters on Dale Earnhardt Boulevard in Concord, the chambers board decided to put the building up for sale.

In September, the Cabarrus Convention and Visitors Bureau moved out of the facility, leaving 3,000 square feet of the 12,500-square-foot chamber building unoccupied. The convention and visitors bureau is now housed in leased space near the Concord Mills mall interchange of Interstate 77. Late in the year, Cox, president and chief executive of the chamber, thought he had a buyer lined up for the building. He declined to identify the prospect. The effort to sell the building is only one cost-reduction measure under way at the chamber. Cox also took a 25% pay cut in September, trimming his total compensation to $122,500. He also furloughed four of the chambers 11 employees for a few hours each week. The chamber made such changes amid nancial challenges. For example, the Cabarrus Board of County Commissioners cut economic-development funding for the organization in 2011, slashing in half a $425,300 request by the chambers business-recruitment arm. The recession has hurt the organization as well, after three large contributors Philip Morris USA, Pillowtex Corp. and CT Communications Inc. either closed their local facilities or were sold in recent years. Ken Elkins Paula Sims In 2011, top-tier Progress Energy Inc. executive Paula Sims had the difcult task of leading the effort to formulate the merger plan for her company and its proposed buyer, Duke Energy Corp. In 2012, as a top Duke executive, she will have what could be a more difcult job executing the plan. When Duke and Progress announced their proposed $26 billion merger almost a year ago, the companies appointed Sims and Dukes A.R. Mullinax as the leaders of integration planning. They headed the effort to nd the best practices among the two companies, determine how to combine operations and decide what the proper size of the company would be. They also have to determine how and where to cut roughly 1,900 positions. Sims has conceded the planning has meant long hours and many weekends of work. And she expects that to continue when the work turns to execution. I wouldnt say that one is easier than the other, she told the Charlotte Business Journal in the fall. Its going to be intense either way. Sims is Progress senior vice president for corporate development and improvement. At the post-merger Duke, she is slated to be executive vice president of innovation and improvement, reporting directly to Chief Executive Bill Johnson. John Downey David Ravin

David Ravin is one of the few real estate developers in Charlotte whos making plans to go vertical anytime soon. Ravin is the former president of the residential division at Crosland , the venerable real estate rm that sold its operating units earlier this year. Now hes chief executive of Northwood Ravin, an apartment development, construction and management rm focused on six Southeastern states. Ravin teamed with New York-based Northwood Investors and bought a chunk of Croslands property-management department after earlier buying its development and construction divisions. While many developers have been sidelined by the prolonged economic slump, the apartment sector is a bright spot in Charlotte, with demand outstripping supply. Inventories remain at low levels, and multifamily developers are busy working to get new units out of the ground. The real estate world has stopped, and the only thing that seems to have a heartbeat is multifamily, Ravin said in October. And because apartments are hot, the sector is attracting some inexperienced players and that could cause problems later, he noted. Everyone has decided theyre going to be a multifamily developer, he says. And everyone seems to be competing for the same sites to put up the same things. Not every vacant site makes sense for multifamily, and not all apartments should be built to the exact same end user, which is the temptation. Northwood Ravin has taken over property management for about 15 apartment complexes, with half of those developments in Charlotte. And the rm is looking at two sites in town for development. Were going to be selective, Ravin says. Northwood has access to a lot of capital, and I think our strategy is to say if a project makes sense, we can do it. Will Boye Ron Carter Ron Carter is focused on transforming Johnson C. Smith University into a top independent urban university. That means raising academic standards as well as giving the university a more prominent role in Charlotte. Carter took over as president of the historically black college in early 2008. Since then, he has been a key player in efforts to expand the campus of JCSU, which has about 1,400 students. He also has been involved in local business and governmental circles, including service on the Charlotte Center City Partners board and the citys streetcar advisory committee. Its all part of Carters push for JCSU to get more involved in the surrounding community. He launched the Center for Applied Leadership and Community Development, which focuses on ways for students and faculty members to engage in social and cultural issues in Charlotte. And he continues to promote efforts to revitalize the neighborhood that surrounds the Charlotte campus. Those activities include the universitys plans to convert the historic George Davis House into a center that will house a program to help young people who are aging out of the foster-care system.

Mosaic Village a $16 million mixed-use development featuring student housing, parking and retail on West Trade Street is under construction. The Art Factory, a 14,000-square-foot cultural center nearby, opened this past year. On campus, a $35 million gift from The Duke Endowment will pay for a science center to house JCSUs expanding STEM an acronym for science, technology, engineering and mathematics program. Construction is set to start in April on the $25 million science center. Some $5.5 million of the endowments funding will support renovations of Duke Hall, a dormitory. The grant also will provide scholarships for international students and students majoring in science and technology, the visual and performing arts, and social work. Jennifer Thomas Gene Cochrane At a time when charitable fundraising is a major challenge, The Duke Endowment is still making big gifts and taking a higher prole locally with a new building. Gene Cochrane, president of the endowment, continues to lead those efforts for the private foundation, which has $2.8 billion in assets. It made local news this year with a $35 million grant to Johnson C. Smith University. The Duke Endowment approved $129.7 million in new grants in 2011. It benets child-care and healthcare organizations, rural United Methodist churches, and four educational institutions designated by founder James B. Duke: Johnson C. Smith, Davidson College, Duke University and Furman University. Cochrane, who has been with the endowment since 1980, says the number and size of grant requests have increased dramatically in the last six months. Its hard because youre saying no to good projects that at other times you really would like to fund, he says. In the years when you dont have as much money yourself, you really are picking those that have the absolute greatest potential. The Duke Endowment plans to break ground in 2012 for a 30,000-square-foot headquarters on East Morehead Street, at the site of the former Frankies Italian Grille. Cochrane says the new home will make the endowment more accessible for visitors from the Carolinas than its uptown ofces. Although the endowment cant say yes to every request, Cochrane notes the down economy means recipients may be able to get more bang for their grant dollars, whether its in lower construction costs for Johnson C. Smith, or another institution trying to recruit a faculty member with extra funding. The recession also creates a number of opportunities, he says, and I hope our grants are helping our institutions take advantage of those opportunities. Will Boye