Yearly Archives: 2014

CHFA provides funds for Westwood project

By: Inside Real Estate News, October 2, 2014

Grove Street Apartments, a planned 42-affordable housing development in southwest Denver’s Westwood neighborhood, has been awarded almost $1 million in federal tax credits.

The Colorado Housing and Finance Authority $915,504 in Federal Low Income Housing Tax Credits for the development by Gorman & Co. on a 1.3-acre site at 3116 W. Alameda Ave.

The development is part of a comprehensive revitalization effort being implemented by city leaders in partnership with the Westwood community.

CHFA recently announced the final round of LIHTC allocation awards for 2014, which included Grove Street Apartments, a proposed mix-use development incorporating affordable housing and a nonprofit community services organization.

“By partnering with cities and Urban Renewal Authorities, CHFA can leverage our resources even further to help address the need for affordable housing, especially in communities like Westwood where revitalization has been prioritized,” said Cris White, CHFA executive director and CEO.

Westwood has been identified as a blighted Urban Renewal Area in need of reinvestment by the Denver Urban Renewal Authority.
In addition to the tax credits, the $14.3 million project will include a financial contribution from DURA.

“We are extremely pleased to partner with Gorman and Co. the Colorado Housing and Finance Authority, and the city and county of Denver by deploying DURA resources for the Grove Street Apartments,” said Tracy Huggins, DURA’s executive director.

“The redevelopment of this site, identified as a priority location for redevelopment in the 1990 Urban Renewal Plan, represents a significant milestone for the corridor,” Huggins continued.

DURA has had a long relationship with Westwood.

“For over 20 years, DURA has worked with individual residential and commercial property owners to reinvest in the Westwood area,” Huggins said.

CHFA’s allocation of federal LIHTC in round two will allow Grove Street Apartments to leverage $3.35 million in DURA funds that otherwise would not be available to support redevelopment in the area.

These resources are crucial, as 24 percent of Westwood’s families live below the poverty line and 95 percent of the children in Westwood are eligible for free or reduced-price lunch.

According to the U.S. Census, approximately 27 percent of all of Denver’s substandard housing units are in Westwood. Its rental housing stock also is old. Some 78 percent of renter-occupied housing in Westwood was built before 1980.

Additionally, Westwood’s affordable housing rentals are 99.8 percent occupied with very long wait lists, of up to 300 people.
“Grove Street Apartments is the kind of catalytic project we specialize in,” said Kimball Crangle, Colorado market president for Gorman & Co.

“We’ll provide high quality housing and services for working individuals and families who are low income earners, helping to strengthen the economic well-being of families and transforming the community over time,” Crangle added.

Crangle was previously a senior developer for Denver Housing Authority and led its flagship Mariposa redevelopment at West 10th Avenue and Osage Street.

The development of Grove Street Apartments coincides with coordinated efforts by City Councilman Paul López, Mayor Michael Hancock’s administration, and others to bring new investment into the Westwood neighborhood spanning housing, health care and food access needs.

“Mayor Hancock is focused on five critical strategies for Westwood revitalization through community investment—parks/open space, youth, fresh food, affordable housing, and commercial development,” said Paul Washington, executive director of the Denver Office of Economic Development.

“We are therefore so pleased to see Grove Street Apartments added to Denver’s spectrum of affordable and workforce housing, and particularly in Westwood, as one of the highest areas of concentrated poverty in the city,” Washington added.

“The Grove Street Apartments development is a catalyst project for Westwood,” said López, who represents the area.

“In addition to critically needed affordable housing, this mixed use development will bring job training opportunities to southwest Denver,” he said.

The construction of Grove Street Apartments is estimated to generate $15.85 million in economic impact and support 74 jobs. Ground breaking is expected in early fall of 2015 with an opening in fall of 2016.

Low Income Housing Tax Credits to Help Support New Affordable Housing in Westwood Neighborhood Revitalization

For Immediate Release
TUESDAY, SEPTEMBER 30, 2014

contact:
Jerilynn Martinez, 303.297.7427
jmartinez@chfainfo.com

Hilarie Portell, 720.810.3906
hilarie@portellworks.com

Low Income Housing Tax Credits to Help Support New Affordable Housing in Westwood Neighborhood Revitalization

(DENVER) – A new affordable housing development in south west Denver’s Westwood neighborhood was awarded $915,504 in Federal Low Income Housing Tax Credits (LIHTC) by Colorado Housing and Finance Authority (CHFA). The development, Grove Street Apartments, is part of a comprehensive revitalization effort being implemented by City leaders in partnership with the Westwood community. CHFA recently announced the final round of LIHTC allocation awards for 2014, which included Grove Street Apartments, a proposed mix-use development incorporating affordable housing and a nonprofit community services organization.

