Tag Archives: riverview-towers

$11 million in renovations at Riverview Towers Complete

By: Bob Dohr, Wausau Daily Herald, June 28, 2014

WAUSAU – The Riverview Towers apartment building on East Grand Avenue in Wausau is looking a whole lot newer.
Eleven million dollars newer.

A recently completed renovation project at the 10-story building spanned 20 months and was accomplished through a partnership between Oregon, Wis.-based Gorman & Co. and the Wausau Community Development Authority, which manages the building.

CDA director Ann Werth said the Authority contributed $2.5 million to the project, a Federal Home Loan Bank grant accounted for $750,000 and the remaining funds came from tax credits obtained through the Wisconsin Housing and Economic Development Authority.

“It was completely gutted and it was done by keeping all the tenants in place, as well,” Werth said.
The new-look apartments feature high-grade, planked vinyl flooring, maple cabinets and an open floor plan. An L-shaped kitchen replaces the old galley kitchen.

Achieving that modern, spacious feel within the confines of the budget — and the confines of the small apartments — was the biggest challenge, said Ted Matkom, Wisconsin market president for Gorman & Co.

“The units are about 500 square feet and we really wanted an open kitchen, an open concept that was an updated 21st century-type of design within something that was built in 1969,” Matkom said.

Mission accomplished, according to resident Dale Sutton, 75.

“Even though it’s the same square footage, it makes the apartment seem larger, more open,” Sutton said.
All the kitchens are now wheelchair-accessible, too.

“They’re all designed so someone with a wheelchair will have a turning radius, where before you couldn’t even get a wheelchair in the galley kitchen,” Matkom said.

Werth said they made sure 16 units were vacant prior to the start of the work. The work was done floor by floor, with tenants moving temporarily into the vacant units while their floor was being worked on.

“Every 45 days we did another floor,” Werth said.

Sutton, who has lived in the building for 10 years, said the inconvenience was worth it.

“It’s beautiful, I love it,” Sutton said. “It was hassle while they were doing it that two years. It was noisy and dusty, but the end product turned out beautiful.”

Riverview Towers is open to individuals or couples who meet income requirements and who are at least 55 years of age or disabled.

Werth says there are new finishings throughout, air conditioning in each of the 149 units, a new roof, new boilers, and new plumbing and heating systems.

The building’s hallways and common areas have been dressed up with artwork, a key piece of the improvement puzzle, Matkom said.

“The work that we did in the corridors and common areas to make this an inviting and not institutional living space is really on the top of the list as far as what public housing should look like,” Matkom said. “We really made this an inviting place to live.”

Werth said the upgrades will improve day-to-day life for residents.

“Number one, we did every energy efficiency we could possibly do, including sealing up any leaks, so it’s going to make the tenants warmer in the winter and more comfortable in the summertime, especially by adding air conditioning to the units,” Werth said. “It also supplies a number of additional services — computer labs, an indoor fitness facility, outdoor fitness equipment — all those add to quality of life, as well.”

The AHF 50: Top 50 Affordable Housing Developers, #29 Gorman & Company, Inc.

By Christine Serlin, Affordable Housing Finance, April/May 2014

#29, Gorman & Company, Inc.

Gorman and Co., based in Oregon, Wis., isn’t just a housing developer.  The company considers itself a community developer, too, building in revitalizing areas in Arizona, Florida, Illinois, and its home state.  One of Gorman’s major accomplishments for 2013 was finding new sources of financing for that work.

“We have to be prepared if there are real jolts to traditional funding, like low-income housing tax credits (LIHTCs) or historic tax credits,” says COO Tom Capp.  “That’s a bit of the motivation why we’re looking at new sources.”

The firm has had recent success with the government’s EB-5 program, which offers foreign citizens a Green Card if they’ll invest $1 million in an American project that creates or preserves jobs primarily in community development areas.

