Northside Neighborhood Initiative

Gorman teams up with Northcott to rebuild depressed Milwaukee Neighborhood

Click on the link below to read the article on Gorman’s Northside Neighborhoods as published on the Wheda Transform Milwaukee website:

Gorman teams up with Northcott to rebuild depressed Milwaukee neighborhood, Wheda Transform Milwaukee website, 2-2015

Gorman & Company Begins 7th Phase of Milwaukee Northside Housing Initiative

Tax Credit Advisor, January 2015

In early October Gorman & Company broke ground in Milwaukee on the 7th phase of its nationally-acclaimed scattered site, single family home redevelopment.

Gorman & Company’s Northside Housing Initiative is a partnership with the City of Milwaukee and the Wisconsin Housing and Economic Development Authority (WHEDA). Its goal is to resuscitate challenged neighborhoods that have been devastated by the foreclosure crisis. Foreclosed, boarded-up properties are rehabbed into high-quality rental housing. In addition, newly constructed homes are built on vacant lots that residents consider the “broken teeth” of their neighborhood.

This innovated housing initiative also focuses on training  chronically unemployed people from the affected zip codes. The City of Milwaukee offers critical support for the project by assembling the individual properties and contributing them to the initiative.

From Foreclosures, Affordable Housing

Affordable Housing Finance, 2014 LIHTC Yearbook

A Wisconsin developer’s large-scale initiative in neighborhoods on Milwaukee’s North Side is helping reverse the damage of the Great Recession and foreclosure crisis.  By purchasing vacant lots and foreclosed homes from the city, Gorman & Co. has aided in neighborhood revitalization, homeownership opportunities, and job creation.

Over the course of seven phases, the developer built or rehabbed 282 single-family homes or duplexes affordable to residents earning between 30 percent and 60 percent of the area median income.

“All of those homes that we redeveloped within the neighborhoods are in a high demand because people in this day and age really find it hard to own a home but want the space of a home to raise a family,” says Ted Matkom, Wisconsin market president for Gorman & Co.

Gorman refurbished the homes, many of which date back to the early 1900s, with modern amenities, appliances and security systems.  “You literally get a new home, in a sense, when you move in,” Matkom says.

After the 15-year compliance period, residents living within the single-family homes will have the opportunity to purchase them for the remaining debt, which is projected to be approximately $35,000.

The acquisition and rehabilitation work also has provided a needed jobs boost in the city.  Gorman partnered with nonprofit Northcott Neighborhood House to create a training program for chronically unemployed local residents with challenged backgrounds.  Through the program, men and women were trained to do construction trade work and demolition work.

Low-income housing tax credits (LIHTCs) were vital to the developer’s work.  The $56.6 million initiative was financed with $44.1 million in LIHTC equity.  Additional financing included Neighborhood Stabilization Program funds from the city of Milwaukee.

“The LIHTC program really makes the housing sustainable for years to come,” says Matkom.  “And it really revitalizes the housing stock with minimal subsidy.”

Developer Helps to Transform Milwaukee Neighborhoods

By Christine Serlin, Affordable Housing Finance

A Wisconsin developer’s large-scale initiative in neighborhoods on Milwaukee’s North Side is helping to reverse the damage of the Great Recession and foreclosure crisis.

By purchasing vacant lots and foreclosed homes from the city, Gorman & Co.’s work is resulting in neighborhood revitalization, homeownership opportunities, and job creation.

Over the course of seven phases, the developer built or rehabbed 282 single-family homes or duplexes affordable to residents earning between 30 percent and 60 percent of the area median income.

“All of those homes that we redeveloped within the neighborhoods are in high demand because people in this day and age really find it hard to own a home but want the space of a home to raise a family,” says Ted Matkom, Wisconsin market president for Gorman & Co.

Gorman refurbished the homes, many of which date back to the early 1900s, with modern amenities, appliances, and security systems. “You literally get a new home in a sense when you move in,” Matkom says.

After the 15-year compliance period, residents living within the single-family homes will have the opportunity to purchase those homes for the remaining debt, which is projected to be approximately $35,000.

Residents must sign a contract of care, which promises that they will maintain the home with ordinary upkeep, such as mowing the grass, shoveling snow from the walkways, and doing minor repairs. This helps to instill homeownership responsibilities in the residents and helps to reduce Gorman’s operating costs since it’s a scattered-site project over a three-mile diameter, says Matkom.

The acquisition and rehabilitation work also has provided a needed jobs boost in the city. Gorman partnered with nonprofit Northcott Neighborhood House to create a training program for chronically unemployed local residents with challenged backgrounds. Men and women were trained to do construction trade work and demolition work.