“By partnering with Cities and Urban Renewal Authorities, CHFA can leverage our resources even further to help address the need for affordable housing, especially in communities like Westwood where revitalization has been prioritized,” said Cris White, CHFA executive director and CEO.

Grove Street Apartments, at 3116 West Alameda Avenue, being developed by Gorman & Company, will be a 1.3-acre, mixed-use development that will bring 42 units of much-needed affordable housing and services to the Westwood neighborhood, an Urban Renewal Area identified by the Denver Urban Renewal Authority (DURA) as blighted and in need of reinvestment. In addition to the tax credits, the $14.3 million project will include a financial contribution from DURA.

“We are extremely pleased to partner with Gorman and Company, the Colorado Housing and Finance Authority, and the City and County of Denver by deploying DURA resources for the Grove Street Apartments. The redevelopment of this site, identified as a priority location for redevelopment in the 1990 Urban Renewal Plan, represents a significant milestone for the corridor. For over 20 years, DURA has worked with individual residential and commercial property owners to reinvest in the Westwood area,” said Tracy Huggins, DURA’s executive director.

CHFA’s allocation of federal LIHTC in Round Two will allow Grove Street Apartments to leverage $3.35 million in DURA funds that otherwise would not be available to support redevelopment in the area. These resources will be critical as 24 percent of Westwood’s families live below the poverty line, and 95 percent of the children in Westwood are eligible for free or reduced-price lunch. According to the U.S. Census, approximately 27 percent of all of Denver’s substandard housing units are located in Westwood, and 78 percent of renter-occupied housing was built before 1980. Additionally, Westwood’s affordable housing rentals are 99.8 percent occupied with very long wait lists (up to 300 people).

“Grove Street Apartments is the kind of catalytic project we specialize in,” said Kimball Crangle, Colorado market president for Gorman & Company. “We’ll provide high quality housing and services for working individuals and families who are low income earners, helping to strengthen the economic well-being of families and transforming the community over time.” Crangle was previously a senior developer for Denver Housing Authority and led their flagship Mariposa redevelopment at 10th Avenue and Osage Street.

The development of Grove Street Apartments coincides with coordinated efforts by City Councilmember Paul López, Mayor Michael Hancock’s administration, and others to bring new investment into the Westwood neighborhood spanning housing, health care, and food access needs.

“Mayor Hancock is focused on five critical strategies for Westwood revitalization through community investment—parks/open space, youth, fresh food, affordable housing, and commercial development,” said Paul Washington, executive director of the Denver Office of Economic Development. “We are therefore so pleased to see Grove Street Apartments added to Denver’s spectrum of affordable and workforce housing, and particularly in Westwood, as one of the highest areas of concentrated poverty in the city.”

“The Grove Street Apartments development is a catalyst project for Westwood,” said City Councilman Paul López, who represents the area. “In addition to critically needed affordable housing, this mixed use development will bring job training opportunities to southwest Denver.”

The construction of Grove Street Apartments is estimated to generate $15,852,402 in economic impact and support 74 jobs. Ground breaking is expected in early fall of 2015 with an opening in fall of 2016.

About Colorado Housing and Finance Authority (CHFA)
CHFA finances the places where people live and work. Created in 1973 by the Colorado State Legislature, CHFA strengthens communities by making loans to low- and moderate- income homebuyers, affordable multifamily rental housing developers, and small and medium sized businesses. CHFA also provides education and technical assistance about affordable housing and economic development. CHFA is a self-sustaining public enterprise. CHFA issued bonds are not obligations of the state. For more information about CHFA please visit www.chfainfo.com. Contact our Denver office at 1.800.877.chfa (2432), or our Western Slope office at 1.800.877.8450.

About Gorman & Company, Inc.
Gorman & Company, Inc. specializes in revitalizing communities through innovative housing partnerships. As a trusted partner and respected industry leader since 1984, they specialize in downtown revitalization, the preservation of affordable housing, workforce housing and the adaptive reuse of significant historic buildings. Gorman & Company has offices in Denver, Co; Milwaukee & Madison, WI; Chicago, IL; Phoenix, AZ; and Miami, FL. Learn more at www.GormanUSA.com.

