Gary Gorman never intended to start a company focused on historic preservation development.
During law school, Gorman got a job at the old state Commissioner of Securities office reviewing offering memoranda for real estate deals.
So when he joined a law firm after graduating, he ended up representing developers and syndicators who were raising capital from investors to do their deals.
“After four years I was offered a partnership in the firm and I thought if I became a partner I would stay,” he said. “And I was always more interested in the deal side than the legal side.”
So he left the firm and teamed up with a couple of guys to start his company in June 1984, which was “terrible” timing, he said, because that’s when the first trial balloons of the coming major tax reform were floated, paralyzing many investors.
His first two projects were small historic renovations in Evansville, utilizing a complex mix of financing. After the Tax Reform Act of 1986, which created the affordable housing tax credit in Section 42, Gorman put together a series of four private placements to capitalize the equity financing for some of the first projects utilizing the affordable housing tax credit in Wisconsin.
Gorman, whose chief operating officer is former Fitchburg Mayor Tom Capp, likes historic renovation projects because they are expensive and difficult, which cuts down on the competition.
“We have done some traditional development work, but our strategy is to be in businesses with significant barriers to entry,” he said. “We go into a community and ask them what they want done. We almost always get pointed to challenged areas or challenged buildings. And then we work through complex financial structures to make them feasible.”
While not historic rehab, Gorman & Co.’s most notable local project is the redevelopment of the former SuperSaver grocery store on Verona Road into Avalon Madison Village, a $14.7 million project with 70 percent affordable housing.
Gorman & Co. just started a notable historic project in Beloit: Redeveloping Fairbanks Flats, built nearly a century ago as housing for the first black employees of engine maker Fairbanks Morse, into rent-to-own units.
Projects like those provide more than money to the company, Gorman said.
“Historic rehabs mean a lot to people,” he said. “At the groundbreaking in Beloit people were crying because they were happy those buildings were going to be preserved.”