COURTHOUSE LOFTS
Developer: The Alexander Co., Inc. Architect: The Alexander Co., Inc.
Major Funders: U.S. Bancorp Community Development Corp.; Morgan Keegan; Missouri Housing Development Commission; Department of Housing and Urban Development
KANSAS CITY, MO.—The former Federal Courthouse in Kansas City had been home to Harry S.Truman's senatorial offices and had been the setting for several landmark Thurgood Marshall civil rights cases. It was used through 1998, when the new courthouse was built downtown. Now, it has been transformed into Courthouse Lofts, which will provide 176 units for residents earning no more than 60 percent of the area median income.
“It's ironic that it was built during the Great Depression and that the redevelopment of the building was happening in the Great Recession," says Matt Meier, vice president of real estate development for The Alexander Co.
This historic rehab wasn't an easy task for the developer. The development team spent two years setting up the deal initially, and the lead investor pulled out the day before all the paperwork was to be signed at the front end of the financial meltdown. And then the team had to start over.
U.S. Bancorp Community Development Corp. stepped in as lead investor, and the Missouri Housing Development Commission and the Department of Housing and Urban Development agreed to a risk-share deal whereby they stood behind the bonds, which were underwritten by Morgan Keegan.
“To get a $40 million low-income housing tax credit and bond deal done was quite a feat. It took us a year to restructure the transaction and apply for Tax Credit Assistance Program and credit exchange dollars, which helped bridge the financial gap resulting from the drop in tax credit pricing and the more conservative lending environment we found ourselves in,” Meier says.
The deal closed in the nick of time, on Dec. 31, 2009. And residents just started to move in at the beginning of June.
As part of the rehab, the courthouse's neoclassical design and art deco architectural elements have been revitalized, with the developer preserving historic doors, stone trim, and terrazzo floors. Two of the old judges' chambers as well as Truman's office have been converted into living rooms, and a bathroom has been built into an original safe in one unit. —Christine Serlin
HISTORIC LOFTS OF WACO HIGH
Developers: The Landmark Group, Sari & Co., and Fitch Development Group Architect: Martin Riley Associates Architects, P.C.
Major Funders: Bank of America Merrill Lynch; City of Waco; Texas Department of Housing and Community Affairs
WACO, TEXAS—Waco High School saw its last class of graduating seniors in 1971. Over the years, it has had various uses. But in January 2010, which marked the 100th anniversary of the original building construction, it reopened as the Historic Lofts of Waco High.
Developed by The Landmark Group, Sari & Co., and Fitch Development Group, the project is comprised of 104 units, with 11 percent of the units set aside for residents earning 30 percent of the area median income (AMI) and 89 percent of the units at 60 percent of the AMI. Many are working families as well as empty nesters and young people who want to live in the urban core.
The historic rehab preserved many elements of the former high school, including building a multi-story structure within the gymnasium to house one- and two-story apartments while maintaining the look and feel of the former use of the space. Original trophy cases, chalkboards, lockers, and a mural also bring the past into the present at the development.
“In this particular project, it was about maintaining and reusing what was there and not letting it go to waste,” says Tracey Levine, development manager at The Landmark Group.
Alumni classes come to tour the property, and several class reunions have been held on-site since the project's opening. Two of the residents are even high school sweethearts who graduated from Waco High in 1965, according to Blair Maas, director of property management at the development.
The $15 million development had strong support from the city of Waco, which provided $500,000 in tax increment financing. It also received low-income housing tax credits and historic tax credits, with equity provided by Bank of America Merrill Lynch. Bank of America also provided the permanent financing. —Christine Serlin
THE MINNESOTA BUILDING
Developers: Sand Cos., Inc., and MNB Development, LLC Architect: Sand Cos., Inc.
Major Funders: U.S. Bank; WNC & Associates, Inc.; City of St. Paul; Minnesota Housing Finance Agency
ST. PAUL, MINN.—To turn downtown Class C office space into affordable housing took a lot of creativity and perseverance on the part of developers Sand Cos., Inc., and MNB Development, LLC. In the developers' final designs for The Minnesota Building, a 13-story art deco building constructed in 1929, they had planned for 137 units. But the low-income housing tax credits (LIHTCs) the city of St. Paul had to allocate in 2007 would only finance 77 units. This led the development team to set up three separate condo units within the building, which would give them the number of units they wanted and allow them to be constructed within one phase. The condo units consisted of Minnesota Place, the 77-unit 9 percent LIHTC project; Minnesota Vistas, the 60-unit 4 percent LIHTC project; and Minnesota Park, the 10,000-square-foot commercial component.
The housing projects were awarded funding in 2007, but the tax credit market's deterioration left a widening gap. Minnesota Place received additional LIHTCs through the Housing and Economic Recovery Act of 2008, but the financing problems still loomed with the weak bond market for Minnesota Vistas. With the passage of the American Recovery and Reinvestment Act, the development received Tax Credit Assistance Program and credit exchange funds.
“The stimulus funds were absolutely key to the project,” says Jamie Thelen, CEO of Sand Cos. “If we wouldn't have had those, [the development's completion] would have been a couple of years down the road."
WNC & Associates, Inc., was the syndicator for the LIHTCs and historic tax credits, and U.S. Bank provided the tax-exempt bond financing.
Most of the units at the $28 million development, which was completed in December 2010, are designated as workforce housing, serving residents earning 50 percent and 60 percent of the area median income (AMI), with 10 units set aside for the formerly homeless and four units at 30 percent of the AMI. —Christine Serlin
RIVERSIDE PLAZA
Developer: Sherman Associates Development, LLC Architect: Blumentals/Architecture, Inc.
Major Funders: AEGON USA Realty Advisors; Google; Oak Grove Capital; AFL-CIO Investment Trust; City of Minneapolis; Greater Metro Housing Corp.; Minnesota Housing Finance Agency; Department of Housing and Urban Development
MINNEAPOLIS—Sherman Associates Development, LLC, has embarked on a massive undertaking: the preservation and rehab of the 1,303- unit, nine-building Riverside Plaza. But before the rehab could start earlier this year, it would take seven years to get all of the pieces in place.
Originally known as Cedar Square West, the project had been developed between 1971 and 1973 as the first and only phase of the Department of Housing and Urban Development's (HUD's) New Town-In Town initiative and designed by architect Ralph Rapson. The property went into foreclosure, and Sherman Associates acquired it with low-income housing tax credits in 1988 and did a renovation at that time. When the credits expired in 2004, the developer chose to keep the project affordable and planned for much-needed renovations later in the decade.
Conversations were started, and pieces of the financing started to come together.
But to get to the finish line, the developer needed the National Park Service to approve the request to waive the 50-year compliance period making the project eligible to be listed on the National Register of Historic Places in order to qualify for both federal and state historic tax credits, providing nearly $29 million in equity. That finally happened in December 2010, and the deal closed with 14 different funding sources, including eight local and state resources, in place.
One of the main goals of the $132 million renovation is to upgrade the mechanical and electrical systems to make the buildings more energy efficient.
“We want to provide improvements that will provide a better life for the residents, not just today, but for the next 40 years,” says Chris Sherman, project manager.
The development, which has been home to immigrant populations since the 1975 Vietnam War evacuation, now mainly serves East African refugees.
Renovations will be completed on four of the nine buildings, including the two largest, in 2011, with the remaining buildings finished in 2012. —Christine Serlin
