Yearly Archives: 2017

Viewpoint: Denver voters seek action on affordable housing

Co-Written by Kimball Crangle and Melinda Pollack, Denver Business Journal, May 5, 2017

While Denver’s civic leadership focus turns to infrastructure, Denver voters continue to rate the affordable housing challenge as a top priority that they would like to see the city council and mayor more aggressively address. We believe there’s a path forward that yields a more inclusive, connected and affordable Denver for all, if we invest in both.

A recent poll of likely Denver voters also provides evidence of strong support for common sense laws to enhance the rights of renters, plus raise more civic capital to stem the affordability crisis. The lack of affordable housing is affecting virtually all households and is rapidly reshaping our city’s neighborhoods, racial composition, culture and distinctiveness. The poll reveals these ongoing concerns, and also suggests a path forward for addressing the issue in a more substantive way.

Terraza del Sol is an affordable housing project in west Denver.

Terraza del Sol is an affordable housing project in west Denver.

The poll, co-sponsored by Enterprise Community Partners and All In Denver, two nonprofit organizations that advocate for affordable housing and social equity, was conducted by a professional community relations firm in the first half of February and carries a margin of error of about 5 percent. The organizations conducted the poll in the aftermath of Denver’s effort last fall to create a new dedicated fund for affordable housing. Billed at the time as a “first step” to address the city’s affordable housing crisis, the new dedicated fund is estimated to create up to 600 affordable units per year in a city that is tens-of-thousands short. The poll was designed to gauge whether the issue remains high on voter’s minds, and whether there is an appetite to move more forcefully on the issue.

The poll revealed as least four major themes that Denver civic leaders should consider.

  1. There is broad support for the city’s housing fund that was created last fall.Seventy-four percent of Denver voters approve of the housing fund that was established by a new property tax and developer fees last fall. Notably, only 19 percent of Denver voters disapprove. Approval of the housing fund extends throughout the electorate, including fiscally conservative voters and high-income households. Created through a split vote and with organized opposition from the business community, Denver’s City Council members should be reaffirmed that their actions are viewed by constituents as both necessary and responsible.
  2. Affordable housing continues to be rated as one of the most important issues for the city to address. When asked to identify two issues that voters would most like to see the city council and mayor address, only education outranks the housing-related concerns of affordable housing, homelessness and cost of living. Transportation, a current focus of city policy and funding efforts, ranks a distant fifth.
  3. There is strong support for common sense policies to protect renters.Colorado ranks low nationally in tenant protections, which makes it more difficult for renters to qualify for and remain in affordable units. The Enterprise-All In Denver poll explored a variety of common sense protections that could level the playing field for tenants and be immediately enacted by the city. Tenant protections such as preventing landlords from profiting on application fees, requiring landlords to have good cause for evictions and allowing tenants to use all sources of income to qualify for housing all received support from more than three-quarters of survey respondents.
  4. There is evidence that voters would support bolder solutions to affordable housing. To test the appetite for supporting bolder approaches to affordable housing, the poll sought opinions on a potential bond issue that could create from $150 to $300 million in capital for a variety of initiatives. Similar bond issues have recently passed in several cities and counties along the West Coast where housing affordability issues are arguably more severe than Denver. Bonding the affordable housing package that was approved last fall, which would result in no increase in taxes, registered support from 75 percent of survey respondents. A more ambitious scenario that would create a slight increase in property tax, was supported by two-thirds of survey respondents.

The path forward to a bolder policy response to Denver’s affordable housing crisis is set by the city council’s action last fall, and is bolstered by the findings from the Enterprise-All In Denver affordable housing poll. In addition to establishing a dedicated fund, the city council authorized that a housing plan be developed to provide more comprehensive solutions. The plan, to be completed this year, could provide the blueprint for a bolder solution in 2018, including additional resources and stronger protections for lower income members of our communities.

We hope that our policymakers join us in continuing to keep affordable housing front and center in the civic conversation, much like the issue continues to be front and center in the minds of Denver voters.

Kimball Crangle is co-founder of All In Denver and Colorado market president for Gorman & Company, a development firm specializing in affordable housing. She can be reached at 303-887-2707 or kcrangle@gormanusa.com. Melinda Pollack, also a co-founder of All In Denver, is vice president and Denver market leader with Enterprise Community Partners, a national non-profit organization advancing affordable housing. She can be reached at 303-376-5405 or mpollack@enterprisecommunity.org.