###

Gorman & Company, Inc. Partners With Town Of Vail And Wright And Company To Build 112 Unit Deed-Restricted Employee Housing In Vail, Marking Vail’s Largest Employee Housing Project Ever

VAIL, Colo., Sept. 16, 2014 /PRNewswire

— Gorman & Company, Inc., an affordable housing development leader for over 35 years, has partnered with the Town of Vail and local developer Jen Wright and Wright and Company for the redevelopment and new-construction of Lion’s Ridge Apartment Homes on a 5.24-acre parcel on Vail’sNorth Frontage Road opposite Vail Mountain, which is the eastern half of the existing Timber Ridge employee housing complex. All costs of construction will be borne by the developer while the town will lease the underlying land to the developer with payments deferred up to 10 years. The town has invested $8Million in the parcel to insure the units remain deed restricted housing.

The groundbreaking, held Tuesday, September 16 at noon, was open to the community as a celebration of the Town’s housing milestone. Construction begins immediately.

“This is a phenomenal project for Gorman & Company, Inc. in that it involved complicities that the Town of Vail Councils and staff for many years, and the associated Town and community planners and financiers all solved. The result will be a beautiful housing project benefitting the community of Vail for the long-term,” said Gary Gorman, chief executive officer of Gorman and Company, Inc.

Lion’s Ridge Apartment Homes will be comprised of 112 deed-restricted units and a manager’s unit, will be constructed by Gorman General Contractors with construction management by the local firm of RA Nelson. The project, comprised of one and two bedroom units will include four, three-story tall buildings. The Town of Vail will continue to own and operate 95 rental units on the western side of the property.

“Lion’s Ridge Apartment Homes will be for the year-around employee in Vail who wants to live and work in Vail for the long-term,” said Jen Wright, principal of Wright and Company, the locally-based developer. “They will be ‘loft-like’ with galley kitchens, washer-dryers, storage and, generally-speaking, nice apartment homes which appeal to the Vail residents who are established here.”

Vail Mayor Andy Daly, echoed Wright and Gorman’s sentiments. “I couldn’t be more proud of this monumental accomplishment knowing that our investment on behalf of the Town of Vail taxpayers is fundamentally sound and will become part of this community’s legacy,” he said.

Key financing component approved for Heritage House project

By Bill Guida, Kenosha News, September 15, 2014

It’s by no means a done deal, but an offiicial with Gorman & Co. was confident Monday the historic former Elks Club/Heritage House is on track to become a boutique hotel

Ted Matkom, Gorman’s president for Wisconsin development, said First Ring Industrial Redevelopment Enterprise Inc. has agreed to sell $10 million in federal “new market” tax credits to help support the proposed project, potentially providing Gorman with $2.7 million equity in the project.

The public-private organization run by the city of West Allis, is allocated some $150 million in federal new market tax credits to boost redevelopment projects meeting certain criteria in Milwaukee, Racine and Kenosha counties.

Patrick Schloss, FIRE vice president, confirmed the board’s approval.

However, Gorman first must execute “a number of significant steps in the closing process” to secure the property and the financing needed to complete the estimated $20 million proposal. The plan is to transform the venerable building and property at 5706 Eighth Ave. into a 65-room hotel, Schloss said.

Matkom said FIRE, which doesn’t make direct loans, plays an important role in negotiating for a buyer of the tax credits.

Because Gorman also has some $4 million in historic tax credits to revitalize the building, Matkom said it will be best if the buyer of the new market and historic credits is a single entity.

More financing

In addition, Gorman will seek $10 million in conventional lending to finance construction, with that loan money to be replaced with low-interest financing under the federal EB-5 program.

That program invites foreign investors to put their money into American economic development and awards them by providing them with visas after five years.

Matkom said he now has to find financing sources to make up the remaining estimated $4 million to fund the project.

Some of that could come from the Kenosha Area Business Alliance in the form of a loan, as well as from the city of Kenosha, possibly through creation or expansion of a tax incremental financing district.

Showing support

KABA and the city have expressed support for the project, and both parties have discussed the proposal with Gorman.

“KABA could be another lender for the project, but we haven’t approached them formally yet. They’ve been very supportive — extremely supportive in bringing users (of the proposed hotel) to the table,” Matkom said.

“I think we’re going to get there because there is a lot of momentum for jobs, and it keeps people downtown.

“In order to revitalize downtown Kenosha, you need more people to live there and (seek recreation) there. You have jobs down there, but you need more jobs. You need more services,” Matkom said.

According to Matkom, Gorman is targeting March 31 for closing and hopes to open the hotel in spring 2016.

