Affordable Housing Finance

THE BUZZ:

POP QUIZ

AFFORDABLE HOUSING FINANCE • March 2009

MEET GARY GORMAN, president and CEO of Gorman & Co., Inc., a Wisconsin-based firm specializing in urban renewal projects.

After beginning his career as a lawyer, Gorman formed his own firm in 1984 to develop multifamily real estate projects. A few years later when the low-income housing tax credit (LIHTC) was created, he decided to specialize in affordable housing, using the new tax credit.

Gorman & Co. is now one of the largest affordable housing developers in the country. It is also a leader in historic renovation, with deals in Wisconsin and Illinois.

One of its recent projects is the adaptive reuse of the historic Gund Brewery in La Crosse, Wis. Gorman used LIHTCs and historic tax credits to turn the building into rental lofts. The development is adjacent to Gundersen Lutheran Medical Center and provides valuable workforce housing to center employees and others in the community.

Gorman & Co. was named developer of the year by Wisconsin Builder and The Daily Reporter in 2006.

Q: How did you get into the affordable housing business?

A: I was an attorney representing developers and syndicators. I left when I was 28 years old to form a firm to acquire income properties. Our firm had done two historic rehabilitation projects in 1985 and 1986. When the Tax Reform Act of 1986 was passed, I thought that learning to work with the new Sec. 42 affordable housing tax credit was an opportunity.

Q: What was your big break?

A: Doing our first deal with an institutional investor in 1988.

Q: How are your affordable housing developments changing?

A:They tend to be in urban areas because that is where communities want development. We also are doing more mixeduse projects in terms of including marketrate units, commercial space, and “for-sale” units.

Q: What will be the biggest challenge for your company this year, and how will you meet that challenge?

A: Clearly, the biggest challenge is the contraction of the supply of equity capital to the affordable housing tax credit marketplace. We are communicating more closely with the actual investors and making sure that capital is available before we pursue a project in great depth.

Q: What do you know now that you wish you had known at the beginning of your career?

A: Figure out a narrow niche in a business that you become very good at, then repeat it over and over.

Q: Besides the usual work papers and office supplies, what can be found in your office?

A: Our office is a rehabilitated high school, so we have a gym, a 1950s- style diner, and a bar—obviously not in the original high school.

Q: If you unexpectedly found yourself with the afternoon off, where would we find you?

A: Coaching my boys’ sports teams.

Q: Your work takes you into new neighborhoods and communities. When visiting an area, what do you like to do for work and fun?

A: For work, I meet with local officials and ask, “If a developer ever asked you, what would you like done in your community?” For fun, I sample whatever is the local brew.

Q: Any tips for balancing work and home life?

A: Put personal time on your calendar. Treat those appointments as seriously as a business appointment.

Q: What’s next for Gary Gorman and Gorman & Co., Inc.?

A: We have expanded into Arizona, Florida, and Illinois, in addition to our base in Wisconsin. I would like to grow into Colorado as well.