Low-income housing tax credits (LIHTCs) were vital to the developer’s work. The $56.6 million seven-phase initiative was financed with $44.1 million in LIHTC equity provided by Alliant Capital, Boston Capital, and National Equity Fund. Additional financing included Neighborhood Stabilization Program funds from the city of Milwaukee.

“The LIHTC program really makes the housing sustainable for years to come,” says Matkom. “And it really revitalizes the housing stock with minimal subsidy.”

Foundation for the Future

By: Affordable Housing News, Summer 2014

Gorman & Company, a well-established development firm with an extensive portfolio in the Milwaukee area, specializes in providing quality affordable housing to communities that need it most. The company is now using its expertise with the Washington Park Homeowners Initiative (WPHI).

The initiative is geared toward a revitalization effort in Milwaukee’s north side neighborhoods, which were particularly affected by the recent economic downturn. WPHI represents the sixth phase of a larger project, and Gorman & Company plans to continue with at least three more development phases to provide more homeownership opportunities in the area.
“The Washington Park Homeowners Initiative is actually the sixth phase of a much larger initiative that we’re doing in the north side of Milwaukee, which has been ravaged by the foreclosure crises,” says Ted Matkom, Wisconsin Market President for Gorman& Company. “it’s really a product that the neighborhoods are looking for right now.”

ADDRESSING A NEED
Milwaukee’s north side neighborhoods rely heavily on the manufacturing sector for jobs, and in recent years have seen a significant number of these jobs disappear. The housing crises in 2008-2009 exacerbated this problem.

“Many jobs fled Milwaukee to go overseas, and combined with the foreclosure crises and the recession, these north side neighborhoods went into a tailspin that resulted in blighted, vacant homes. That’s why the city has so many tax-foreclosed homes,” Matkom says. “We are purchasing tax-foreclosed homes for $1 each and renovating them with tax credits to stabilize the neighborhood and put those properties back on the tax roll.”

With these initiatives, Gorman & Company is providing options to residents on the city’s north side. The firm is focusing on creating safe, stable neighborhoods that, over the course of numerous efforts, will help to make it an overall more desirable place to live.

According to Matkom, demand for these types of residential options is high on the north side.
“It’s a lower-income neighborhood that really needed an update to the housing stock,” Matkom says. “What’s amazing about it, and the reason why we have so many phases, is the demand. We’ve got waiting lists for single-family homes of 50 people. We would have more, but they get stale, so we keep it at 50. We keep trying to make it a better situation with every phase.”

DEVELOPMENT INITIATIVES
The WPHI effort also aims to provide opportunities to help those in need get the skills and experience they need to find jobs. Gorman & Company has partnered with nonprofit organizations to accomplish these goals.

“We’ve done workforce development initiatives with Northcott Neighborhood House, which is using federal, state and local funds to finance the development,” Matkom says. “We assist the chronically homeless and unemployed, in addition to those coming out of the criminal justice system, to cross-train in several trades. Once they graduated from that soft skills and hard skills course, they are put onto a shift that works on siding and demolition for our projects, which are real-time projects to help build a resume. Then they can go off and get hired by the workforce and third-party contractors.”

Engaging in these efforts creates challenges for Gorman & Company, as the firm must work with a significant number of newly trained workers while still completing its developments on time. According to Matkom, however, it’s well worth the effort.

“We create probably 28 family-supporting jobs each phase through that program, and they get hired off to third-party contractors at a regular pace,’ he says. “It’s a challenge for us to keep the quality of the workmanship up, but it’s a good challenge because it’s actually placing people in jobs as a result of the training.”

FOUNDATION FOR THE FUTURE
Part of Gorman & Company’s motivation for pursuing these extensive revitalization efforts is their overall alignment with the company’s goals. It specializes in working through tax credit initiatives to improve areas that may need additional help. Before beginning efforts in any neighborhood, the firm surveys the community to gain insights about the needs and challenges present.

“Typically, the most challenging projects these communities foresee are the ones that are in our wheelhouse, which are eliminating blight or revitalizing an area that’s blighted,” Matkom says. “This was kind of the prefect project for us because it did have all of those components, which was workforce development and meeting a need in a community to stabilize these north side neighborhoods.”

Moving ahead, Matkom hopes Gorman & Company’s methods for WPHI and beyond will be recognized and replicated elsewhere. Because the firm operates on a housing and economic development model, the company’s leadership is eager to see its long-term effects not only in Milwaukee but also in other adversely affected cities throughout the Midwest.

“I think this model we’ve created in Milwaukee is a true model that can be replicated in other Midwest communities that have lost a lot of manufacturing jobs and were hit by the foreclosure crisis,” Matkom says. “Many Midwest cities suffering from a post-manufacturing letdown from the recession could use this model to rebuild some challenging neighborhoods and make them great workforce housing neighborhoods like they were in the 1950’s and ‘60’s.”