“That’s driven by all the parties. We want to hit the summer running, and we want to open a year later, potentially by March or April (of 2016),” Matkom said.

Construction to begin at Lion’s Ridge

By: Scott N. Miller, Vail Daily, September 15, 2014

VAIL — It’s been more than a decade since a big rental housing project was started in Vail. And, like anything in Vail, this project has carried plenty of controversy.

Town officials and developers Tuesday will hold a ground-breaking ceremony for the Lion’s Ridge apartments. That 113-unit project, on the eastern half of the 10-acre Timber Ridge property, will essentially replace the old units — which date to the early 1980s. But instead of units geared toward seasonal workers, these new apartments are aimed at year ‘round residents.

Every unit in the new apartments will have its own laundry equipment and furnace. The new apartments will also feature a small storage area for every bedroom.

At a Vail Town Council meeting in November of 2013, community development department director George Ruther noted that the plan for the new apartments is to present an in-Vail option to people who can live elsewhere.

That’s a scaled-down vision from several more ambitious plans floated over the years.

Those plans began percolating in the early years of the previous decade. Then, the original owner of Timber Ridge was ready to put the property on the open market, since federal tax incentives that kept the property in the “affordable” housing pool were set to expire.

Former Vail Mayor Rod Slifer recalled that town officials at the time believed the town wouldn’t be able to replace those 198 units of employee housing, and decided to buy the property.

“The council at the time felt it was important to keep it there for housing,” Slifer said.

Since then, there have been at least three proposals to replace the apartments with everything from rental housing to entry-level condos. All those proposals ran into various roadblocks, most having to do with the cost of building in Vail.

The most recent proposal — the one breaking ground Tuesday — is more modest. Developers Jen Wright and Gary Gorman brought the essentials of this plan to the Vail Town Council in 2013. Even after approval in November of 2013, more hurdles cropped up.

The project was supposed to break ground in May, with an eye toward the first tenants moving in in time for the 2015-16 ski season.

But ground breaking was delayed, due to what Wright said were difficulties with possible lenders. In late summer, Wright and Gorman asked to modify the original agreement, extending the terms of the ground lease for the apartments from 35 to 50 years, and adding an option for the developers to buy the property within the first decade.

That purchase price is about $5 million, roughly half of what the town paid for that part of the property.

Developers said both those changes were essential to get the project running. And plan supporters on the council have argued that contributing property, in whole or part, is standard practice in building workforce housing in mountain towns. However, the prospect of selling town land was a sticking point for some residents and a couple of council members.

Second-term council member Margaret Rogers first ran for office in 2007 pledging to get a Timber Ridge plan in place. She opposed the latest deal, both because of the potential cost to the town and the fact there aren’t more units being built.

Rogers and fellow council member Dale Bugby were in the minority on council, and cast the dissenting votes when the plan was put up for approval.

Wright praised Vail Mayor Andy Daly and Town Manager Stan Zemler for keeping the process going through the most recent hurdles.

“We couldn’t have gotten this done without the town,” Wright said.

Slifer believes the deal remains a good one for the town.

“It’s been a good investment,” he said. “It’s terribly important to preserve rental housing in town.”

Craig Cohn, a member of the Vail Local Housing Authority board, said he’s also eager to see new housing built.

“As a member of the (board), it doesn’t really matter what the deal was,” Cohn said. The important thing, he said, is building new housing for Vail’s front-line workers

“The town of Vail is under-housed at this price point,” Cohn said. “The sooner we get going the better.”

And, Wright said, “the town will end up with a nice project. It’s going to be a great place for people to live.”

Renovations bring multifamily affordable housing to W. Valley

By Kaila White, The Republic, September 14, 2014

One of the best things about Elizabeth Maciel’s new apartment is the brand-new playground just steps from her front door, where she can watch her four young children play through the blinds in her favorite part of the house — the spacious kitchen.
With three bedrooms and a renovated bathroom, her home is bigger and nicer than anything she has ever lived in, but the rent is about half as much as her other homes, she said.

Maciel, 26, lives in Ironwood Village, a formerly foreclosed apartment complex in downtown Glendale’s Centerline district that was recently renovated to create affordable housing for low- and moderate-income people.

Monthly rents range from about $570 for two-bedroom apartments to $775 for three bedrooms, utilities included. The complex is among a handful of similar new and planned revitalization projects designed to bring safety and stability to neighborhoods in the West Valley.

The city, state, a non-profit and a developer partnered on the complex’s $9.5 million renovation, with $2.1 million coming from the city via federal neighborhood-stabilization grants.

