Candace Cline: Hi there and welcome to Your Gateway to Wealth and Fulfillment podcast. I'm Candace Cline, a financial advisor on the Gateway Wealth Management team at UBS Financial Services.
Andrew Kittelson: And I'm Andrew Kittelson, senior vice president. We're located in Charlotte, North Carolina and can be reached at 704-362-8260. Our guest today is Terry Shook of Shook Kelley. He's not affiliated with UBS and his views are his own. Welcome everyone to the Your Gateway to Wealth and Fulfillment podcast. I'm Andrew Kittelson here with my partner...
Candace Cline: Candace Cline and we're excited to have Terry Shook here with us today of Shook Kelley.
Andrew Kittelson: Terry, very excited, gotten to know you a lot over the last several years and looking forward to talking about your career. You've been working for a long time and keep going. So you're clearly passionate about what you want to do. We want to explore what really motivates you in your developments and what you do here at Shook Kelley, which from what I understand you started in 1992. A lot of people think about starting their own business. You actually took the jump and did that. Tell us a little bit about what motivated you to start your own firm and how you got here.
Terry Shook: Thanks, Andrew. It actually goes back before 1992 because this was my second firm actually. I came out of UNC Charlotte and then NC State for some graduate work back in 1977 and joined a fledgling firm that had been started by a mentor of mine from college, a college professor, Ron Morgan. So because it was a startup firm that we could make our own rules, nobody in the firm really, including the other partner, Terry Dalton, had ever really worked for large firms. As many architects do, they do start their firms later in the career. Here we were, a bunch of people just decided let's start a firm, and we did had a lot of success, but around 1992 with that recession, you guys are in the financial world. That 1990, '91 kind of problem that developed there in the commercial field more than anything else, commercial ending firm went dwindled down and decided, "Well, it's time to start a new firm."
So '92 we did and we started it, and I say we, I was a senior partner, but I brought with me Kevin Kelley who later became a partner with some real goals in mind about how business should unfold and how our profession, which is architecture should be involved in it. So one of the things that we were really focused upon, we were enamored with advertising. Brand development wasn't even something that was on people's lips in '92 as much as it is now, but we really love storytelling. We love messaging and we believe that things that connect with people emotionally, deep emotions, things that trigger experiences they may have had in childhood or things that they see are important to them as they make their way through life could be reflected in products and places and then incorporated into their own daily life. So that was something that we really wanted to explore, which hadn't been really explored in architecture particularly.
Andrew Kittelson: Yeah, so you were really ahead of the curve with that, and I know a building community is a big component of the design development you do.
Terry Shook: That's true. And as we built this firm, my partner, Kevin Kelley, began to focus more on the retail world, retail stores. In fact, he's got a book out now called, Irreplaceable, that talks about that in many ways it's an operations manual for people who particularly are active in the retail world. But my personal focus, as you stated, Andrew, is about how we can build communities for the future that really connect people across what are generally considered divisions, economic wealth, age, race and focusing more upon the things human beings have in common and support one another than focusing on things that divide us.
And we think about this in an abstract way in our society in terms of politics, when it gets right down to it, the increments that matter are those that we have in our day-to-day lives, and many of those, the work environment of course, are the clubs we choose to join, but it really comes down to the communities we inhabit in the neighborhoods, the people you might see on the street, the people you might see in the corridor, the people you will find that see in the coffee shop and the restaurants and the other things we do that form what we call civil society.
Those are the things that I'm focused upon. And at the middle of it, of course, is when you talk about cities, is it affordable? Can everyone in that continuum find a seat at the table, or more importantly, a place to lay their head at night so they become a really active and fulfilled and thriving member of a greater society. Those are things that are very important to me, and this tracked my entire career, clumsily at first, blindly, no doubt, but as you get near the end of one's career, they start to become a sharper focus.
Candace Cline: Like you're super passionate about connecting communities. How do you maintain that passion after such a long and successful career?
Terry Shook: Well, funny, if it is a passion, you find ways to manifest it and you have to be an optimist. In fact, I want a pitch out there for people. Good friend of mine, Michael Graff, has a new, I might say a blog, I guess it is, I'm not sure what he calls it, but it's called the Charlotte Optimist. All he does is write about positive stories, and I'm the same way around people in Charlotte who making the place better. I actively try to do that in the places we do because I believe all of us are yearning for those kind of connections. This is not the prior to the modern day, let's say prior to the end of World War II, communities and prior to technology taking over our lives, of course, is that we lived in the relatively close-knit communities and fostered social connections and supportive connections.