Developer wants to rehab 120 foreclosed Milwaukee homes

By Sean Ryan, The Business Journal, January 15, 2014

Gorman & Co. Inc. wants to buy 120 tax-foreclosed homes from the city of Milwaukee and rehab them as affordable housing for new renters, and eventually owners, for $22.5 million.

The projects center on three Milwaukee neighborhoods where city-owned foreclosed houses are concentrated, including areas around the former Tower Automotive plant, said Ted Matkom, Wisconsin market president for Gorman, based in Oregon, Wis.

The developer since 2008 has fixed and leased 200 houses in Milwaukee under this initiative, Matkom said.

The project funding requires state affordable housing tax credits that Gorman will apply for later this month. Gorman will file three applications, Matkom said, one each for houses in the Franklin Heights, Sherman Park and Tower Automotive neighborhoods.

Under the proposal, Gorman would buy foreclosed houses from Milwaukee for between $1 and $5,000, depending on the condition of the building, Matkom said. Gorman would fix them up and rent them to low-income residents for 15 years. After 15 years pass, the current occupant can buy the building for $30,000, paying off the remaining debt on the rehab projects, he said.

“A lot of multi-family buildings kind of get tired as they approach the 15th year,” Matkom said. “This product actually gets more attractive as the 15th year approaches.”

Milwaukee’s Zoning, Neighborhoods and Development Committee on Tuesday unanimously endorsed selling the houses to Gorman.

Ted Matkom of developer Gorman & Co.

Gorman, Northcott partner to rebuild depressed Milwaukee neighborhoods

Tony Kearney walks into a classroom in the Northcott Neighborhood House on the north side of Milwaukee. Every seat is filled by 24 African American men learning construction. Kearney, the Project Director for the 50-year-old nonprofit organization, brings good news.

All of the students have passed the state lead abatement worker test. The class erupts into applause. Kearney is all smiles.

Northcott has partnered with Oregon, Wisconsin based developer Gorman & Company on the landmark housing restoration effort called the Northside Housing Initiative. The project featured the construction of 40 rent-to-own, single family homes on formerly vacant lots and the rehabilitation of a series of existing duplexes to provide an added 40 affordable rental units in the Metcalfe Park and North Division neighborhoods of Milwaukee. The central city community has been littered with foreclosures and blighted land and properties.

WHEDA awarded $951,620 in Low Income Housing Tax Credits to Gorman in 2010 for the initiative and just over $1.5 million in credits in 2012.  Gorman’s Wisconsin Market President Ted Matkom now depends greatly on the Northcott students for the second phase of the project, the acquisition and rehabilitation of 105 single family homes into affordable rental units.

“Northcott is literally training individuals in building homes, in siding, roofing, and carpentry,” said Matkom. “The least you can do is provide opportunity for a local entity that hires local residents to work on these projects. It’s a great idea.”

Christopher Edwards, 41, of Milwaukee attends a Northcott class wearing a shirt and tie under his overalls. Edwards’ expertise is remodeling homes. But like most of the students, he’s unemployed.

“I have an impeccable resume,” said Edwards.  “But I can’t find work.  I’m here to make myself more marketable, more employable.  I don’t care if it’s only for $8 an hour.”

Northcott is a refuge for another student, 45 year-old Elliott Urquhart of Milwaukee, an unemployed welder.

“I’m surrounded by good people who are sincerely concerned,” said Urquhart. “My goal is to get a respectable wage, own a home, and pass it on to my son.”

Both Edwards and Urquhart dream of being contractors someday, but have even greater motivation.

“I will unboard every boarded up house in this city,” Edwards proclaimed.  “That’s my aspiration.”

“We’re tired of seeing all those green boards,” Urquhart concurred.

Not everyone shares the same ambition.  Northcott’s Kearney says students who swear they aren’t afraid of heights arrive at a worksite and suddenly can’t get on a ladder.  For others weather can be too hot or cold. And half of the students bring baggage in the form of felony convictions.

“We have to take a chance on them,” said Kearney.  “If you’re going to revitalize the community, you have to hire from within those who are unemployed. A convicted felon is less likely to recidivate if he has a job.”

Persistence can pay off substantially.  Kearney says one former student who previously had no income earned $17,898 the past year and will probably make $25,000 this year.

That type of turnaround is imperative in a community crippled by an unemployment rate among African American males of 50 percent.

The biggest problem with the program isn’t a problem per se.  Gorman loses workers that graduate from the program to third party contractors.

http://milwaukeecourieronline.com/index.php/2013/07/04/gorman-northcott-partner-to-rebuild-depressed-milwaukee-neighborhoods/

- See more at: http://milwaukeecourieronline.com/index.php/2013/07/04/gorman-northcott-partner-to-rebuild-depressed-milwaukee-neighborhoods/#sthash.nvY5kzg0.dpuf