Wisconsin-based Developer Gorman & Company Recognized as one of the Top Ten Affordable Housing Developers in the Nation

Published on Urban Milwaukee on April 26, 2017

Madison, WI—April 25, 2017— Affordable Housing Finance (AHF) has named Wisconsin –based Gorman & Company (Gorman) as one of the top ten affordable housing developers in the nation in the only listing of its kind, AHF 50. AHF surveyed over 110 companies regionally and nationally to produce the annual report on the nation’s top 50 developers which publishes the number of affordable housing construction starts and completions by developers included on the AHF list and provides a picture of emerging industry trends. Gorman rose to number 10 on the AHF 50 listing from number 16 in 2015, breaking ground on nine innovative developments throughout the country that are comprised of 776 affordable apartment homes.

Gorman CEO and founder, Gary Gorman, who has stewarded his company’s growth –from its launch with a modest 24-unit project in small-town Wisconsin to successfully completing over 5000 affordable apartment homes nationwide and elevated the face of public housing by partnering with communities and the public sector remarked:

“We have been developing affordable housing for over thirty years. It is very gratifying to receive this recognition.”

Gorman is also featured as the cover story in AHF’s April/May edition. Here is the link.

In the profile of Gorman by Donna Kimura, deputy editor of AHF, Jack Manning, president and CEO of Boston Capitol, a long-term financing partner on 14 of Gorman’s leading edge projects, appraised Gorman with a snapshot observation of its creative and collaborative development approach:

“…Gorman is the type of company that loves innovation.”

Gorman is planning to break ground on 12 new projects around the country this year and projects completion of over 1000 additional affordable housing units. The company is also looking to parlay its strong foundation of partnerships with public housing authorities and to expand its portfolio of Rental Assistance Demonstration (RAD) projects.

Recently, Gorman completed Madison Heights (the first RAD project ever completed in Arizona) in partnership with Housing Authority of Maricopa County, (HAMC), transforming a severely dilapidated post-World War II-era public housing project in Avondale, AZ into a pioneering and sustainable 143-unit community that also set aside 30 apartments to provide permanent homes and a social incubator for “chronically homeless” residents.

In Rockford, IL Gorman is partnering with the Rockford Housing Authority (RHA) on a RAD initiative to replace and revision 1100 existing units of public housing at scattered sites, incorporating fresh architectural solutions, social and educational support and a strong homeowner component to create a new blueprint for affordable housing. Replacement units are owned in partnership between Gorman and Bridge Rockford Alliance, Inc., a wholly owned subsidiary of the RHA. The Grove at Keith Creek, a 49 –unit multi-family residential community (with 22 units targeted for home ownership) is slated for completion this summer and is the second phase of that initiative.

To advance the company’s goals for the future and to usher in the next phase of growth, Gorman has also announced a succession plan effective January 1,2018. Under the new leadership structure, Gorman founder and CEO, Gary Gorman will become chairman of the Gorman’s Board of Directors and continue active involvement in all significant decisions for the firm. Brian Swanton, currently Gorman’s Arizona & Southwestern States Market President will take the reigns as CEO. Current COO, Tom Capp, was joins Gorman’s Board of Directors as vice-chairman. Mr. Capp will also serve as lead advisor on strategic planning and growth for the firm identifying new market opportunities that fit the critical needs of communities.

About Gorman & Company, Inc.

Gorman & Company is nationally recognized for revitalizing communities and urban urban neighborhoods through innovative public-private partnerships. As a trusted partner and respected industry leader since 1984, Gorman specializes in downtown renewal, the preservation of affordable housing, workforce housing and the adaptive reuse of significant historic landmarks with offices in Milwaukee, Chicago, IL; Denver, CO; Miami,FL and Phoenix, AZ.The company maintains in-house design, construction, and development divisions that have successfully completed over $900 million new construction and major renovations since its founding 33 years ago. Its affiliated property management firm manages over 5,000 units around the country.