But as people spread after World War II and ripped asunder those connections they had generally with place and with their own families and went to new places on the globe or at least within America to make their lives, those kind of social networks they depended upon weren't there for them. They're looking for alternative ones. Down our days, we default to these websites and everything else, or we're on a podcast now. I mean, we're creating a family. You're creating a family with what you're doing here. Hopefully you're fostering that. That's the modern world. But as architects, we are really focused upon that analog world, that place, which we still have to... We haven't figured out how to sleep virtually now in those things and how to cook a meal and how to gather. So that's what we're about. And in fact, our tagline for our firm is convening. We are all about convening people in physical spaces and places around ideas that support a way of life that's meaningful to them and their family and their friends.
Andrew Kittelson: I moved to Charlotte in 1997. I'm not sure exactly when the development of South End started as we know it today, but when I moved here, I can remember my mother visiting and telling me, "Andrew, we were in uptown Charlotte and we couldn't find a cup of coffee." And it was a place where people would come work during the week, leave at night, weren't there on the weekends. Charlotte was known as a place where you could come start. It was relatively inexpensive. You could start a family. I think it was a little more family oriented. Fast-forward to today, and it's one of the hot cities where all the young folks are moving to. You got a lot of employers coming here to soak up the young talent that is here. A lot of them live in South End. You're one of the people that really kicked off the development of the South End, the light rail, and now it's just one of the most popular places, again, for young people to find jobs. Tell us about your experience developing South End and some lessons you've learned there.
Terry Shook: That's a good question. Yes, I and my partner, Kevin Kelley, are proud to say we were very much there at the genesis of South End. And when we left our uptown firm and started then it was a Shook Design Group and became Shook Kelley, we consciously wanted to see as an experiment if we couldn't create that new kind of place. We were both fans of Alvin Toffler and his work Future Shock, which back in those days was a big thing, talking about the new world and the things that are going to disrupt patterns that we have always clung to. And we looked at that too, uptown being the land, the bankers and the three-piece blue suits and the lawyers and all this stuff. We said, "Well, to use an accountant or everybody, there is a compensating balance to everything." And in this case, "We said even the guys in the three-piece blue suits and the white shirts need that kind of un-cola."
They need something that's different than their normal life. And we just felt like South End could do that. We were reading the tea leaves of the trends in other places and the restlessness in many ways about how particularly the later stage boomers and then the following after that, the first wave of the millennials would want to live their lives, and plus it was cheap. So we were I think the first tenant in Atherton Mill, we paid $3 per square foot for our space back then because the only thing we could afford, we were a startup. And then we started looking around and said, "This is a place where we can manifest these kind of ideas." And of course there was a Tony Presley who was a very interesting type of developer who was in the area who was representing Boston interests with Atherton Mill for that, and we started kicking that around.
Then there was the people like Gaines Brown who was advocating for the Charlotte Trolley, which in another life when Dan Morrill had found that thing, I was head of another private foundation and we gave some money to that to get that thing going, get that car restored. So it was a lot of people who basically you might say were the grandfathers of South End. It was just a grassroots effort that this was the kind of place that was needed. And we all by dent of will basically in persuasion, managed to create the platform for all that today as South End that it could happen. You were right. It's some of the most expensive real estate around it is noted nationally for its real estate development. It's a bit overheated in certain ways one might say. As I look back on your question of the lessons learned, I don't think any of us kind of knew the kind of success it would ultimately have.
As I stated, we were behind a thing called the Charlotte Trolley, and that vintage trolley ran there for only one year before it caught the imagination of a lot of people and became the leverage of vote for light rail transit, which really kicked it up another notch because that was something that the development community understood the value of transit, which was true, a lot of naysayers about transit do you knew it. But I'll tell you, from a real estate perspective, it is really, has been and can be in other places a game changer. And I do believe it's necessary that would take a four or five podcasts to dwell into that, the pros and cons and why it's important. But I do believe it is, I do believe it's important for Charlotte's future, but one thing about South End that if you had to criticism in certain ways, I've heard people say that South End became actually a halfway house for highly educated, primarily white kids between graduating from college before they grew up and entered real life.
Abiding criticism but there's a lot of truth in that. So it's something I think when we create our new neighborhoods going forward that we need to keep in mind not to create that kind of barriers so everyone can be a part of it. It needs to encompass the full range of people who make this city, who perform the jobs such as the lower end jobs in our hospitals, the people who work in the county, school teachers, you go on and on at people in the workforce, we're creating a city that they can't afford. South End shows that in glaring detail, and that's something I think is very important.