The developer, Gorman & Company Inc., also has plans for a multifamily affordable-housing project in Avondale. Madison Heights, a public-housing community near Van Buren Street and Dysart Road, will be demolished and rebuilt once the developer secures funding.

Madison Heightsand a complex in west Phoenix were the top two priorities on Housing Authority of Maricopa County’s list of redevelopment projects, according to Brian Swanton, Gorman & Company’s Arizona market president.

They also are the only projects in Arizona approved by Congress for transformation under the new Rental Assistance Demonstration program.

Though single-family homes are the most popular, some West Valley cities are partnering with non-profits and private companies to build multifamily affordable-housing complexes, some to help an area recover from foreclosure, others to improve dilapidated public housing.

Ironwood Village includes 95 units, a pool and many new amenities, including solar panels, a computer lab, a fitness room and a multipurpose room, which houses free before- and after-school programs.

Elizabeth Maciel reads one of her children’s Mother’s Day poems in the kitchen of her three-bedroom apartment at the recently renovated Ironwood Village in Glendale.

Since moving in, Maciel has been able to afford a few luxuries. She recently took her children to dinner and to see “Teenage Mutant Ninja Turtles.”

“I would love to get a house of my own someday, but I know me staying here, being here, I think I’ll be able to do that. You know, afford this place but save up on the side,” she said.

It’s common for people with low incomes to spend as much as 50 percent of their gross monthly income on rent, which makes it difficult to afford other necessities or save for a home of their own, said Michael Trailer, director of the Arizona Department of Housing.

“It goes beyond just housing,” he said.

“In our community, we like people to be productive and pay taxes; it’s pretty hard to do that when you don’t have decent housing. Simply put, housing creates stability in families and communities.”

Ironwood Village is an example of the new model of multifamily affordable housing, he said.

“We’ve come a long way from the old days of public housing. We’re not just trying to put a roof over people’s heads; we’re trying to build these projects in locations close to jobs and education and services which provide the best access to opportunity.”

In order to be able to receive federal funding, Gorman & Company had to find a foreclosed complex within certain areas that the U.S. Department of Housing and Urban Development deemed neediest and with the most potential for impact, a difficult task that had them looking at about 40 properties before picking Ironwood Village and another one in Phoenix, Swanton said.
Most of the affordable-housing revitalization is in or near Phoenix because of greater access to transportation for work and school.

The lack of light rail has created a challenge for West Valley revitalization, as there are more incentives for developers to buildaround the light-rail area, Swanton said.

But Ironwood Village fell within an approved area by a single block, he said. Gorman & Company, Catholic Charities Community Services, the Arizona Department of Housing and Glendale partnered to revitalize it.

“It was a property that was literally falling apart at the seams. … Physically, it was a nightmare,” Swanton said. “And quite frankly, the existing tenant base was a challenging one.”

About half of the residents moved out during the renovation process — most when they saw the new credit- and criminal-background standards, he said. In other cases, up to eight people were living in a two-bedroom apartment, which is considered overcrowding by federal standards.

Gorman was required to use the federal funding to find more-suitable homes for those families, in some cases giving up to $30,000 for their relocation, Swanton said.

Year over year in August, police received about half as many calls for service from the complex once Gorman took over and began renovation in 2012, according to police logs.

“If we go into a neighborhood like where Ironwood is and rebuild the complex, it starts to revitalize the neighborhood. It’s like dominoes,” Trailer said. “We’ve seen it over and over again where we’ll go into an area that has deteriorated and rehab an existing complex and, all of a sudden, everybody else starts fixing theirs up, too.”

Gorman completed another multifamily affordable-housing project in 2011, the Glendale Enterprise Lofts across the street from Glendale High School in the Centerline district, which runs along Glendale Avenue between 43rd and 67th avenues.

Since then, a gourmet taco shop opened and a shopping center was remodeled down the street, and the high school opened a new culinary building — investments that are related to the Lofts’ improvement, said Brian Friedman, Glendale’s director of economic development.

“There is a positive ripple effect. Once one business starts remodeling, we see others also investing in new projects, improving their properties and new private investment being planned,” Friedman said.

A shopping center, Circle K, McDonald’s and Burger King have been remodeled near Ironwood Village, he said, and Ascent, a data-center company, has planned a new campus nearby.

Both Ironwood Village and Glendale Enterprise Lofts were 100 percent occupied within weeks of reopening.

Most other West Valley cities that receive federal funding for housing aid, such as Peoria, use it mostly for single-family homes through work with Habitat for Humanity and Chicanos Por La Causa.

