Placemaking thru Rehabilitation A DEVELOPER S PERSPECTIVE Gary Scheuren, Scheuren & Associates October 9, 2014
Today s Topics: Drivers to Redevelopment Success Critical Downtown Building Passionate Developer Engaged Local Municipality Public Policy Priorities Complex Financial Structuring Market Demand or Market Maker Case Studies: Kerr Block Redevelopment Fremont s Gateway Senior Apartments
Kerr Block Redevelopment Coldwater, MI Long vacant and underutilized DDA Ownership 16 years in the making 14 mixed-income Apartments 2 Restaurants + Commercial Lease Space Completion: Winter 2015 $5.8 Million Total Development
Fremont Gateway Senior Apartments High School Adaptive Reuse Vacated downtown High School Redevelopment of historic portion 38 mixed-income senior apartments Community Center for remainder of complex 2 ½ years from RFP to Construction Start Completion Spring 2015 $12 Million Total Development
Critical Downtown Building Kerr Block, Coldwater Corner location in heart of downtown Nearly an entire city block Immediately adjacent to rehabilitated Tibbits Opera House Real potential for catalytic impact Existing parking adjacent & across street
Critical Downtown Building Fremont Gateway Gateway to adjacent to downtown Across street from Library & City Hall Walkscore 92 Existing on site parking Partnership with Recreation Authority Demolition would create large void
Passionate Developer Kerr Block, Coldwater First time Developer Native of Coldwater Has a Vision Passionate about Coldwater Revitalization & creating a Legacy. Financial return is secondary priority. Willingness to start project before loan closing
Passionate Developer Fremont Gateway Home Renewal Systems, LLC Very experienced housing developer Passionate about Placemaking and Revitalization projects Understands importance of good local relationships Knows that financial return has limits
Engaged Local Municipality Kerr Block, Coldwater Patient! Kerr Block is a priority Building held while developer worked through multiple lenders and tenants MSHDA Rental Rehab application MEDC - CDBG Grant application DDA grant OPRA designation and application
Engaged Local Municipality Fremont Gateway Redevelopment was priority for School District and City Very patient while awaiting LIHTC applications & 2 investors Swift Zoning and Site Plan processes Active in promoting project Proactive and solution-seeking Created Recreation Authority for Community Center
Public Policy Priorities Kerr Block, Coldwater Historic Preservation Blight Elimination Affordable Housing Brownfield Redevelopment
Public Policy Priorities Fremont Gateway Historic Preservation Affordable Senior Housing Brownfield Redevelopment
Complex Financing Kerr Block, Coldwater Sources of Financing $875K - Developer Cash Contribution $125K - DDA Grant $840K - Federal Historic Tax Credits $1.5M - State Historic/Brownfield Credits $525K - Commercial Bank Loan $403K - MEDC Blight Elimination Grant (CDBG) $300K - CDBG Revolving Loan (MEDC) $409K - MSHDA Rental Rehab Grant $725K - Deferred Developer Fee Challenges Attracting Lenders / Investors (2 sets) Competing interests of financing sources Investor Patience Blending Program Requirements High legal/accounting costs
Complex Financing Fremont Gateway Sources of Financing Developer Cash Contribution Federal Low Income Tax Credits (LIHTC) Newaygo Co. Brownfield Grant Housing and Community Development Fund Grant (MSHDA) Reduced and Deferred Developer Fees Challenges Master Tenant Organizational Structure (doubles transaction complexity) 2 Rounds thru LIHTC application process 2 sets of Investors/Lenders Closing the final gap Urgency to meet LIHTC Deadlines
Market Demand or Market Maker? Kerr Block, Coldwater No formal Market Study Confidence of Lender/Investor Restaurant Relocation Start-up business Best housing option in Downtown
Market Demand or Market Maker? Fremont Gateway New Product for Fremont Market Focus Group effort confirmed product design Market Study 18 month lease-up 38 units 100 applicants (6 months before completion!)
Thank You! Questions? Contact Information: Gary Scheuren Scheuren & Associates 517-582-5192 gary.scheuren@gmail.com