Andrew Kittelson: Well, you've now moved your office. You're anchored here on the West side of Charlotte, near Johnson C. Smith University, and you drive around here and you can see a bit of the gentrification going on. Where do you take the lessons learned from South End and build the community that you want to see here on the West side?
Terry Shook: Good question, Andrew. We moved here purposefully. We sold our building, which we owned in South End. It became the line, we sold it to Portman Holdings, and then we started looking around for a new place to go and there were a number of different places we could have gone and were clients like at Optimist Park. A big client of ours was starting a project there, which has become really important and successful. But I kept circling back to this area. I'd been on a committee here one time that had been led by Charlotte Center City Partners. I was on the board of that at the time, and I was totally intrigued for many reasons of this area. And I said, my Charlotte Partners and I, that this is where I think we need to make our new home. And they agreed because we need to be part of a genuine community that has a long history that is experiencing change.
For some people, it's gentrification and it is a four-letter word, gentrification, but at the core of gentrification is about change. Cities do change, they always have. But the question is how can you harness that change so that it benefits not only people who are coming into our city and want to make a home here and value urban environments, but particularly those that are being affected by that change, which we call gentrification, tall order, big task, but something I think that's worthy for people to focus upon and we decided to get our shoulder behind it. Now obviously you don't just come into a place in my mind and without an invitation. I mean that type of hubris is what we've done. And I say we, that's the normal business and typically white society has done for the longest time. Fortunately in this case, a friend of mine was Darrel Williams who owned Neighboring Concepts, another architectural firm.
I basically asked Darrel, I said, Darrel, "I'd like to come over here and join you in your efforts. If you don't think it's valuable and something that you would not want to work on together with us, I won't come." But Darrel, if you knew Darrel, he's got a great big heart. And he saw, "Yes, please do come." So we did and we came and became part of this. The building we're in now doing this podcast was part of a complex that Darrel had designed with the Griffin Brothers, Griffin Companies and to be a part for JCSU, and we wanted to do a new building here, Darrel and I and the Griffins and a number of others within this community. It had been the first new office building within this corridor, this Five Points corridor. And of course COVID happened and that put an end to those plans. But I was undaunted wanting to be involved in something very active and something did appear on the scene, and that's the chance to do a new co-op market in the Five Points area.
Candace Cline: So that's underway right now or is it?
Terry Shook: Yes, it is. It's been a two and a half year march of various things, but it was a grassroots undertaking. It came out of a master planning visioning exercise that neighboring concepts when Darrel was still there, he since sold the company and Shook Kelley did. We donated half our time and the Knight Foundation picked up the rest of our costs and other costs that within this we did a huge community visioning exercise. And what came out of that among old-time residents and newcomers was this need for a grocery store. And that's a big part of our practice. We started here, but now centered in California. Kevin really has really taken that to great heights nationally, and we know the value that places that serve food, sell it to you or prepare or sell it to you to take home can have in pulling communities together.
It's one of those necessary and vital places in our life. So we said, "Here's the vehicle to manifest those beliefs that I am my Charlotte partners have had about building community." So we became very active in that with Jatanya Adams [inaudible 00:18:16]. It was just amazing. And with Charles Thomas and the Knight Foundation and Ralphine Caldwell with LISC, which is a national organization focused upon building community, particularly around housing. And we all put our shoulders to it and said, "What can we do?" And it's been two and a half years, I would say we're making great progress toward that. Knight Foundation has given $6 million of a $20 million philanthropic raise that we're doing that's focused upon two things. Well of course the co-op supermarket, but the other part, five million of that is to actually buy the land upon which this will sit so that it will be owned in perpetuity by a land trust.
See, that's the thing about gentrification. It all comes down to the land, who owns it, and who controls it. If you have community interests that own big chunks of the land, then they can decide what the nature and character of their neighborhood and community is going to be and start to achieve a balance that purely market forces can't do or won't do. They could, but it's not the nature of capitalism. And I don't mean that as a criticism. I mean that purely as an observation. The question always is that and always has been, how can capitalism be focused upon achieving great returns upon that capital, but creating the type of society and communities that continue to bring those returns?
We know that in our history, some of our major industrialists have focused upon that very question. There's an economic theory called Fordism, right? Henry Ford proposed it back when he started his businesses and he gathered all the other industrialists at the time who were making all the other products of modern life and said, "Wait a minute, if we don't treat our workers fairly, if we don't pay them adequately, who do we think we're going to sell all this stuff to?"