In addition, the non-profit Native American Connection has bought land in Glendale, near Laurie Lane and 59th Avenue just north of Centerline, and is awaiting financing to build multifamily affordable housing for seniors.

Gorman plans $20M conversion of Heritage House in Kenosha into boutique hotel

Sean Ryan, Milwaukee Business Journal, September 5, 2014

Gorman & Co. Inc. is planning a $20.4 million conversion of Kenosha’s historic Heritage House Inn, which is currently vacant, into an 80-room boutique hotel.

Heritage House, built in 1916, closed in the mid-2000s and was damaged by a fire in 2011. Its restoration would include a new pub-style restaurant for 195 people, a 4,000-square-foot banquet hall and ballroom, and swimming pool, according to a report from First-Ring Industrial Redevelopment Enterprise Inc., or FIRE. The building is at 5706 Eighth Ave.

The hotel would have 75 full-time workers and its renovation would create 110 construction jobs.

Gorman & Co., in Oregon, Wis., is assembling a range of financing sources, including EB-5 foreign investment money, historic tax credits, a county loan and New Markets Tax Credits that FIRE would award.

Most of the budget, $10 million, would come from foreign investors through the federal EB-5 program. That program offers investors and their families green cards in exchange for lending money to job-creating U.S. projects. Gorman previously used EB-5 investors to renovate a building in the former Pabst Brewing Co. campus in Milwaukee into the Brew House Inn and Suites.

FIRE, a community development organization run by the city of West Allis, next week will consider awarding $10 million in New Markets Tax Credits to the development. Those credits, once sold to investors, will generate about $2.77 million in equity for the development, said Patrick Schloss, vice president of the organization and West Allis community development manager. FIRE awards the credits to projects in Milwaukee, Racine and Kenosha counties.

HeritageHouse would be the first Kenosha project to receive tax credits from FIRE.

“It meets FIRE’s goal because it is in a low-income census tract,” Schloss said. “It is a blighted property.”

The project budget also includes a $2 million loan from the Kenosha Area Business Alliance, and $3.84 million in historic tax credits.

Ziock developer: Work to start in 2015 on downtown Rockford hotel

By Brian Leaf, Rockford Register Star, Aug. 14, 2014 @ 4:00 pm

ROCKFORD — The company planning to renovate the Ziock Building, an abandoned 13-story downtown factory, into a $53 million hotel and conference center won’t begin work until February 2015.

“We forecast being able to open in early spring of 2017,” said Laura Narduzzi, regional manager for developer Gorman & Co. of Oregon, Wisconsin.

City crews, meanwhile, will be active this fall in the neighborhood as part of a development agreement with Gorman. Eminent domain proceedings on three properties owned by S&L Warshasky Inc. at 501 and 431 S. Main St. and 319 Cedar St. are working their way through the Rockford City Council. The city purchased a warehouse at 514 S. Church St., City Engineer Matthew Vitner said, and has another storage building at 330 Cedar St. under contract.

Buildings on all five parcels are to be razed for parking for the hotel and a train station at a yet-to-be-determined site along Union Pacific tracks running parallel to Cedar Street.

The hotel complex is expected to feed off visitor traffic from a $21 million indoor sports center being developed across the Rock River in the former Ingersoll building.

Narduzzi said Gorman has internal architectural and design, construction and operations teams working on the project.
“The history of the building will play the driving role in the overall design,” Narduzzi said.

Construction costs will be partially offset by state and federal historic tax credits because the building is designated a landmark. Gorman can sell tax credits to investors to help the investors lower their tax liabilities while helping the company raise money to pay for construction.

Gorman also plans to pursue project funding through EB-5, an immigration program that grants foreign nationals a visa if they invest $500,000 in a project in high-unemployment areas that create or preserve 10 full-time jobs.

“We have been working on the marketing materials so our partner can begin marketing to potential investors,” Narduzzi said.

The Diversification Strategy: Tom Capp and Gorman & Company Develop a variety of projects, Tap Different Funding Sources

Tax Credit Advisor, August 2014

The way that Tom Capp and Gorman & Company, Inc. approach the development of multifamily rental housing, historic preservation, and mixed-use real estate projects is to always be on the lookout – for new opportunities, funding sources and lessons.

“We really consider ourselves community developers as much as we do multifamily developers,” says Capp, the company’s chief operating officer. “We don’t go out and pick a site and say, ‘Hey, let’s go develop a project there.’ The vast majority of our developments have been identified as community priorities by the city, a significant nonprofit, or a housing authority.”