Residential Component of $60M Wis. Mixed-Use Opens

By Jeffrey Steele of Multi-Housing News

Madison, Wis.—Carbon at Union Corners, a mixed-use community including a 90-residence apartment community with a substantial affordable housing component, has broken ground in Madison, Wis.

union_corners

A long-vacant industrial site once occupied by Ray-O-Vac Corp. is now the site for Gorman & Co.’s new development.

Carbon is the result of a public-private partnership between the city of Madison, Dane County and the state of Wisconsin. It is the second phase and first residential phase of Gorman & Company’s $60 million multi-stage transformation of a long-vacant industrial site once occupied by Ray-O-Vac Corporation. “Union Corners is a master development that we embarked on three years ago,” Gorman & Company’s Milwaukee-based president of the Wisconsin market Ted Matkom told MHN.

“It was started through an RFP process. Ray-O-Vac abandoned the site decades ago, and the city of Madison took title to the big six-acre site and cleaned the site through remediation grants to the point where it was developable. It’s right on a main thoroughfare in Madison called East Washington Avenue, and surrounded by historic neighborhoods that are extremely stable but more moderate income.”

Six neighborhoods touch Union Corners, “and we talked with all of them,” Matkom continued. “The priorities were a place to live, work and play. After that, they identified their top desires as health care, a supermarket, and affordable housing. They really emphasized the need for a development that didn’t gentrify their neighborhood. They wanted something that blended into the neighborhood. We got them the UW Health Clinic, Fresh Thyme grocery and this Carbon development, with a large mix of housing ranging from market rate to apartments earmarked for 30 percent of AMI.”

The construction cost is estimated at $16 million. Completion is slated for June 2017.

Carbon at Union Corners features two four-story buildings linked by courtyard plaza. In addition to the 90 apartment homes, there will be 18,000 square feet of ground-floor specialty retail space and 92 underground parking spaces for residents. Eighty-five percent (or 76) of the one-, two- and three-bedroom apartments will be designated as “affordable” and targeted to families earning 30, 50 or 60 percent of Dane County’s median income, which is $82,600 for a family of four.

Four units will be market rate. Monthly rental rates depend on annual household income, and will range from $380 to $940 for a one-, $455 to $1,245 for a two- and $920 to $1,460 for a three-bedroom unit.

Apartments will feature walk-in closets, in-unit washer-dryers, large kitchens and Magic-Pak self-contained HVAC systems. Amenities include a fitness center with cardio equipment, treadmills, weights and stationary bikes.

When considering acquiring the site, Gorman & Company had to weigh its positives and negatives, Matkom said. “The plus was it is a vacant site remediated by the city of Madison, and 100 percent ready for development,” he reported. “The minus was the site was incorporated in a highly urban area touching six neighborhoods. The time we spent in community meetings was extremely long. There were a lot of stakeholders who had to be appeased to ensure the development was a fit for the community.”

One of the points of contention was surface parking. Neighborhood residents didn’t want a sea of asphalt encircling the development. “They wanted underground parking,” Matkom said. “So we had to put in all underground parking, and from a cost perspective, it was challenging to incorporate that into the project.”

A nod to the site’s history will be woven into Carbon. Bricks from the long-demolished Ray-O-Vac factory will be creatively repurposed, and the vintage French Battery stone signs will be featured in common areas of Union Corners.

Gorman & Co. founder looks to future by naming new CEO

Written by Larry Avila of the Wisconsin State Journal

Gary_Gorman

OREGON — Gary Gorman recognized that for the development company bearing his name to continue without him someday, he needed a leadership transition plan to ensure its future.

In mid-March Gorman & Co., which he built from a one-man operation from a basement office in summer 1984 to a company with about 250 employees and operations in five states, announced that plan. Gorman will transition the daily management of the company to Brian Swanton, the Arizona market president who will take over as CEO on Jan. 1. Gorman will still be involved with the business as chairman of its board.

Gorman, who has not determined a retirement date, said announcing a leadership succession plan now was the responsible thing to do.

“I’ll still be very involved in the company, but I’ll be less involved in the day-to-day side of things starting Jan. 1,” said Gorman, 61. “I don’t consider this retiring at all, but when you grow a business to a certain level, and when (the owner) gets over 60 years old, people do start to ask, ‘What’s next?’

“I wanted to get ahead of that question. I wanted to have input on (the future of the business) as opposed to someone else making that decision somewhere down the line.”

