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Archive for April, 2014

The airport and taxis. Again

Let’s see if the city can get if right — or closer to right — this time. By limiting the number of cab companies that can pick up fares at the airport, the city is picking winners and losers — the companies that can operate at the airport make a lot of money, those that can’t struggle or go out of business all together. Unsurprisingly, political contributions flow from winning cab companies. And there’s also been suggestions that former Mayor Patrick Cannon may have tried to shake down cab companies wanting to get in on the airport action. Even if the suggestion isn’t true, the current arrangement simply encourages corruption. It’s just that simple.

Lots of pols and bureaucrats have no problem with status quo — it gives them control. And that includes current City Manager Ron Carlee, who also continues to claim that corruption in the Queen City is an unpossibility despite Patrick Cannon’s arrest and another ongoing FBI undercover investigation.

The original reason Jerry Orr wanted to limit the number of cab companies that operated out of the airport was so the airport could regulate quality, so that visitors wouldn’t have their perception of the airport, and by extension the city, destroyed by a ride in a run-down cab. It would be ironic indeed if the desire to protect the city’s image resulted in something that caused far more damaged to the city’s brand than a ride in an older cab ever could.

So the city is on the clock, and it has about two weeks to decide what to do next. As the UPoR reports, Charlotte has three options: keep the current arrangement, complete with the same three companies that can operate from the airport; end the artificial limit; or rebid the contract (limit), complete with possibly a higher limit limit on cab companies at CLT. How the city decides to proceed will say much about the nature of Charlotte city government and the city’s civic culture at large — will the powers that be work aggressively to restore public confidence by rooting out corruption and that which might breed corruption or will Ron Carlee’s Sgt. Schultz imitation rule the day? City Council has until mid May to decide.

Bonus observation: Should the FBI divulge more evidence of corruption in city government, it’s difficult to see how Ron Carlee can remain on the job. And that’s true even if the corruption didn’t happen on Carlee shift.

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Air Berlin in trouble

The oneworld alliance, of which American Airlines and now US Airways are key members, has traditionally been weak in Central Europe. Okay, that’s kind of what you get when the alliance’s two biggest European member airlines are British Airways and the Spanish carrier Iberia. The addition of Air Berlin, Germany’ second biggest airline, to the alliance two years ago was suppose to help fill that Central European gap.

So how’s that working out? Not so well, as Air Berlin continues to lose money and is now to the point of having to ask existing shareholders for more cash. So if you were hoping that Air Berlin might fill the role that Lufthansa held when US Airways was in the Star Alliance in generating traffic and flights to Germany from Charlotte, you’ll be rather disappointed.

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Political robocall of the moment

OK, of Thursday evening. But in any case it’s been awhile since I got one: National Right To Life for Thom Tillis. (Not sure there’s much of a difference bewtween Tillis and the other candidates on the issue.) Tillis easily has the most money and (obviously) also has some outside groups spending money on his behalf. The question now is whether Tillis can get to 40 percent of the vote to avoid a runoff or not. We’ll know the answer to that in eight days…

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Apartment rents

The Charlotte Observer offers up a fascinating look into how apartment rents are increasing set much like the airlines price set airfares. Some highlights:

A decade ago, apartment complexes would generally set a price for each type of unit – say a two-bedroom, two-bath floor plan – and that would be that. Possibly, a unit on the top floor could be $10 more.

“Now, with these pricing models, every single unit could have a different price,” said Charles Dalton of RealData, which tracks apartment rates.

The software systems factor in variables such as whether the apartment operator is looking to quickly lease units or keep rents high, said Keith Dunkin, senior vice president for YieldStar, one of the nation’s largest yield management companies. The algorithms also look at how quickly units are being leased and how competitors are pricing their apartments.

At that point, differences between units within an apartment complex can drive prices even farther apart.

and:

But Dunkin, of YieldStar, said that few renters are interested in the nitty-gritty details of how their rents are calculated. He said the systems are actually helpful for consumers because they allow flexibility for residents.

Before these systems, apartment managers might not agree to hold a unit for three weeks before move-in, or offer a five-month lease. Now, the software lets managers set a price for that type of request.

“Most people are just grateful to have the flexibility,” Dunkin said. “Because they have that flexibility in other parts of their lives.”