Company Background, Geographic Focus

Based outside of Madison, Wisc., Gorman & Company employs 235 people nationwide, owns and manages almost 4,000 housing units, and manages about 1100 units for other owners. The firm was established 30 years ago by CEO Gary Gorman, a former lawyer who represented developers and syndicators. Capp, born and raised in Chicago, joined the company 20 years ago from a planning and government background, starting as director of a real estate development, and then moving up to executive vice president and later to COO. While primarily a development outfit, the vertically-integrated firm also has in-house construction, architectural design, property management, and asset management divisions.

“As our development leadership takes a project through from beginning to end, we have all of those functions at the table,” says Capp. “That’s our business model. We try to capture the strengths of the integration of all of those elements and the histories and lessons learned in each of those areas.”

The company currently focuses its development in Wisconsin, Illinois, Florida, Arizona, and – new this year – Colorado. In addition to the Wisconsin headquarters, the company has a satellite office in each state (Chicago, Phoenix, Miami, Denver) run by a market president who finds and develops projects in the state. They receive full support from what Capp calls “the mother ship in Wisconsin.” The market presidents, experienced and well-regarded in their states, generally come from the nonprofit housing or housing authority worlds. “Our market president is often the most respected developer in their state,” says Capp. “They take a deep dive in their state, and their integrity is unquestionable.”

Gorman & Company’s projects are primarily infill developments, mostly in urban areas, and frequently in “challenged” neighborhoods. “The lion’s share of what we do is multifamily housing,” says Capp. “And within that space, a large percentage is either workforce housing or low-income housing tax credit developments.” The company has completed about 80 LIHTC projects to date.

In addition, the company develops market-rate housing, commercial, and mixed-used projects. In many cases, the firm utilizes federal—and sometimes also state—historic tax credits, alone or in combination with housing tax credits.
A number of its affordable apartments target local artists and contain live/work units with studio space as well as galleries.

Variety of Projects

A major community development and revitalization project is The Brewery in Milwaukee, Wisc., a redevelopment site near downtown that once belonged to the Pabst Brewing Company. Gorman & Company is methodically developing projects from the 26 historic buildings and sites that were part of the brewery complex. These projects include a mix of historic rehabilitation and adaptive re-use of some of the existing buildings, along with demolition of others followed by new construction. “We committed to the city and other players, before the recession, to play a significant role in redeveloping that area,” says Capp.

The two projects completed so far are:

Blue Ribbon Lofts, a 95-unit mixed income apartment development financed largely with federal low-income housing and historic tax credits.
The Brewhouse Inn & Suites, a 90-room boutique hotel and restaurant funded partly by historic tax credits and by equity raised from Chinese investors under the federal EB-5 program.

Currently under construction:

• A 60,000-square-foot office building funded by equity raised from Chinese investors under the EB-5 program;
Frederic Lofts, a modern-design, 100-unit market-rate apartment project funded with direct equity investments from a Chinese development firm that Gorman & Company met while raising EB-5 funds in China. Capp says the market-rate development will provide a “new kind of hipster housing in this part of downtown.”

Elsewhere, Gorman & Company is developing:

Lion’s Ridge Village Apartments, in Vail, the firm’s first project in Colorado. This involves the construction of four new apartment buildings with a total of 114 units located on part of a 10-acre site occupied by an existing apartment complex purchased by the town of Vail. The town is providing the land through a 50-year ground lease. Seventy percent of the new apartments will be workforce units, deed-restricted as housing for employees of local businesses, including the local ski resort.
Coffelt-Lamoreaux Park, Phoenix, Ariz. In partnership with the Housing Authority of Maricopa County, the company is redeveloping and converting 296 units of public housing to assisted rental housing under the federal Rental Assistance Demonstration program, using federal housing and historic tax credits and tax-exempt financing. The firm has a master development agreement (MDA) with the housing authority to redevelop all of its public housing.
Paradise Pointe Senior Residences, a new 46-unit LIHTC development for seniors in Monroe County in the Florida Keys, Gorman & Company’s third tax credit project in the Keys.

Examples of mixed-use projects completed by Gorman & Company include:

Villard Square, in Milwaukee, containing 47 apartments on three floors above a new 20,000-square-foot city library. The apartments were designed as “grandfamily” housing for grandparents raising their grandchildren.
Grand River Station, in La Crosse, Wisc. This new construction project combines a city transit center with 72 affordable and market-rate apartments. The development also includes 20 for-sale condos on upper floors as well as retail stores and gallery space at the ground level.

