REGIONAL REPORT

WEST

Building on History

BY DONNA KIMURA

AFFORDABLE HOUSING FINANCE • April 2008

SAN DIEGO -- The former Wyoming National Bank building sat empty for more than two decades, with little hope for it to ever be restored.

Ideas were floated to turn the building into city offices, a hotel, even a culinary school, but those dreams faded without coming true.

It finally took local developer Stephen Grimshaw to transform the downtown eyesore. He turned what had become the world's fanciest pigeon roost into 45 affordable apartments.

"It's what I do," said Grimshaw of Grimshaw Investments, LLC. "I thought with an influx of Sec. 42 low-income housing tax credits (LIHTCs), it was the way to convert it."

His hard work, which included easing community concerns and overcoming a major fire, resulted in the creation of 45 new homes. It also recently earned Grimshaw the title of "person of the year" by the Casper Journal.

The city of Casper had purchased the building from an out-of-state owner several years ago and then sent out a request for letters of interest to nearly two dozen developers in the community.

Just two developers replied, and Grimshaw was the only one to submit a proposal. He purchased the building for about $287,000 in 2006, with the help of a city-financed, 0 percent, short-term loan.

Some people voiced concern that affordable housing would attract the wrong crowd to the neighborhood, but Grimshaw convinced them that would not happen. "I reiterated to the City Council and the naysayers that those people are their sisters, brothers, mothers, fathers, grandparents, and neighbors," he said. "Just because they do not make more than 60 percent of the area median income (AMI), they are not any less of a citizen of the community than anyone else."

While addressing the community concerns, Grimshaw went about assembling the financing needed for the approximately $7 million project.

Most of the funding came from equity generated by LIHTCs from the Wyoming Community Development Authority (WCDA). Grimshaw had done his first tax credit project in 1997 and understood the complexities of the financing program.

The project also used HOME funds from WCDA and a construction loan from Stearns Bank. The Richman Group Affordable Housing Corp. was the LIHTC syndicator.

"I have worked on numerous historic preservation projects, and converting the use of a building is extremely challenging," said Terry Gentry, vice president at The Richman Group. "This is the first time I have seen a historic bank building be converted to multifamily use. Due to the building's previous use, the project has a unique design and character, even though all the units will be brand new. The essence of the old bank was preserved, while all the comforts of modern living were added."

Those weren't the only challenges. On the day that the financing was scheduled to close, Grimshaw received a call from the city fire department, telling him that his building was on fire. The blaze, which was sparked by a cutting torch used in the demolition work, destroyed a good roof.

Insurance covered the damages, crews cleaned the debris, and Grimshaw kept going. Corridors in the 1920s building were lined with marble. The development team carefully removed the marble during the demolition process and then reintstalled them in the new corridors. The original skylight was also reconstructed.

A boost for downtown

The first residents moved into the building in January, and the project was fully occupied in 21 days. The development, which has one- and two-bedroom apartments, serves residents earning no more than 60 percent of the AMI, with 40 percent of the units targeted at those earning no more than 50 percent of the AMI. Monthly rents range from about $300 to $650, including utilities.

Commercial space in the building has been leased for use as a grocery store that will benefit the entire downtown.

"Wyoming National Apartments has become an outstanding example of the possibilities hidden within our urban core," said David Haney, executive director of WCDA. "The initial resistance facing this project has been overcome by exemplary execution and collaboration by many differing interests. This project has been instrumental in revitalizing the downtown area by providing housing choices mixed with retail activity."