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Virgin America gets Dallas Love Field gates

And that means no Dallas Love Field flight on Southwest to Charlotte. And with this comes a lesson in exactly how stupid and even antitrust counterproductive policy can be. Recall that for political reasons Love Field (DAL), which is where Southwest flies from in the Dallas metroplex, is limited to only 20 gates. Southwest controls 16, United two, and American two. As part of the deal to get the American Airlines/US Airways merger approved, American agreed to give up a number of gates, including the two it controls at Love Field.

So the Department of Justice invited bids to see who would get Americans’ two gates. American though doesn’t actually currently fly to Love Field. Rather it subleases its two gates to Delta Air Lines. So Delta requested the gates, so it could continue flying from the airport. Southwest, unsurprisingly, also asked for the gates, so that it could increase service from Love Field and those compete in more markets with American, its cross town rival. (American’s biggest hub is at Dallas/Fort Worth International Airport (DFW), which Southwest doesn’t fly to.) And among the places Southwest said it would add a flight to from Love Field if it got the extra gates was Charlotte. Virgin America also asked for the gates.

So who got the gates? Virgin America, so it could shift its flights from DFW, where it of course competes directly against American, over to DAL so it could compete directly on exactly five routes (Los Angeles, Chicago, New York LaGuardia, San Francisco, and Washington Reagan National) against Southwest. Got that?

And it gets worse. So where is Virgin America getting the planes from to fly its new Love Field flights? Why it’s suspending service to Philadelphia, a major US airways hub… You just can’t make this up…

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The Garden Porkway rates poorly

As the UPoR reports, the state’s new road project rating system is out, and it puts a very middling score on the Garden Porkway, placing it 175th out of 399 projects ranked statewide. Given that the proposed toll (in parts) bypass around Gastonia could cost up to $843 million, the odds of the porkway getting built anytime soon would seem rather low. What’s much more likely to happen is that the state may add a lane to Interstate 85 through Gastonia to the US 321 exit, which would cost “only” $198 million. The proposed I-85 widening ranked 16th overall.

And a sure sign a project is a dog is when you get a quote like this as the best argument for it:

“I’m not surprised (I-85) ranked so high,” said Donny Hicks, executive director of the Gaston Economic Development Commission. “But when you look at the parkway question, you have to step back and say common sense says that in 10-15 years from now, the volume of traffic (will require the building of the parkway).”

He said his group will continue to lobby for the parkway.

“When you think about this regionally, that road will also help the northern part of York County,” Hicks said. “It has some positive implications for South Carolina.”

Positive implications for South Carolina? Great, then I’m sure that South Carolina would be willing to kick in a couple hundred million, right?

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Death may come to that infamous round building

I did my masters at N.C. State and was subjected to several classes in Harrelson Hall, which was probably the most bizarre building I’ve ever set foot in. Harrelson is round, which means that the classrooms are pie-shaped. And that makes for a rather interesting learning experience, especially if you’re sitting near the wall. And yes, even the bathroon stalls were wedges. The all-fluorescent lighting was just brutal. I distinctly remember doing a face-plant going down the insanely steep stairs too.

Now comes word that N.C. State is looking at tearing down Harrelson, probably in the summer of 2016. Good. There are some important lessons here: not all that is suppose to be innovative actually works out in practice and not all old build buildings are worth saving.

Bonus thought: Note that even preservationists aren’t exactly rallying to save Harrelson. The Raleigh News & Observer has this quote from blogger John Morris, a N.C. State grad who often writes about the virtues of older buildings:

It is thought-provoking and unique, it definitely adds a lot of character to N.C. State, and especially to the Brickyard. But it just doesn’t do its job very well, and it’s really hard to argue in favor of preserving a structure that just completely and utterly fails on all fronts, other than the exterior appearance.

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Questions about Cannon

Recently wrote a column about the arrest of then Charlotte Mayor Patric Cannon on federal public corruption charges. It will appear in the May print edition of Carolina Journal, but here it is in unedited form a bit early:

North Carolina once had made a name for itself as a clean government state. That reputation has suffered in recent years, with a host of high-profile arrest of public officials on corruption charges. The latest came on March 26, when Charlotte Mayor Patrick Cannon, was arrested for allegedly taking a bribe from a federal agent. Cannon resigned the same day.

