Living on Main Street - National Trust for Historic Preservation

Living on Main Street:
New Strategies from
Connecticut & Iowa
National Main Streets Conference
March 31, 2015
Reminders
Presenters
 Moderator - John Simone, President & CEO
 CT Main Street Center
 Diane Smith, Program
Development Officer
Presenters
 CT Housing Finance Authority
 Susan Westa, Community Engagement Director
 CT Main Street Center
 Michael Wagler, State Coordinator
 Main Street Iowa
Learning Objectives
 Learn about regulatory tools and creative incentives
that can encourage downtown redevelopment
 Understand the impediments small property owners
face & the technical assistance they need to take the
next steps toward redevelopment
 Learn about innovative financing tools to close the
“gap”
 See how Main Street organizations can play a role &
why it takes a “village” to redevelop a downtown
How it all began in CT
Market Opportunity
 CHFA’s lending products
• Residential mortgages to 1st time homebuyers
• Construction & permanent financing to
affordable multifamily rental
• Low-Income Housing Tax Credits
 Identified need
• Rental opportunities at community scale
• Technical assistance
• Financing options
Market Opportunity
 Over 116,000 units of housing are in structures
with 5 – 19 units with or without commercial
space
 Existing Buildings
• Blighted, underutilized or vacant
• Historic in nature
• Privately owned
• Urban, suburban and downtown
neighborhoods
PERCENT OF HOUSING UNITS THAT ARE
IN 5 – 19 UNIT STRUCTURES
Partnerships: Suburban
& Rural Communities
 Administered on behalf of CHFA by the
Local Initiatives Support Corp. &
Connecticut Housing Coalition
 Supports affordable housing development in
Connecticut’s Suburban & Rural
Communities by Providing
• Outreach
• Technical assistance
- Organizational Development
- Planning & Policy Assistance
- Project Technical Assistance
• Education & Training
• To support affordable housing development in
Connecticut’s suburban & rural communities
RESULTS
• Creation of 261 new
affordable units
• An additional 502
units in planning or
development stages
• Directly leveraged
over $43 million in
total development
Partnerships: Suburban
& Rural Communities
Northfield Firehouse 2 units – Litchfield, CT
Stuart Farms 5 units – Kent, CT
Ferry Crossing 16 units – Old Saybrook, CT
Mixed Use &
Mixed Income Opportunities
 Naturally affordable markets
• Low-income geographies
• Historic central business districts and downtowns
• Aging neighborhoods
 Public/Private planning and investment
• Privately owned properties
• Municipal economic interests
• Public/Private financing partnerships
 Public policy goals
• Transit Oriented Development
• Expansion of Housing Affordability
Partnerships:
Downtown Neighborhoods
Sources of Funds
Equity
State Historic Tax Credits
$207,700
Financing (Debt)
First Mortgage Loan
Seller Financing
Additional Funds Needed
$400,000
$292,500
$396,600
Total Sources
Development Costs
Construction Hard Costs
Site Acquisition
Architectural/Engineering
Financing & Interim Costs
Fees & Expenses
Total Costs
$1,296,800
$830,900
$325,000
$54,000
$29,900
$57,000
$1,296,800
Partnership for Success
Connecticut Main Street Center
&
Connecticut Housing Finance Authority
The Problem
Connecticut’s downtown properties
are needlessly under-utilized and under-valued.
Comparison
Asheville Big Box vs. Downtown Mixed-Use Development
The Opportunity
N.Y. Times, 10/20/14
Where Young College Graduates Are Choosing to Live
“…The number college-educated people age 25-34
living within city centers has surged…even places like
Buffalo & Cleveland.
…. (these) cities have a chance to be the economic
powerhouses of the future.”
The Challenge
Mixed-use/mixed-income
development
has become very complex
Mixed-Use Real Estate Planning
A Pilot Program
Consultant Team
Crosskey Architects
Local Initiatives Support Corp.
CIL
Pilot Communities





Torrington
Waterbury
Middletown
Meriden
New Britain
Community Engagement
Community Liaisons
Advisory Team
Community Meetings
What’s right for your town?
Program
 Downtown Development Audit
 Recommendations for regulatory changes,
parking requirements, marketing and
financial incentives
Program
 Model Building Analysis
 Redevelopment Plans
Program
 Assistance to Property Owners
Program
 Downtown Management Assistance
Lessons Learned
 Small, mixed-use developments are some of the
hardest real estate deals to accomplish because:
 Older building gut rehabilitation (most costly)
 In complex downtown settings
 It requires well-integrated public-private
partnerships
 Market and affordable rental rates are often the
same, making market rate apartment financing
difficult
Lessons Learned
 Many state and federal resources are only available
to projects larger than a typical downtown
building
 Community meetings supported the assumption
that there is a growing interest in living downtown
 Education & technical assistance programs are
needed to prepare property owners for
redevelopment & property management
Addressing the “Gap”
 Federal & State historic tax credits
• May work but many downtown projects are too small
 Tax Increment Financing (TIF)
• Recently introduced legislation to expand CT program
 Commercial Property Assessed Clean Energy (C-PACE)
• Financing for energy upgrades
 Tax abatement
• Potential to expand local programs
 Incentives for city workers to live downtown
• Live Where You Work