Gorman is redeveloping the Pabst Brewery site in Milwaukee with three projects.  The first was Blue Ribbon Lofts, 100 affordable units financed with LIHTCs and historic tax credits.  The second was a historic hotel and restaurant, where the company utilized the EB-5 investments.  The third will be market-rate workforce housing with equity from a Chinese developer.

“These financial sources are fueling projects like workforce housing and elements communities want to see us executing in the revitalizing areas,” says Capp.  “These sources are touching housing, but not intermingling with the LIHTC.”

The firm has also received approval from HUD’s Rental Assistance Demonstration program for a 300-unit public housing development in Phoenix.

Gorman & Company, Inc. Named in the Top 50 Affordable Housing Developers of 2013

April 10, 2014

Affordable Housing Finance named Gorman & Company, Inc. in the top 50 affordable housing developers for 2013.

Former real estate lawyer Gary Gorman overcomes early challenges to build successful business

By Tom Daykin, Journal Sentinel, September 30, 2013

Gary Gorman was a real estate attorney when he decided he’d rather be a developer, instead of the guy who gives developers legal advice.

Gorman & Co. was launched in 1984. Within a few years the firm was focusing on apartment buildings, aimed at lower income renters, partly financed with federal affordable housing tax credits, along with projects that use historic preservation tax credits. Today, located in the Dane County community of Oregon, the firm has 230 employees, operates dozens of properties in Wisconsin, Illinois, Florida and Arizona, and annually develops apartment buildings and other projects costing around $75 million.

The firm’s Milwaukee-area developments include the new Brew House Inn & Suites, a hotel created at the former Pabst brew house, along with Blue Ribbon Lofts, apartments developed within the brewery’s former keg house. The company also plans for another apartment development at the Pabst complex, now known as The Brewery.

Gorman recently met at the Brew House Inn to talk about his early challenges as a developer — including a partner who was a cocaine addict — how the firm grew, and its new foray into the hotel sector. Here’s an edited transcript of that interview.

Q.How did you become a developer?

A. When I got out of law school (in 1980) I was hired by a firm and promoted by that law firm as somebody who knew something about real estate syndication, which is just a fancy term for putting together a group of investors to do deals. I represented developers and syndicators for four years.

Then they offered me a partnership. And I thought, if I become a partner, then I’m going to stay. And it really wasn’t what I wanted to do. I was more intrigued by the business side. So, June of ’84, I left the law firm. I teamed up with two other guys (including a marketing expert). One guy that was older, more experienced and allegedly had more money.

Q.Did it turn out he didn’t have any money?

A. Well, you’re guessing the rest of the story. Our basic strategy was that we were going to put existing properties under contract, we were going to raise the equity capital by selling limited partnership shares, buy the properties, have somebody else manage them, and then we sell them after five years and take a piece of the profits. That was the idea.

So, within about six months of leaving the law firm, the marketing guy and I started seeing these letters coming in from collection agencies, and dunning letters from banks and other creditors to this older guy. The bottom line is he had this white powder problem that I didn’t know about. Should have done better due diligence. His frequent trips to Jamaica were not just to lay in the sun.

Q.What happened?

A. The marketing guy and I left him and formed our own little shop. And we did one deal in 1985 called Seminary Park Apartments, in Evansville, Wis. It was a small deal, 24 units. It was a historic rehab of abandoned school buildings that had previously been a private school for boys. So it had been empty for a long time.

It was immensely complicated for a small deal, and we probably made about $1.50 an hour. But that created a track record. At the end of that deal, the marketing guy said, “I can’t live like this any more. I never know if we’re going to have the deal, not have the deal. I don’t know if I’m going to have a paycheck.” (So the partner left the firm.)

Q.How did it feel to be on your own?

A. It felt a little lonely. Then tax reform started heating up and it eventually passed in 1986. That changed the tax code completely, and it eliminated a lot of the benefits of investing in real estate. But it created a new tax credit, the affordable housing tax credit. So I thought maybe I could work with that.

