Plans to renovate Independence Place, a 179-unit long-stay hotel on Independence Boulevard near Eastway Drive, include hiring and housing homeless veterans for the project.
Denver, Colo.-based R. Investments will renovate the east Charlotte hotel and add kitchens to the rooms, new gym and yoga space and redo the onsite restaurant using the Trump administration’s Opportunity Zone program, a tax break designed to pump money into low-income neighborhoods to spur development.
Travis Steffens, president and CEO of R Investments, said Thursday the company expects to spend $10.5 million with the purchase and improvements.
In what Steffens calls “conscious capitalism,” the company hires, trains, and houses people who are homeless to learn construction trades and work on projects. Steffens said he expects to hire 50 people for the Independence Place project, with an emphasis on hiring veterans.
“We would like to stop looking at this challenge with homelessness as a charity problem and start looking at it as a reflection of the country, as a reflection of who we are,” he said. “We need to all step up to help fix it.”
Steffens said the goal is to provide quality housing and resources to help people improve their financial stability. Rooms will be renovated on a rolling basis so current residents won’t be displaced. Rooms currently rent for between $900 and $1,000 a month, a price Steffens said they plan to continue.
Opportunity Zones in Charlotte
The Opportunity Zones initiative was created as part of the tax overhaul Congress passed in 2017.
After selling an asset such as land or stocks, investors are typically charged what’s known as a capital gains tax. But the tax is deferred if investors put their money into what’s known as a “Qualified Opportunity Fund.”
Those funds make investments in real estate or businesses in any of the 8,700 opportunity zones across urban and rural areas in the country, including 252 in North Carolina. The tax benefits increase the longer the investor holds their money in the fund — and if they stay invested for at least 10 years, any new profits the project makes are not taxed.
Proponents say the program brings needed funds to neighborhoods struggling with disinvestment. There are 17 opportunity zones in Charlotte, spanning from west Charlotte to the area around North Tryon and Interstate 85. There are also three zones in east Charlotte near the old Eastland Mall site, which is in the process of being redeveloped.
But neighborhood advocates in Charlotte say it has the potential to further gentrification. There are no rules mandating what type of projects investors should fund, such as affordable housing.
The program initially had bipartisan support — including from Democratic senator and former presidential candidate Cory Booker. But criticism has grown as reports emerged that the wealthy and politically connected are using the tax break to build luxury apartments, hotels and other high-end developments.
There are no public reporting requirements, which make the program difficult to track. Developers in Charlotte have announced projects ranging from gated apartments in Tryon Hills north of uptown to affordable units in west Charlotte’s Seversville neighborhood.
A report released in June by the Urban Institute found that the program is falling short of its goal to spur community benefits, instead providing the biggest gains to projects with high returns.
The Independence Place project shows how the Opportunity Zone program could be replicated elsewhere, said Ashley Bell, regional administrator for the Small Business Administration and policy advisor for the White House Opportunity & Revitalization Council.
“The goal is to make sure that all of the over 250 opportunity zones in the state of North Carolina have a plan to succeed,” he said. “And the best way to do that is to make sure you’re addressing community’s needs.”
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