His wife’s grandfather, Lex Marsh, started Marsh Properties in the 1920s. McLawhorn, president of the company, was asked to step into a leadership position in 1996, and has been with the company for more than 18 years.
Most recently, Marsh received a rezoning for its 60-acre Sedgefield community project, where it plans to tear down the existing housing units and replace them with denser, multifamily housing structures, and revitalize the neighborhood with new office buildings and retail stores, including a Harris Teeter.
When McLawhorn is away from the office, he enjoys watching his children play sports and attempting to play golf (his words, not mine). Maybe he should stick to real estate.
How did you get into the business?
I started my career with PricewaterhouseCoopers and had gotten my master’s in accounting with a concentration in tax. My clients were primarily real estate clients. I had a strong interest in real estate, but knew I didn’t want to be in tax the rest of my life, so after about three years I went over to First Union (now Wells Fargo) and worked on the strategy and analyst side for First Union mortgage for a few years.
What is your average day like?
This year has been heavy on the rezoning with Sedgefield, and before that with apartments in Dilworth. In addition to overseeing the direction of the company, I’ll focus on zoning at times and on development at times, and there are certainly times where I get pulled into the property management side, or whatever our current issues are. But what I enjoy is the development side, you know, creating the vision of what we’re trying to deliver, figuring out what the market is and then delivering a product that our residents will be interested in and be willing to, honestly, pay top dollar for, because if you’re building something you want it to be at the top of the market and be something that we’ll be proud of as a company. And since it’s a family business, there’s a component of our business that’s not present if I were working for, let’s say, Crescent Communities. But Marsh being here for a long time and us being a family business, there’s a lot of pride in our product and our service and in what we deliver. One way we live that out is we’re very interested in our employees, and they feel that from us, and then they are also very interested in our residents. We have commercial tenants, and I know the owners of those shops, and we have relationships with them. There’s probably a time that we would approach something differently because we have those relationships.
How is development in Charlotte different from other cities?
I think, particularly in North Carolina, Charlotte has a distinct downtown. Compared to the Triangle and the Triad, which are three cities that make up a geographic area, Charlotte has a strong urban core of one city, and so our downtown and the urban neighborhoods surrounding it are much stronger and larger. The other thing that has made a real difference, particularly in this latest apartment boom, is the transit, because the city created the zoning classification. When you create infrastructure and then you create the zoning around infrastructure, the development typically comes. I was in New York City in September, and the high line through the meat-packing district, which is an elevated walkway, would be another example of that. They created the zoning around it, and you’re getting this high density, which there it’s mostly condos, but it’s the same theory. It really creates an opportunity for transformation in an area, just like we’ve seen in South End.
What are your thoughts on form-based zoning?
Anytime there’s change, I think everybody gets nervous. And to date, neighbors, developers and the planning staff understand how today’s code works. And again, you talk about changing something that people have finally gotten to a point of understanding, and it can make all of us a little nervous. But if everybody knew what the box was, and then we know how to develop inside that box, which is what I understand form-based zoning to be: “Here’s what you do, here’s what you commit to, and you’re going to develop inside these parameters.” To me that would be a much easier process. But city council has also got to maintain that, and say, “Yes, this is what we’re doing, and no, we’re not going to say you need these types of windows or this sort of building material.” Once you do this form-based zoning, you’ve got to say, “This is it.” Don’t try to monkey with it and try to up the ante one more level. From a developer’s side, I think our concern would be that they would try and take form-based zoning and take it to yet another level, where it would be even more ornery instead of something that’s easier to understand and something that creates a level playing field for everyone. TOD is a zoning classification that is along the transit line, and for the most part I think that’s worked pretty well. And from my understanding of it, it’s like form-based zoning in that, “Here’s the guidelines, here’s what you have to do if you’re in TOD.” I think for the most part, that TOD zoning has worked to support the infrastructure that the city put there.
What was Marsh’s zoning strategy for Sedgefield?
Sedgefield is at the south end of South End, which has developed a lot of residential over the past few years, and what’s needed was the retail and office. It was natural that we would include that. There’s retail there today on South Boulevard, but having retail that really fit the urban user that’s moving into South End, and that user’s lifestyle, was something we thought it was time to address. And because it’s close to a transit stop, having the residential – and the fact that residential is our focus as a company – made a lot of sense for us.
How do you handle opposition to a neighborhood that’s being redeveloped?
It takes a lot of communication. We started meeting with residents about the Sedgefield rezoning in January, and shared our plans with them when we filed our rezoning in April. I would guess we met with them six or eight times along the way, and it took a lot of communication – not necessarily face to face – but keeping the lines of communication open as to what our vision was and what their vision for the neighborhood was, and how those two things can intersect.
Do you think there are areas in Charlotte that are experiencing overbuilding?
We’ve been fortunate in South End that there’s been a lot of new apartments come online, but they’ve been sequenced. And I don’t think it was planned, I just think it’s just worked out so that those communities have been able to lease up, and there hasn’t been this cut-throat competition that you see when there are four places trying to fill up. I think the communities for the most part, particularly the new ones, are holding their own and doing really well, and a lot of that is because of the timing. The demographics really are in favor of multifamily. What we’re seeing is that the urban renter of today wants their own space, but they want great community space, and I think the communities that are being built now are really hitting that market. And we’ve got a nice period of time before we’re going to see that change at least in multifamily product.
What is your take on the apartment boom?
I certainly think it would be remarkable if we maintained the pace that we’ve experienced the last few years, but we were playing catch-up. We are in the housing business, and even if there’s a downturn, people still need a place to live, particularly in the rental side. A lot of time during a downturn, that population grows, as it did. And I don’t think that we can sustain the pace of the delivery of announcements we’ve had during the past few years, but I don’t think it’s going to come to a halt either. The demographics are such that there continues to be a need for multifamily housing, and it’s provided the choices that people want. All real estate goes in cycles, so there will certainly be a time where it contracts more than it is today, but I don’t think that’s a year from now, and I don’t necessarily think it’s two years from now. I think it’s farther out than that.