Q.Did you just immediately think there’s just unlimited opportunity there?

A. No, God no. I thought: Would this ever work? And who would ever invest seeking this credit? And should I go back and beg my senior partner at the law firm to take me back? All those thoughts were going through my head. And there were times when I literally ran out of money.

I worked with a law firm and an accounting firm to put together four private placements in 1987 that were raising capital for (tax credit) deals that another builder built because I didn’t have the capacity to build anything. It was a lot of work.

I got a call one day (in 1987 from Boston Financial). They had a fund that had raised money to invest in these tax credits, and would I be interested in having that fund invest as the equity investor?

Q.And you said, “Would I?”

A. I kind of held the phone away like, is this really happening? Absolutely, I wanted to.

Q.With the advent of the fund, I assume your life got a lot easier in terms of financing.

A. It did. Trying to find investors that put in $5,000 apiece a year was tough. The first institutional deal was a big break-through.

Q.At what point were you starting to do multiple projects a year?

A. I think we did two a year in ’88 and ’89. (As the firm grew, it added in-house property management and construction divisions. In 1995, it hired Tom Capp, a former Fitchburg mayor who is now Gorman & Co.’s chief operating officer.)

Q.Was adding Tom a turning point?

A. It really was. It added a level of political sophistication that, frankly, I didn’t have. He really knows how to work with city planners, mayors, elected officials, plan commissions. He knew that mentality. He had a greater level of patience with the political process.

Then we started to grow, did more projects. All of the equity was from institutional investors. Then we thought we would internalize the architectural function. We did that in ’99. At that point we sort of had the bones of an integrated development firm. That’s where we are today.

Q.What percentage of your business comes from affordable housing developments?

A. Probably 85%.

Q.How did you first get involved in doing the Brew House Inn & Suites?

A. (During a presentation to some Chinese government officials who were visiting Madison, Gorman was impressed with the interpreter, University of Wisconsin-Madison law student Ying Chan. Gorman hired him as an intern.) I was paying him, but I really didn’t know what he was doing. He was going to seminars here and there, and then he left when he graduated from law school.

He called me about six months later and said that he had been successful raising money through this EB-5 program (in which foreign citizens receive green cards in return for job-creating investments in the United States) for an immigration attorney out of the state of Washington who had never done a development deal before. I said, Ying, if you can raise money for someone who has never done anything before in the development area, it ought to be easy for you to raise money for us.

We had done Blue Ribbon Lofts, and we thought, where can we find another historic (preservation) deal that was of some size? Talking to the Zilber folks (owners of the Pabst complex), they pointed us to this building. The reason it’s a hotel rather than an apartment building is that to attract EB-5 capital you have to create jobs. A hotel and (restaurant) produce a lot more jobs than an apartment building.

Q.You’ve never done a hotel before, right?

A. No, but we have a regional manager, Laura Narduzzi, who’s got 25 years experience (in the hotel industry). I completely defer to her judgment on designing the hotel, running the hotel. I’ve stayed in a thousand of them but I don’t know anything about running them. I’m learning a little bit now, though.

Q.What have you learned?

A. The staffing level is much higher than an apartment building. The service level is huge. You have to have skilled, well-paid people on site, all the time.

Q.Are you making money?

A. We’re doing OK. Is it belching cash? No, not in the early phases. But we’re doing a lot better than our projections showed.

Q.Are you going to do other hotel investments?

A. We have a deal in Kenosha, called Heritage House. It’s a historic building. We’re about to convert that into a boutique historic hotel. I just made a presentation to the mayor of Rockford, Ill., and his staff on a project there that would be a historic hotel combined with a conference center. I made a presentation in Butte, Mont., with a concept of a similar combination of a historic hotel and a conference center. It’s opened up another area for us.

Q.But you’re going to continue to primarily be an apartment developer, right?

A. Yeah, that’s our core competency.