Overall Findings
Land use regulations promote redevelopment
Parking is always an issue
Downtown property owners are not developers or
even landlords
The financial gap for redevelopment is significant
A mechanism is not available to address the gap
Middletown
Model Building
 Owner: The Amato Family
• Across the street from the
owners’ long-established shop,
Amato’s Toy and Hobby
 Redevelopment Plan: 6 units
• 4 large loft-style apartments &
2 smaller apartments in back
 Too small to take advantage
of historic tax credits & other
housing programs
Lessons Learned
Torrington
Model Building
Owner: Torrington Downtown Partners
Location: 11-21 Main Street
Redevelopment Plan: 16 units from 8 units
Assistance to Property Owners
 Torrington Downtown Partners



A unique partnership of local businessmen - with
construction experience but not developers
Purchased 9 downtown buildings
Invited residents and stakeholders to participate
Years 2 & 3
 New Britain getting ready to move forward
 Property owner is a developer
 Looking for assistance with Historic Tax Credits
 High hopes for Meriden & Norwich
 Meriden owner is a contractor & time is right
 Norwich owned by City & NCDC
 New Model
 Must happen soon or will loose building
The Challenge
It takes a “village” to successfully redevelop
under-utilized downtown properties
It’s a risk with great rewards for the entire
community and therefore worth the community’s
investment of time and resources
Living on Main Street: Iowa
Foundation for Support
 Upper Floor: Creative Solutions and
Lessons Learned
 Getting Results: The Economic
Impact of Main Street Iowa
 Iowa Upper Story Housing
Feasibility Study
 Facilitated Market Analysis
 Property Tax Analysis Tool
Case Studies to Tell Stories
Upper Floor: Creative Solutions and Lessons Learned
In-depth Look at Main Street
Getting Results: The Economic Impact of Main Street Iowa
Local Impacts
Using the information to spur local development and support
State Impacts
Continued funding for Challenge Grant program
7 Federal Appropriations:
$4M bricks and mortar
83 project awards
$36M leveraged
2 State Appropriations:
$2M bricks and mortar
27 project awards
$5.5M leveraged
1/3 of awards for upper floor projects creating or updating nearly 200 units.
State Impacts
Shifting priorities of recovery funding
By the #s…
2009
$61M
$100M
800
70%
State Leadership Takes Notice
Iowa Upper Story Housing Feasibility Study
Local Information Drives Priorities
Locally Facilitated Market Analysis
Consumer Surveys Upstairs
Downtown Summary:
12.3% Yes
22.3% Maybe
New Customized Perspective
Property Tax Analysis Tool
*Value per acre
Woodbine Mt. Pleasant Cedar Falls
Population
1,459
Big Box Retailer $302,450
Downtown - Unoccupied $157,147
Downtown - Occupied $2,533,104
8,688
39,260
$509,997
$776,655
$1,856,557
$650,394
$3,167,850
$4,888,620
Other Incentives
State & Federal Historic Tax Credits
Main Street Iowa Loan Program
Local Bank Partner Loan Pools
Locally Developed Tools:
TIF, Tax Abatement, Incentives
Project Case Study:
Jo-Lynn Shoe Shoppe, Fort Madison, IA (11,051)
Project Case Study:
Brimhall Building, State Center, IA (1,468)
Project Case Study:
I.O.O.F. Building, Woodbine, IA (1,459)
Lessons Learned
Creativity / No Project is the Same:
Funding, Design, Challenges, Resources
Lessons Learned
Partnerships
Funding, Design, Challenges, Resources
Lessons Learned
Urban Pioneers/Leaders/Mentors
In community, Regionally, Not just at the beginning
Lessons Learned
Promotion and Marketing of Projects
Role/partnership opportunity for local Main Street program
Lessons Learned
Creditability of Local Main Street program
assists success of sustainable upper floor development
Contact Information
John Simone
[email protected]
Susan Westa
[email protected]
Diane Smith
Michael Wagler
[email protected] [email protected]
Thank you!
Please complete the session evaluation on the conference app
before you leave the room.