BALTIMORE Young teachers coming to work in the public school system here have found a home at Miller's Court, a new mixed-use development built with them in mind.
The innovative project features 40 apartments plus office space for nonprofit organizations serving the Baltimore City Public Schools.
Each year, the school system hires a significant number of teachers from around the country. “Many of them accept this challenge and come in without having any knowledge of Baltimore, where to live and where to go,” says developer Donald Manekin, who has a special connection with the local schools.
Manekin has spent most of his career working in real estate, but he stepped in to serve as COO of the school district in 2000. He held the post for two years and grew to appreciate the hundreds of young educators who move to Baltimore each year. He also recognized the need for them to have a collaborative environment, especially in the tough early years.
Manekin and his son, Thibault, turned the idea into a reality at Miller's Court. Their firm, Seawall Development Co., financed much of the $21 million project with New Markets Tax Credits (NMTCs) and historic preservation tax credits. Without the tax credits, the project likely would never have been built.
Inside the building
Built in 1874, the building was home to H.F. Miller and Sons, a tin box factory, before being used by various other tenants. It then sat empty since the early 1990s, becoming an eyesore.
Despite its rough condition, the developers saw potential in the nearly 80,000-square-foot building.
When designing the project, Tom Liebel, associate principal at Marks, Thomas Architects, worked with several teachers to better understand their needs. It soon became known that they were making late-night runs to Kinko's to copy their lesson plans for the next day.
That led to the development team to dedicate and outfit a space as a copy room, a “mini-Kinko's” for the building. Liebel also added numerous green features that are expected to reduce the building's energy usage by about 30 percent.
Manekin says the apartments are offered to anyone, but the marketing was aimed at teachers to bring them into the project.
The educators get the benefit of discounted rents. For example, a one-bedroom unit is regularly about $1,000 to $1,200, but teachers get a $300 discount and pay $700 to $900 in rent.
Completing Miller's Court is approximately 30,000 square feet of commercial space. Teach for America, which recruits college graduates to teach in public schools, and other nonprofits that underpin the success of the school district will lease the office space.
“Living at Miller's Court is a great way to foster camaraderie among our teachers,” says Omari Todd, executive director of Teach For America-Baltimore. “It's also helped to make Baltimore feel like home.”
Catholic Charities, Experience Corps, and Baltimore Urban Debate League are among the other groups sharing the building and achieving an economy of scale, says Manekin. About 75 percent of the space was pre-leased at opening.
Multiple pieces of financing were needed for the project, including NMTC equity from two separate sources.
SunTrust Banks, Inc., through subsidiary SunTrust Community Development Enterprises, LLC, provided $9.5 million through NMTCs. SunTrust also provided a $5.8 million leverage loan.
A separate $9.4 million NMTC allocation was made by Enterprise Community Investment, Inc., with U.S. Bancorp Community Development Corp. as its NMTC and historic tax credit investor.
NMTCs can be used to provide either loans or equity investments to a project. In this case, the deal was structured to provide equity to Miller's Court.
It was a unique financing structure with two community development entities, both limited partners in the deal, says Christopher Sears, vice president at SunTrust Community Capital. This allowed for a larger equity piece than typically can be provided by a single NMTC provider and helped the development team make the project work.
The tax credits provided the means to rehabilitate an empty building in an area that needed a shot in the arm, says Joseph Wesolowski, senior vice president at Enterprise. He oversees the firm's structured finance operations, including leveraging NMTCs to provide real estate capital for commercial and mixed-used developments in underserved markets.
Created in 2000, the federal program aims to spur private investment in low-income and underserved neighborhoods. Miller's Court is a prime example of a mixed-use development. A common question is whether the program can be used for rental housing. It can as long as the project meets the 80/20 test, says Wesolowski, explaining that at least 20 percent of the project's revenue has to come from non-residential activity.
The building's long history also qualified the project for historic tax credits, and additional financing was provided by the state of Maryland and the city of Baltimore.
Officials hope that Miller's Court will be a model for similar projects across the nation.