In the beginning

Gorman & Co. specializes in housing developments from affordable housing to upscale condominiums, and does more than $100 million in business annually. It employs about 250 people and has operations in Milwaukee, Phoenix, Chicago, Miami and Denver.

Corporate_Office

Gorman & Co. also has been very active in Madison.

The company’s recent projects include the Union Corners development continuing to rise at East Washington Avenue, Milwaukee and Winnebago streets. The company also was involved in converting space at the Bishop O’Connor Catholic Pastoral Center, a former seminary and home to the diocesan headquarters, to apartments now referred to as Holy Name Heights.

Before he got into housing development, Gorman practiced law for about four years.

“The basement office where I started my business was torn down long ago,” he said. “When I look back on it, I never expected the company to grow to the size it is today.”

Tom Capp, the current chief operating officer who will become vice chairman of the board on Jan. 1, joined Gorman about 22 years ago and led the company’s expansion outside Wisconsin, most recently to Illinois.

“We have deep roots in Wisconsin and we’ll always be a Wisconsin-based company,” Gorman said.

He said Swanton, who has grown Gorman & Co.’s business in Arizona for the past eight years, is ready for a larger role.

Gorman said establishing the future leader of the company well before his retirement also ensures to future investors the firm will be around to see projects through and it also helps in the recruitment of new employees as it looks to expand into new markets.

hallway

“Yes, I want to ensure the company continues after I’m gone, but what it’s really about when a company actively is recruiting young people that have options and they see the CEO of our company is a guy in his 60s, they may not consider us,” Gorman said.

Gorman said moving the company forward will take new thinking.

“It took a certain skill set to grow the company from zero to $100 million,” he said. “To get to that next level, it will take someone who may be better at systems and monitoring metrics, and I think Brian has the skills to continue growing the business.”

The future

Implementing a transition plan while an owner still will be involved in the business is a sound strategy, said Sherry Herwig, director of the Family Business Center at UW-Madison.

“It lets employees know that during the transition there will be some consistency and continuity,” she said. “When the new leader takes over, the employees can take comfort knowing the person who had been leading the company all along, will be there and be part of the decision-making process.”

architets

Gorman said his company’s success has been built through recruiting good people who could develop markets familiar to them.

“What I hope to see is the company experience steady but not rapid growth because companies that are the highest risk are start-ups and those that grow too rapidly,” he said. “In terms of the transition and working with Brian, I plan to work with him so he understands what he’ll have to do to be the CEO versus just being a market president.”

Gorman said once the company’s daily management is transitioned to Swanton, he will focus on special projects including finding ways to approach building projects more cost-effectively.

“I’m feeling good and I’m healthy,” Gorman said. “I’m still really interested in this business and frankly, I don’t want to retire.”

How Milwaukee’s Northside Housing Initiative Is Keeping the Neighborhood Affordable

 

How do you revitalize a neighborhood that’s faced years of vacancy and disinvestment without displacing the people who call it home? It’s a problem that Milwaukee’s Northside Housing Initiative has been tackling for the last eight years.

1914 home restorationA 1914 home was restored in 2013.

The Northside Housing Initiative (NHI), a project of national developer Gorman & Company, is in the business of restoring tax foreclosed houses. Formerly a booming neighborhood for industrial workers, the north side has seen high rates of vacancy in recent years, following the national housing crisis and the Great Recession. As part of the still-ongoing initiative, the city of Milwaukee acquires foreclosed houses for $1 and donates them to the NHI, which carefully refurbishes them over the course of about six months. Not all of the houses are historic, but roughly 20 percent date from 1910 to 1925, and their styles range from bungalows to Queen Anne to Victorian Revival.

“You do find some that are really in pretty good shape, they still have some pretty good bones to them,” says Marc Ott, lead architect for the Wisconsin market at Gorman, of the historic homes refurbished as part of the initiative. “And then of course you find some that are in the far, complete opposite end, really not habitable at all.”

He says that making sure that the heating and cooling, plumbing, and electrical systems are safe and up to code takes top priority in the rehab projects. Gorman & Company has completed eight phases of the initiative thus far, with a ninth slated for the spring of 2017. They’ve refurbished over 300 structures, including single-family homes and duplexes, to date, taking advantage of low-income tax credits to help finance the work.