“In the last few years, we’ve had pretty good luck in mixing uses in different ways,” says Capp.

The COO says the company is stronger and different than it was five or six years ago as a result of changes made in response to the recession. According to Capp, the firm used to tie its fortunes largely to low-income housing tax credit development. During the downturn, it decided to diversify both in the types of projects it develops as well as the funding sources used.

One new source has been foreign investor capital procured though the EB-5 program. This program fast-tracks the issuance of visas and ultimately green cards to foreigners (and their families) who invest $500,000 or more in specific projects or businesses in the U.S. Solicitation offerings to foreign investors must be made though federally designated regional centers. Gorman & Company has successfully raised EB-5 capital for two projects so far and anticipates more going forward. In fact, the company has established its own EB-5 regional center to expedite the process of raising foreign investor capital for real estate projects in Chicago, Milwaukee, and other parts of Illinois and Wisconsin.

Love for Development

Capp, an affordable housing veteran, continues to enjoy being a developer.

“I came into the development side from the planning and government worlds, which I loved. But there you do policy work and plans. You often don’t see real tangible results.

“What I really love about our role as community developer is getting to creatively devise how to build something that ends up being tangible. Once it’s built you are able to kick it and take your kids by it.”

Capp also relishes improving the lives of the residents of the company’s developments. “When you meet somebody who lives in quality housing that they never had an opportunity to have before, that’s very satisfying,” he says. “I love the very real effects you have on peoples’ lives.”

Timber Ridge construction weeks away?

Scott N. Miller, Vail Daily, July 31, 2014

VAIL — After several years and a few false starts, the job of replacing the Timber Ridge apartments should start in the next few weeks.

Work was supposed to begin in May to replace the apartments on the eastern side of the 10-acre parcel. That work was delayed when a development team led by Gary Gorman and longtime valley resident Jen Wright ran into unexpected hurdles obtaining financing for the project.

Wright said the hang-up primarily involved the length of the land lease for the new apartments. The original agreement called for a 35-year lease. But, Wright said, lenders all asked for a longer lease term. The Vail Town Council on Tuesday will be asked to extend that lease out to 50 years, which will enable the developers to complete their financing agreements.

George Ruther, head of Vail’s Community Development Department, said the lease extension could be a good thing for both the town and the developers. The developers get the extra years lenders require, while the town will get another 15 years of lease payments on the property.

If council members approve the deal, Wright said construction work could start in the next few weeks.

GETTING READY

While building hasn’t yet begun, Wright’s group has been working to get ready to tear down the eight existing buildings that will make way for four new ones. That work right now is focused on removing asbestos from the 1970s-vintage buildings, a project that came as something of a surprise to everyone involved. That work should be finished in the next couple of weeks, Wright said.

When work does start, Wright said it will take about a year to get the first of the planned 113 units ready to rent. Wright said most should be ready to rent by the time the 2015-16 ski season begins, with the rest coming to market during the season.

YEAR-ROUND TENANTS

When the new apartments are ready to rent, they’ll come to market with year-round tenants in mind. The new apartments will have storage lockers for every unit, and every apartment will get its own laundry equipment.

Town Council member Greg Moffet said more room and better amenities is a matter of “respect for the people we have working for us.”

Town Council member Margaret Rogers opposed the current plan, asking instead for more units on the property. Now, though, she said she wants this plan executed as quickly as it can.

While the eastern half of the property is ready to be rebuilt — and renamed Lions Ridge — nearly 100 of the older Timber Ridge units remain. While there was talk several years ago of re-doing the entire site, Ruther said the western half of the complex will stay as it is for the foreseeable future.

Ruther said the town — which owns the property — is putting about $1.3 million this year into exterior and interior renovations on the western half of the property. No one puts that kind of money into 92 units unless they’re going to stay in the rental pool for a long time.

But, with Vail Resorts leasing about half the units and individuals renting the rest, Ruther said revenue from the western half of the property pays the town’s remaining debt on the entire parcel.

SHORT-TERM IMPACT

While construction will take more than 100 apartments out of Vail’s rental pool for the coming ski season, Ruther said he expects people will be able to find other housing in the valley.

“We knew there would be some short-term impact, but this is the only way we can re-develop the property,” Ruther said.
When construction does begin, it will mark the end of a long period of planning and several false starts. Moffet said one such plan was well underway when he ended his first stint on council in 2007. And Rogers said she made getting Timber Ridge re-done part of her first campaign for a council seat.

“That was six-and-a-half years ago now,” Rogers said. “This has been a long time coming.”