How to Renovate & Repurpose Historic Buildings

Transcription

1 How to Renovate & Repurpose Historic Buildings Dominium Development & Acquisition Eric Omdahl February 21, 2019

2 NAHB Disclosure The material in this education session has not been reviewed, approved, or endorsed by the National Association of Home Builders (NAHB). The topics discussed and the materials provided herein are for informational purposes only, are not intended to be an exhaustive presentation of information on a particular subject, and should not be treated as such. The speaker or speakers are not acting on behalf of or at the direction of NAHB. NAHB specifically disclaims any liability, loss or risk, personal or otherwise, which may be incurred as a consequence, directly or indirectly, in the use or application of any of the materials presented in this or any other education session presented as part of the International Builders Show.

3 What Will Be Covered Why Preserve Historic Buildings? Federal & State Historic Tax Credits Finding an Eligible Project Dominium Projects Case Study: Millworks Lofts Challenges of Historic Preservation Q&A

4 Why Preserve Historic Buildings? Efficient Use of Resources Promotes Imaginative/Creative Uses Attract Investment to Neighborhood Environmental Clean Up Tax Credits/Financing Available

5 Tax Incentives for Historic Preservation Federal Historic Preservation Tax Credit 20% of Qualified Rehabilitation Expenses (QRE) No Cap on Credit Amount State Historic Preservation Tax Credit 36 States Have a Historic Tax Credit Range from 10%-25% of QREs Usually cap credit amount

6 State Historic Preservation Tax Credit Map Source: Novogradac & Company

7 Eligibility Requirements for Historic Tax Credits 1. At least 50 years old 2. Listed in National Register of Historic Places 3. The project meets substantial rehabilitation test 4. Rehabilitation work meets SHPO and NPS standards 5. Historic building must be used for incomeproducing use

8 Dominium Historic Projects - Missouri The Metropolitan Artist Lofts 72 Affordable Apartment Units St. Louis, MO The Arcade 282 Apartment Units (202 Affordable) St. Louis, MO

9 Dominium Historic Projects - Minnesota 251 Affordable Apartment Units Schmidt Artist Lofts 260 Affordable Apartment Units St. Paul, MN

10 Case Study Millworks Lofts Lake Street Sash & Door Company Built in 1926 Minneapolis, Minnesota Converted to 78 affordable apartment units

11 Case Study Millworks Lofts Millworks Lofts 78 Affordable Apartment Units Millworks Lofts 78 Affordable Apartment Units

12 Case Study Millworks Lofts

13 Case Study Millworks Lofts

14 Case Study Millworks Lofts

15 Project Financing Millworks Lofts Environmental Grants 1% Borrower Cash (DDF) 8% State Historic Tax Credit Equity 15% Federal Historic Tax Credit Equity 21% First Mortgage 24% Low Income Housing Tax Credit Equity 31% First Mortgage $ 8,350,000 Low Income Housing Tax Credit Equity 10,750,000 Federal Historic Tax Credit Equity 7,300,000 State Historic Tax Credit Equity 5,220,000 Environmental Grants 420,000 Borrower Cash (DDF) 2,560,000 TOTAL DEVELOPMENT COST $ 34,600,000

16 Project Challenges Millworks Lofts Navigating Historic Approval Process Architectural Plans National Register/Tax Credits Replacing Historically Significant Building Elements Managing Cost Environmental Issues Creating Living Spaces in a Structure not Designed for Housing

17 Who is Involved? Developer Architects Contractors Banks Investors Lawyers Government Agencies Historic Consultants Environmentalists Engineers Title Companies

18 Before & After Schmidt Artist Lofts St. Paul, MN Schmidt Artist Lofts St. Paul, MN

19 Before & After Schmidt Artist Lofts St. Paul, MN Schmidt Artist Lofts St. Paul, MN

20 Before & After Schmidt Artist Lofts St. Paul, MN Schmidt Artist Lofts St. Paul, MN

21 Before & After Schmidt Artist Lofts St. Paul, MN Schmidt Artist Lofts St. Paul, MN

22 Before & After

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33 Before & After The Arcade St. Louis, MO The Arcade St. Louis, MO

34 Before & After The Arcade St. Louis, MO The Arcade St. Louis, MO

35 Before & After The Arcade St. Louis, MO The Arcade St. Louis, MO

36 Speaker Contact Information Eric Omdahl Development Associate Dominium Development & Acquisition 2905 Northwest Blvd Suite 150 Plymouth, MN