Ott says that keeping the historic fabric of the neighborhood intact is also something that the NHI strives for. “We do take time and research the whole block and try to make sure it [the house] fits in and the color scheme is appropriate and etcetera,” he says.

One of the project’s essential components is a workforce development program, in partnership with the Northcott Neighborhood House, a local nonprofit that works with low-income or out-of-work community members. Northcott keeps a list of re-entry candidates who have committed felonies and are trying to get back on their feet post-incarceration, and works with NHI to train interested individuals in the areas of carpentry, electrical, HVAC, or plumbing, as well as providing them with a core curriculum at Milwaukee Area Technical College. Ted Matkom, Wisconsin Market President at Gorman & Company, explains that at the end of their training, people in the program have an opportunity to pursue an apprenticeship in their field of choice.

1910 home before

A duplex built in 1910 gets restored in 2012.

1910 home after

“Our goal is to have them pass the competency test to get into an apprenticeship in those trades,” he says. “Once they pass that, with our credit from the training program, they can get an apprenticeship job with a local union.”

The north side of Milwaukee has seen a shift in recent years due to the new Century City project, a formerly vacant A.O. Smith car parts factory that the city is in the process of transforming into an office park, at an estimated cost of around $40 million. While the new development should be economically beneficial for the area in theory, the city doubled down on its commitment to keeping longtime residents from being pushed out of the neighborhood by rising housing costs by partnering with the Northside Housing Initiative to rehab homes in direct proximity to Century City. It’s part of a larger plan to keep the North Side affordable for those whose families, in some cases, have called it home for generations.

“You can really see that this was probably the quintessential working neighborhood back in the ‘20s and ‘30s and ‘40s, with all the industry that was happening in Milwaukee,” Ott says. “Unfortunately, through the years and economics and whatnot, they’ve just transitioned, and people weren’t able to keep them up.”

For residents like Willie Bounds, who has called Milwaukee home his whole life, the house he’s renting through the Northside Housing Initiative provides more than enough room for him and his daughter. “I’ve never had a house with a basement before,” he says, laughing. “I really love the extra space.” He pays $950 a month for a four-bedroom, four-bathroom house.

“It really gives a lot of pride to the neighborhood,” Ott says of the project’s benefits. “It’s one thing to give someone housing. If you can give someone good quality housing that they’re proud to bring people back to—it’s been very fulfilling to see, as we work through these nine phases, how we evolve, how the community’s kind of taken hold of it, been proud of it.”

Creative reuse turns half of former Catholic seminary in Madison into higher-end apartments

Written by Doug Erickson, Wisconsin State Journal

holy name seminary

Several years ago, leaders of the Madison Catholic Diocese realized they had a big challenge on their hands with the Bishop O’Connor Catholic Pastoral Center, a former seminary and home to the diocesan headquarters.

The majestic but aging building on the city’s Far West Side had become costly to maintain, with only about one-third of it being used on a regular basis.

The diocese hired a developer, and today, about half of the building has been converted to private-market apartments, adding millions of dollars to the city’s tax base. The $21 million project celebrated its grand opening in August, and all 53 apartments are now occupied, ahead of expectations.

“There’s more life to the building now — more people, more activity,” said Monsignor James Bartylla, the diocese’s second-ranking official, adding that the project keeps the “legacy property” in the diocese while preserving much of its spiritual and cultural identity.

The building at 702 S. High Point Road, a few blocks south of the Beltline, opened in 1964 as Holy Name Seminary, a high school for boys interested in possibly becoming priests. The seminary closed in 1995.

The building was rechristened in 1997 as the Bishop O’Connor Catholic Pastoral Center, honoring the founding bishop of the diocese. Its new name, Holy Name Heights, brings the site back full circle.

For apartment dwellers, it offers one of the more unusual residential settings in the city.

The diocesan headquarters remain, imbuing the building with a sense of the sacred. Tenants have 24-hour access to the building’s centerpiece, an on-site chapel with soaring stained glass windows and a 360-piece mosaic that rises three stories behind the altar. Mass is celebrated daily during the week.

For a more secular experience, there’s a full-size gym, newly restored to its retro glory. The 72-acre site offers 2.5 miles of walking paths, a running track, a baseball diamond and fields for football and soccer.

