REGIONAL REPORT: SOUTHEAST

Downtown Turnaround

BY LIZ ENOCHS

AFFORDABLE HOUSING FINANCE • FEBRUARY 2008

A decade ago, downtown Birmingham, Ala., was riddled with vacant buildings and struggling to retain its economic vitality. Most of the metro area’s growth in the decades after the Civil Rights era had occurred in the suburbs, sucking life and investment out of the city’s core, which saw its population shrink by about 100,000.

Over the past 10 years or so, though, efforts by developers, private businesses, and local governments have helped funnel hundreds of millions of dollars into Birmingham, especially the downtown area. The result: a renaissance.

The number of vacant buildings in the city center fell by two-thirds between 1995 and 2006, to 83 from 243, according to a report from Operation New Birmingham, an organization that promotes the 360-block downtown. About 1,350 apartments and condos had begun construction or committed to do so in the 2005-2006 period alone.

One part of downtown’s comeback has been a major redevelopment of a run-down public housing development. Park Place, Birmingham’s first HOPE VI development, got its new lease on life starting in 1999, when the Department of Housing and Urban Development awarded the city a $35 million grant under the program, the maximum available at that time.

The development, formerly known as Metropolitan Gardens, consisted of six blocks of dilapidated buildings invariably described as “crime-ridden” in the local press. “It was in desperate need of repair,” said Juandalynn Givan, the HOPE VI coordinator for the Housing Authority of the Birmingham District.“It had become a blighted community.”

Tough reputation

Now that two out of seven planned phases for the redevelopment are complete, the project has demonstrated that not only are locals willing to live downtown, they’re also willing to do so in a mixed-income community in a neighborhood with a tough reputation.

“Downtown has a history of not being terribly desirable, particularly in the region of Metropolitan Gardens,” said Leigh Ferguson, an executive vice president with local developer Sloss Real Estate, which is partnering with the Atlanta-based Integral Properties, LLC, on the redevelopment. “It was a pretty horrible place to live.”

That’s changed in the past few years. Ferguson himself, who moved to Birmingham in 2003, lives in an apartment downtown. “I can look out my window and see the project,” he said.

Although the first phase of the redevelopment, consisting of 197 rental units, leased up “fairly well,” according to Ferguson, the second phase ran into some trouble attracting occupants. It came online “virtually all at once” in December 2006, he said, compared to the building-by-building fashion of the first phase, which allowed the property managers to maintain a slow but steady leaseup effort.

The 198-unit second phase was composed of 85 public housing units, 35 units funded by low-income housing tax credits (LIHTCs), and 78 market-rate units. It attracted $7 million in equity investment from Boston Capital, $7.9 million in HOPE VI funds, and a $4.4 million loan from the Federal Housing Administration.

Bad timing

Phase two “came online in the midst of a soft leasing market,” Ferguson said. Sloss had several other loft properties downtown that were also having trouble finding occupants at the time, he noted. “Living in downtown Birmingham hadn’t really caught on as an exciting thing to do yet,” Ferguson said. “Plus, there was a little of, let’s call it socioeconomic anxiety, about people living in a—quote-unquote—mixed-income community. That was a bit of a challenge.”

As of June 2007, just 55 percent of the market-rate units and 17 percent of the LIHTC units in the development’s second phase were leased. Occupancy in the public housing units was 81 percent. “Candidly, I sat in the owner’s chair and yelled and screamed every Monday morning when I got my reports” on lease-up progress, Ferguson said.

Things started to turn around with an aggressive marketing campaign launched in mid-August. The effort included adding signage around the buildings to advertise the units for rent, running television and radio spots, and getting the word out by targeting local college students.

Park Place also established partnerships with groups such as the Carraway Community Development Corp. and the YMCA to help increase the property’s visibility. Property residents concerned about crime started working with local police to set up a community watch group, and some residents who were involved in a drug bust were evicted.

Big payoff

The efforts began to pay off within two months. In one two-week period in October, the property had 70 move-ins. By early November, all the units in the property’s second phase were rented, and there was a waiting list for the market- rate apartments on top of the 800-person-long waiting list for the public housing units.

“What we were able to do was deliver a high-quality luxury apartment community that actually responded to those who were looking for a more cosmopolitan living environment that just didn’t exist [in Birmingham],” said Rick White, a spokesman for Sloss’ Integral Properties.

All the apartments in the development were built using the same luxury standards, he said, so lower-income residents live in units just as high in quality as those occupied by market-rate residents.

“Everybody was striving to come up with a product that would really transform this part of Birmingham,” said Ferguson. In the end, city and developer efforts combined to create a massive project that won’t be completed for several years yet and is expected to cost more than $100 million.

Transforming lives

Givan of the housing authority raves about the redevelopment, calling it a catalyst for community and resident change. “HOPE VI is about transforming lives,” she said.

For Givan, that statement, which appears as the slogan in a 1999 HUD brochure on the HOPE VI program, has personal resonance. “I got a chance to go in the units of these residents. I got a chance to become very close with some of these residents,” she said. “I got a chance to argue with some, fuss and hug and make up with some. You become family with people.”

“Some of the younger people, in [the] five or six years [since the redevelopment got under way], have grown up. One girl just had a baby. She called me the other day. She finished college, she’s gotten two degrees,” Givan recounted with pride. She was slightly off on the details, but right about the direction of her young friend’s life.

That young woman, Velma Shufford, is 26. She’s three classes shy of earning her bachelor’s degree in criminal justice from Grantham University after earning an associate’s degree at a two-year college. She also works as a youth services aide at a juvenile detention facility.

She helps kids with their homework, finds them housing if they don’t have anywhere to go when they leave the facility, and intervenes on their behalf to help make sure they can stay in touch with their families.

“I make sure all the kids are accounted for, I’m a role model for the kids, I make sure their needs are met,” Shufford said in an interview. She’s aiming to get her master’s degree after she finishes at Grantham. “I like helping people and helping kids,” she said. When Shufford completes her education, she said, “I wouldn’t mind being a juvenile probation officer or a state probation officer or even a federal probation officer or even a caseworker—just something helping people.”

As Givan might say, that’s what HOPE VI is all about.