SILVER SPRING, MD. - Here’s one benefit of historic restoration work: Interesting people sometimes come to your groundbreaking. In autumn 2005, the Alexander Co., a development company based in Madison, Wis., gathered its partners and community leaders for the start of construction at the National Park Seminary, which for the first half of the 1900s was one of the most elite all-girls finishing schools in the nation.

Ten graduates of the school came to the ceremony. “They were sitting out there in the front row in their mink hats and mink stoles,” remembered Natalie Bock, development project manager for Alexander Co.

After the speeches the ladies, now in their 80s or older, wandered the grounds. The wooded campus is sprinkled with cottages in a fantastic range of architectural styles ranging from a Dutch windmill to a Japanese pagoda. The structures soon will be rehabbed to become single-family homes, while the main building of the old school, with its turrets and chapel and ballroom, will be turned into a mix of more than a hundred affordable and luxury rental apartments and condominiums, in addition to a transitional housing project for recently homeless men. The work is expected to be finished by the spring of 2008.

Several elderly soldiers also came to the groundbreaking. They had lived at the National Park Seminary after the U.S. Army took over the campus in the 1940s and turned it into a place for veterans of World War II, Korea, and Vietnam to recover. One Air Force vet now is considering buying one of the cottages.

In later years the Army neglected the campus. Water damage and fire ravaged the buildings. Local advocates including a group called Save Our Seminary pressured the Army to give the site to Montgomery County, which it finally did in 2001.

When Bock first visited the property in May 2003, one of the buildings, the Odeon Theatre, had recently burned. The Restoration House and the Poultry Man’s House had both been destroyed by termites, while the floors in part of the main building had collapsed.

“The wood floor warped down into the hole, and you looked down four floors,” Bock said. But while the Army’s neglect hurt the old buildings, its lack of attention also prevented the campus from being torn down to build single-family homes or strip retail, as suburban sprawl erupted around the site. For decades, the National Park Seminary became a kind of 32-acre time capsule, giving developers a unique historical canvas to work on.

“It’s really a once-in-a-lifetime chance,” Bock said.

Not all developers saw it that way. When Montgomery County issued a request for proposals for the campus, several developers proposed clearing the site.

A new vision

Alexander Co. was chosen to redevelop the seminary mainly because it proposed to preserve almost all of the historic buildings. The company also won points with the county by proposing to restore the seminary’s grand ballroom, where future residents will be able to attend dance classes and community events.

Alexander Co. will find room in the main building for a mix of affordable rental housing and condominiums, and for the latest incarnation of Carroll House, a transitional housing shelter with 32 beds run by Catholic Charities.

In addition to the challenges Alexander Co. set for itself, the campus seemed to offer endless surprises, like the toxic chemicals found in the soil behind one of the cottages. Alexander Co. must also care for the deep ravine that runs through the campus. The young ladies at the finishing school used to ride over the gorge on horseback, using a wide stone bridge that has long since collapsed.

Now the streambed must be cleared and the 13-acre ravine made open to the public. The campus will also need new streets and sidewalks, ringing up a bill for infrastructure that totals $15 million. All of this expensive work must be supported by the housing on the site. The cost to redevelop the seminary will reach $110 million, including the infrastructure costs. Redeveloping the mix of 66 affordable and market-rate apartments in the main building will cost about $25.3 million, or a stunning $383,333 per unit. The condos and single-family homes will cost another $46.2 million, while the townhome development cost will be $40 million.

Historic preservation programs will pay nearly a quarter of the cost for the apartments. These rental units received $4 million from the sale of federal historic rehabilitation tax credits and another $2.6 million from the sale of Heritage Preservation Tax Credits, administered by Maryland’s Historical Trust.

Montgomery County helped by giving the property to Alexander Co., and later providing a $1.3 million second mortgage to develop the apartments.

The apartments also received $8.9 million in equity from the sale of federal low-income housing tax credits. Because of this subsidy, 56 of the 66 apartments will rent to families earning no more than 60 percent of the area median income (AMI), with some units reserved for poorer families earning no more than 50 percent of AMI.

The rental apartments also will receive $4 million from the sale of 90 new luxury townhouses that EYA, a joint-venture partner based in Bethesda, Md., plans to build along Linden Lane, which cuts through the campus. Prices will start at $648,000 for a home with 2,125 square feet and rise to nearly $1 million.

Wachovia Multifamily Capital, Inc., provided the remaining $4 million to build the apartments through a permanent mortgage.

Alexander Co. also is considering building a second phase of construction in the woods on the north side of the property, across the ravine and just south of the Washington, D.C., beltway. The work would include 15 condominiums in a refurbished villa, eight new townhomes, and a large single-family home set in a castle.