And said, "It's important to create an economic foundation that truly is at the core of a forward-thinking capitalist model." And we lost that. We as a society have lost that fundamental tenet that I think built America throughout the early part of the 20th century. It is a different place, but I think through the financial tools that we have now, the investment tools through a variety of things such as your 501
So they're worried about that. And these people are charged with cleaning up our surgical suites in our hospitals where we go in to get surgeries, all of us, and we're all trying not to get some infectious disease of us. Who are we kidding? They're as much a part of our modern day world as any one of us. So it's important if we're going to have a fully functioning modern city that these people not only get paid adequately, that also that they have a place to live that they can afford, which is my focus upon this whole thing. And so we have this fully functioning city. This is what Henry Ford at the core of Fordism taught us, and we forgot, it's time to get back to that.
Andrew Kittelson: And getting back to that, you think about the cities that Charlotte is often compared to, whether that's Austin or Nashville, the Raleigh-Durham area. Do you have a sense of where we are compared to those other cities because they're all facing this problem? Are we behind the curve, ahead of the curve? Where are we relative to those cities?
Terry Shook: That's a very good question, Andrew, and I should focus a little more time in understanding the full answer that I'll give you my gut answer. And it comes out of many years living and practicing within Charlotte. I think we're ahead. All you have to do is look back to the events that happened with the killing of Keith Lamont Scott, and what happened across the city, this rise of consciousness inside the business community and people who are at the upper echelons of society and how they reached across lines and made connections that heretofore had not been made. I'll think of one person in particular, someone that everyone knows, and that's Hugh McCall.
There were a number of us part of this at the time that consciously said, "We need to wake up and around this dynamic I talked about and do better." And I think a lot of things been done. It was out of that consciousness that Mark Ethridge and Erskine Bowles formed asset partners, which is leveraging capital for lower returns, but to buy naturally occurring affordable housing communities, apartment buildings, and keeping the rents affordable. It's those type initiatives that we see coming out of Charlotte like we did Brightwalk on the right outside Charlotte for the similar kinds of reasons that was all coming out of those type of thoughts. So I'm very hopeful. I think Charlotte's leading the way and I think we will continue to lead that way.
Candace Cline: It sounds like you've done so much to help the city of Charlotte progress to where it is now, but more work to be done. You also mentioned national work, and it's my understanding that you helped revitalize Detroit. Would you mind telling us a little bit more about that?
Terry Shook: I tell you that's an interesting story. Yes, they put out a search nationally for planners. I want to say it wasn't Detroit, it was Dan Gilbert of his companies. People know Dan Gilbert, Rocket Mortgage and Rocket Mortgage exactly. And before that, it was Quicken Loans back when I worked for him, and of course people know him for owning the Cleveland Cavaliers as much as anything I guess, but he was moving his entire company, all his companies. I think it was like 8,000 plus employees at the time from outside of Detroit, outside of Eight Mile. I mean, that's more than an Eminem song. That's a reality in Detroit about what separates the now historically black inner city of Detroit from the suburban white areas that surround it because he knew like South End that his employees wanted to be a part of something different and holistic and even a little edgy.
And he also knew there were great economic gains if he could pull it off. I mean, he is a deconsummate capitalist, but he grew up in Detroit. I think his dad was on the bar, so I mean in Detroit. So he loves that city. So we were fortunate to go through a process and be selected to be the master planner and strategist as he tried to bring everything back. And it was really funny. I mean, we started this thing, we'd walk the streets of downtown Detroit and with the eye of an urban planner and also in a real estate developer, I'd say, "There's a great building. I don't know if it's available. I would pick that one up and tell him why." Come back to the Charrettes the next morning. He already had it under contract. It was like, "Wow, what money can do." But we were fortunate in that, and I think I'm very bullish on Detroit.
Not only what Dan's efforts have been, but also the Ilitch family. You got these twin Medici's there, sort of like we had in the days of when Hugh McColl and Ed Crutchfield had the two banks here, you have the same dynamic in Detroit and you have other partners, other partners that are coming in. So what it proves that question, I'm glad you asked it, is that the kind of things that are underway in Charlotte have been underway, particularly like you talk about South End. These things are not just the products of an odd magical thinking, right? They're universal, they can be applied everywhere and other people are doing them who care about cities and care about the people who inhabit them.
Andrew Kittelson: Doesn't that group in Detroit, from what I've heard, they require the companies that they do business with to relocate or have a significant presence in downtown Detroit?