There’s a significant difference between this and other recent major public corruption scandals in North Carolina though. Cases like those involving Jim Black and Mike Easley had obvious and well reported jumping off points. That isn’t the case with Cannon’s arrest. No one was expecting Cannon to be arrested on that Wednesday in late March, least of all the then mayor.

At this stage about all we know comes from what’s in the indictment of Cannon:

This investigation was initiated in August 2010 based on a tip and information received from local law enforcement. A local law enforcement officer was working in an undercover capacity on other criminal matters and learned of information that would be helpful to the FBI regarding public corruption. Although the FBI was originally investigating other individuals and other potential criminal activities, the investigators learned that CANNON was potentially involved in illegal activity.

Beginning in 2011, the FBI used undercover agents to target Cannon, who first allegedly accepted a bribe from them in January 2013. He’s alleged to have eventually taken $48,500, plus have the use of a luxury apartment in Charlotte, and taken an all-expense-paid trip to Las Vegas with his wife. The FBI claims that Cannon demanded substantially more, including “a point” — one percent of the value — of a $125 million potential investment along Charlotte’s proposed streetcar line.

The indictment raises a number of rather obvious questions. From what state or local law-enforcement agency was the undercover cop that originally provided the tip to the FBI? And what sort of possible corruption does the tip involve? And what of that related federal investigation into “other individuals and other potential criminal activities” that is apparently ongoing?

Turning to Cannon’s involvement, why specifically did the FBI take the next step and target Cannon? And why did they think he would take a bribe? That’s a particularly important issue because as of now Cannon only faces charges related to the money he allegedly took from the FBI — the agency is currently not alleging that any other action that Cannon took was corrupt.

OK, the seemingly obvious answer — the indictment says as much — is that the FBI heard credible stories that Cannon might be willing to take a bribe. But why isn’t the FBI charging him with taking bribes in other cases? Or is that the next step in the investigation? Or might Cannon cut a deal to testify against others in the relate investigation?
Complicating matters is that Cannon’s service as an elected official was not continuous. Cannon was on city council from 1993 through 2005 and then again from 2009 through 2013, when he was elected mayor. So does Cannon’s apparent willingness to take a bribe extend back to his previous stint on city council or was it a habit he developed only after he returned to the board? Or put another, with the statue of limitation having likely run out on any public corruption-related charges related to Cannon’s previous stint on city council, did anything that happened in those previous 12 years on the board in any way shape the FBI’s investigation? Or did Cannon suddenly just become so very noticeable corrupt that the FBI was on his trail within two years?

And if Cannon was on the take, what other recent Charlotte city actions might have been influenced by money being passed in designer briefcases? And are other Charlotte city or Mecklenburg County officials, be they elected or city or county staff, on the take?

So, yes, there are a lot of unanswered questions at this stage. Hopefully, we’ll soon have answers — because until we know the extent of the ethical rot, the Queen City and by extension the state can’t begin to rebuild its reputation.

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Another 12th Congressional District preview

This time it’s from the Greensboro News & Record and it can be found here. Enjoy.

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12th Congressional District update

From the UPoR:

Who has money: Alma Adams. She who is known for her hats has raised the most money and has the most money on hand. Adams is also the only woman in the race, which could also be a significant advantage.

Who doesn’t have money: James “Smuggie” Mitchell, who’s dropping out. Mitchell says that the arrest Patrick Cannon really cut into his fundraising ability, which is kind of ironic. The people he was counting on for $1,000 were suddenly only writing only $100 or $200 checks. “I think the whole city of Charlotte has been kind of in a shock mode,” Mitchell said to the UPoR.

Who’s trying to the spin the race. Or has the most interesting spin on the race: Sen. Malcolm Graham of Charlotte. “When you’ve got one candidate in Greensboro and four others in Charlotte the math becomes tricky for a Charlotte-based candidate. That’s why it’s important we rally around the one in Charlotte with the best chance of winning otherwise we lose the seat to Greensboro.” Of course, Graham thinks that the candidate from Charlotte everyone should rally around is him. Note that he’s effectively saying that Adams will get through to the runoff.

Demographic note: With the amount of population growth in North Carolina, we can expect the state to add a congressional seat come 2022. And with Mecklenburg County’s population growing as much as it has, it may well also eliminate the need for a Charlotte to Greensboro bug-splat of a district to elect an African-American.

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