Other amenities include two interior courtyards with arched walkways, a theater room with a 100-inch screen, and a lounge with a balcony offering panoramic views of the city and state Capitol.

“It just seems so special here,” said tenant Christina Busse, 33, a stay-at-home mom who lives in a two-bedroom apartment with her husband, Phillip, 35, and their 21-month-old son, Cephas.

Broad appeal

While anyone can live at the site, diocesan officials thought the apartments might attract mostly empty nesters and Catholics. The appeal has been broader.

Busse, who is Lutheran, said she enjoys praying in the chapel and has found her neighbors to be a friendly bunch that ranges in age from young professionals to retirees. Many seem eager to make personal connections, she said.

“People seem to want relationships here,” she said.

The site appealed to the couple for its serenity, its religious aspects, and its amenities, especially the acres of outdoor space their son can explore as he grows. Their apartment is about a 10-minute drive from Epic Systems Corp., where Phillip Busse, 34, works in technical support services. Christina Busse estimated that nearly a dozen other tenants also work at the electronic medical records giant.

Among the couple’s neighbors are Paul and Kate Stauffacher, the kind of tenants diocesan officials knew would be especially drawn to the property. Retirees in their 70s, they are devout Catholics whose two sons graduated from the former seminary.

The connection for Paul Stauffacher goes even deeper. He taught and coached at the seminary early on, then went on to serve as its principal from 1978-87. His apartment is the seminary’s former weight and equipment room where he spent so much time as a coach.

“This just struck us when we saw it,” Stauffacher said. “There is a certain element of nostalgia, but it goes beyond that. We’re daily Mass attendees, so the chapel is very convenient. We love to get out and exercise on the grounds, and our grandchildren love the gym.”

For some, there’s the added appeal of occasionally bumping into Madison Bishop Robert Morlino, who recently moved into one of the new apartments. He had been living for more than a decade in the rectory at St. Patrick’s Catholic Church, three blocks off the Capitol Square.

‘Uncommon’ project

The diocese, which continues to own the property, hired Gorman & Co. to redevelop the site. The company, based just south of Madison, has stayed on as the on-site manager for the apartments.

Gorman & Co. specializes in adaptive reuses of landmark buildings and has had a long association with the diocese. It successfully nominated the former seminary as a historic landmark. The building is now listed on the National Register of Historic Places.

The designation allowed the company to access $5.8 million in historic tax credits — a critical piece of the financing — and also protects the building’s architectural legacy, said CEO Gary Gorman, a lifelong Catholic who grew up in the Madison area and has served as board president of Catholic Charities Madison. The project was “uncommon” and close to his heart, Gorman said.

“It did something really positive for a diocese that I’ve been a member of for 60 years,” he said. “I’m proud of both the physical and financial results, and in particular the fact that a number of people now get to call this beautiful building their home.”

The city has determined that 46.63 percent of the building is now taxable, with the rest remaining tax-exempt due to its religious use, said Scott West, a city commercial property appraiser. The assessed value of the taxable portion is currently set at $3.43 million by the city, but that number reflects only partial completion of the project, West said. The full assessment, out this April, likely will be around $5.1 million, he said.

The diocese’s 2016 tax bill for the site is $77,532. That figure is based on only the partial assessment.

The project’s total costs of $21 million are so much higher than the city assessed value because the total costs reflect work done on the entire site, not just the part turned into apartments, said Ted Matkom, president of the Wisconsin market for Gorman & Co. The project also addressed major maintenance issues on the aging building such as roofing and plumbing, he said.

One-bedroom apartments rent for $955 to $1,285 per month, while two-bedroom units go for $1,369 to $1,970. That’s probably a little less than top-of-the-line luxury units in Madison, but in the middle to upper range, said Rick Mason, property manager.

Bartylla said the project could help other dioceses think creatively about unused or vacant properties.

“I think we’ve shown that you don’t have to sell church property when it’s underutilized,” he said. “There might be an opportunity to continue ownership while finding something that works for both the diocese and the community.”

“It did something really positive for a diocese that I’ve been a member of for 60 years. I’m proud of both the physical and financial results, and in particular the fact that a number of people now get to call this beautiful building their home.” Gary Gorman, CEO of Gorman & Co., which redeveloped the former Bishop O’Connor Catholic Pastoral Center