Terry Shook: They do. It's part of a broader economic development strategy for the city. Nothing's really, in a good thriving city, nothing is happenstance. I mean, look in the city of Charlotte, between Charlotte Center City partners and the other organizations that are about economic development, you have to have a full and complete and genuine story. Just like I've been describing that this is a place where you were to invest your dollars not only in the here and now, but for the long term. Let's be honest. I mean a lot of people, we live in many ways in a temporal world. I mean a lot of times people will make a move for only a three to five year window and then they'll seek to go somewhere else where the next opportunity might be. Fine. But what if you can continue to be that next big story that as they say in a three to five year window, they look around and say, "No, this is still the place we need to be." You have to be conscious about creating your own future.
Andrew Kittelson: Let's talk a little bit about the future of Charlotte. Where do we go from here? We've discussed transit. That's obviously got to be a key component to all of this. I know you've done some projects and which you don't use... You built apartments that have limited car spaces or parts of apartments where there are no cars and maybe they've got access to cars. I don't know if there's any other project in Charlotte that is carless like that. Just generally with the development of Five Points in all of this where is Charlotte 10, 20 years from now?
Terry Shook: Well, obviously, I was an early adopter of rail. I mean back in the '90s I was very much part of this rail initiative we have in Charlotte, but everything is evolutionary and one of the things we've learned in Charlotte from the rail, unless you have only maybe a handful of cities in the world that have a transit rich environment where on a grid of networks you can just jump on one train and always be in walking distance of where you need to go. In Charlotte, it's about solving the first mile in the last mile problem for people. And Charlotte does benefit with the micro transit is doing that. They are technical solutions, political solutions to that, and Charlotte seems to be embracing that. So that's an important piece for the future of Charlotte in this. The next important piece is, which is what we're demonstrating in Five Points because this is on the gold line.
I mean, that's not our project. That's a very, very big component of what we're doing is leveraging these investments we've made so that people actually don't need a car. It doesn't say you can't do without having access to a car, but having access to a car and owning a car are two different things. And that's what we pioneered with a very innovative client of mine. I am proud to call him my protege, Harrison Tucker with Space Craft over in Optimist Park. The first building that we did a part of his ultimate, I think 4,000 units is what he plans for over there. He is already 1,500 on the ground. The first building was totally carless, but 80 units, but you had access five cars on the site. When you rented a car there, you had access to a car, came with your rent.
You just had to schedule it. And it is changed now where there's some part, I think it's like 0.35 parking for cars on site now. You start at one place and you find it, you tune it just like tuning the radio knob in the old days to find the right station. But the part of that this is important is that as AAA says, a car costs you I think 850 or I think they revised it, maybe $880 per month, that's after tax to own and operate a car. And if you're taking transit to work, particularly now, once we get into this micro transit, so everybody broadens the access for transit is that it starts to beg the question, "Well, why do I want to own a car and have it sit there all day long? It's not being used. Are there other things that I can do?"
And they are, there are other solutions similar to what we had, and we're going to be pioneering that in Five Points in our space. We'll have spaces that are available either on a fractional lease or a subscription model where you pay and you have access to a car on an hourly or even a daily rental. And then of course, back in the day, we didn't have Ubers and lifts and those kinds of things out there either. Technology is constantly bringing us other options to just owning the car like one used to own a horse, that's where the car came from. And people like old guys like me still like their cars. I want people to think that I'm in my lifestyle. That's something that I necessarily embrace, but for other people, you can save money. We struggle. When we do affordable housing, put this in perspective, we, the greater we, society, government, everything, we struggle sometimes just to save people $400 a month off their rent, which is a big deal for a lot of people.
That's a huge thing between poverty and having a meaningful life for their kids and their family or for themselves. If you can save people 350, $400 a month and their transportation costs, that just adds to that. It's just about the decisions you can make if you live in the city. If you say, "I can live on the transit line and I can find a way with micro transit to get to my work, and I do not have to own that car, but have access to one when I need it," then that's the great thing to do.
Candace Cline: That's fascinating. Thank you for sharing all that information with us. We hear you've got some big news and a book coming out. Please tell us more about that.
Terry Shook: Well, I have, I'll tell you the title too. it'll be out next year. It's called, The Serial Gentrifier, and I'm leaning right into it. And it is lessons from my past of things I've done where it had that unintentional consequence and how particularly with the project with Five Points, the lessons learned and how we, people like myself who are agents of change can behave in a different way and bring communities together to create better places. So I'm looking, it's already finished. It's at the editor now. So it'll be out next year. So that'll be fun stuff.
Andrew Kittelson: That's great. We're looking forward to reading it. And, Terry, really appreciate all the work you do in building community and making Charlotte such a special place for all of us to live and work in. So thank you for that. And thank you for your time today.
Candace Cline: Thank you.
Terry Shook: It was my pleasure.
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