Dallas is coming for Charlotte's banking crown
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Charlotte skyline as seen from Romare Bearden Park in Uptown. Photo: Laura Barrero Tousley/Axios
For years, Charlotte has compared itself to its closest southern city, Atlanta. But a new peer city has emerged as one of Charlotte's top rivals in the wake of the pandemic and revival of corporate relocations: Dallas.
Why it matters: Charlotte is increasingly going head-to-head with Dallas in economic development deals worth thousands of jobs and billions in investment, particularly as Dallas comes for the Queen City's banking crown, dubbing itself "Y'all Street."
- "They're trying to compare themselves to an alternative to New York City or Wall Street," Charlotte Center City Partners' Michael Smith says. "And we're going to have to compete."
The big picture: Charlotte, home to Bank of America's headquarters, is the No. 2 banking hub in the country, based on assets.
- But the Dallas metro has quickly moved up to the second-largest hub for financial workers, behind only New York, with about 382,000 professionals compared to Charlotte's 125,000. (Although the Dallas labor force is 3x larger than Charlotte's.)
Case in point: Scotiabank, one of the largest banks in North America, last year chose Dallas over Charlotte for its $60 million U.S. regional hub with 1,020 jobs, even though Charlotte offered $19 million more in local and state incentives, CBJ reported.
- North Carolina was hoping the aggressive incentives would offset "differences" from Texas in operational costs, such as construction and taxes, according to state documents.
State of play: Charlotte's intensifying rivalry with Dallas has grown in the post-COVID era. Before the pandemic, Charlotte's primary competition was Nashville, Austin, and sometimes Tampa and Atlanta, Tracy Dodson of the Charlotte Regional Business Alliance tells Axios.
- As corporate relocations ramp up, companies — especially West Coast ones — are eyeing talent in East Coast markets like Charlotte, Dodson says, whereas years ago they might have zeroed in on central places like Texas.
- On average, 157 people move to the Charlotte region every day, according to the Alliance. More than two-thirds of them are of prime working age, 20 to 34 years old. Charlotte added more jobs than any other metro except New York City last year, the Ledger reported, citing Labor Department statistics.
What we're watching: Dallas, which now has three stock exchanges, has grown as a financial hub over the last 25 years.
- Goldman Sachs is building a $500 million tower downtown for more than 5,000 employees. Wells Fargo, which has its largest employee base in Charlotte, recently expanded in the Dallas-Fort Worth area with a new campus for 4,500 workers.
Follow the money: Many businesses choose Texas because there's no state corporate or income tax. Texas has snuck up on North Carolina on CNBC's best states for business list, a ranking NC rigorously boasts about.
- However, the Alliance in Charlotte argues that "it makes up for it with heavy property taxes."
- Mecklenburg County has one of the lowest property tax rates (about 0.75%), while Dallas County has one of the highest (about 1.7%). If you own an office tower, that roughly 1% difference can cost you millions.
- Economic developers here point to Dallas' sprawl as one of its disadvantages, and tout Charlotte's shorter commute times and dense business center.
The other side: Mike Rosa, SVP of economic development at the Dallas Regional Chamber (think Dallas' version of Dodson) says when pitching Dallas, the Chamber talks about the region's diversity of sectors, talent pool with expertise in those various industries, its central U.S. location, and over 40 Fortune 1000 headquarters, many of which are willing to vouch for Dallas.
- Dallas and Charlotte both offer comparatively affordable costs of living.
- Dallas' average rent is $100 less than Charlotte's at $1,700, and the median home sales price is about $2,000 less at $432,400, Charlotte's State of the Center City report shows.
- "We don't have a beach. We don't have a mountain. But we're prosperous," Rosa says. "You put a little extra jingle in your pocket, and you get on one of those American Airlines flights, like I know you can do in Charlotte, and go to a lot of places."
The intrigue: To grow its economy, Charlotte's next move is to essentially pull a Dallas by fostering growth in new economic sectors.
- In particular, Charlotte is growing its tech and life sciences sectors with the development of the North Tryon Tech Hub and The Pearl, respectively. Both are prominent sectors in Dallas.
The bottom line: "I don't want to call us an underdog," Dodson says, "but we're this smaller market that is now showing up against bigger competitors. And hopefully, we'll see the trend to where we're winning these projects."