City Market Lofts

Thursday, August 4th, 2011

Challenge

In their heyday, the three historic buildings in the Lower Main Street area of Lynchburg, Virginia, bustled with activity, but before the 1990s had ended, they were vacant. The last tenant had left after a sprinkler system malfunctioned one weekend and flooded five floors of inventory. So as the new century opened the buildings stood closed, empty reminders of downtown Lynchburg’s more prosperous past.

By then, city officials and business leaders had already focused their attention on turning things around. They were signs of success in the city center, and hopes were high for continued revival. The developers knew that a strong residential base was key to a continued downtown renewal, and the historic buildings at 1225-1307 Main St. were ripe with possibility. The challenge was to make the financials work.

Because of the poor condition of rental stock in Lynchburg, market rates were too low to support the rehabilitation envisioned. It took a triple layer deal including tax credits, public funds and a long-term lease, to make the numbers work. Even then, the developer took a large deferred fee, convinced that the successful project would lift rates in the rental market and be a catalyst for other deals.

Public support was essential, and it took time for the developer to convince some elected officials that market-rate lofts—not high-end condos—was the best approach. It took more than three years, with multiple players and multiple interests, to seal the deal. But in the end, supported by the city manager, the developer’s vision prevailed.

In addition to perseverance and vision, keys to making the project possible were the city’s willingness to contribute to the financing package; the opportunity for a long-term lease to meet Central Virginia Criminal Justice Academy’s need for year-round dormitory space; and Landmark’s ability to persuade a lender to be the first to use New Market Tax Credits.

Financing

City Market Lofts was financed through a combination of public and private sources: BB&T provided $2.175 million first mortgage and $2.5 million second mortgage through an EDGE (Economic Development and Growth Enhancement) loan through the Atlanta Federal Home Loan Bank; the sale of New Market Tax Credits and state and federal Historic Property Tax Credits through Wachovia using an A-B leveraged loan structure provided $6.06 million in equity; and local governments provided $1.4 million in support through a $950,000 no-interest city loan, $365,000 for the property and $120,000 for a long-term lease with the Central Virginia Criminal Justice Academy.

Results

Totaling about 155,000 square feet, the three buildings comprising City Market Lofts are situated on 1.8 acres amid quaint shops, restaurants, entertainment venues and a few blocks from Riverfront Festival Park, a restored public area on the historic James River.

The James T. Davis building at 1225 Main St. was designated for ground-floor retail and upstairs apartments. The 44,100-square-foot building also houses the property manager’s office. The interior design took into account preliminary plans that city officials have for publicly funded improvements to the adjacent open-air market from which the development takes its name. The building houses Groovy Furniture, a company owned, ironically enough, by the family that owned the office supply company that had been flooded out years earlier, and the Junior League.

Guiding the design for the old Bowman & Moore Leaf Tobacco Factory at 1301 Main St. was the goal of creating inviting, loft-style apartments above ground-floor commercial space. As with other adaptive reuse projects, this effort required the creation of multiple residential floor plans to accommodate the nooks and crannies that give the building its historic character.

The third building, at 1307 Main St., was originally a Piggly Wiggly store, and it was Lynchburg’s first self-service grocery when it opened in the 1950s. This building shares a common wall with the middle building, and together they account for more than 111,000 square feet. Designing the new interior space for the Piggly Wiggly building allowed for additional creative expression beyond the carving out of loft apartments. The wide open, split-level space off the main entrance that spans the building is now under discussion to become a salon. The open stairway to the basement level remains. The sub-basement was designed as year-round dormitory space for law enforcement officers who attend in-service training at the adjacent Central Virginia Criminal Justice Academy. The top floor features penthouse lofts, and on the rooftop are hot tubs for residents and spectacular views of downtown and its surroundings.

Nantucket Lofts

Thursday, August 4th, 2011

Overview

Nantucket Lofts is a tax-credit success story in a small North Carolina city. Yes, it provides affordable housing for low- and very-low-income families, but it provides far more. Nantucket Lofts provides a community for like-minded families who take pride in their homes, who support one another, and who share a common belief that things can be better for themselves and for their children.

What it doesn’t provide is “decent” housing. No, Nantucket Lofts was created to provide something special that can’t be found anywhere else in Kinston or communities nearby—loft living in airy, spacious, high-ceilinged units with exposed brick, refinished original hardwood floors and steel windows, new appliances, individual heating and air, Internet access and the innate character of a renovated building more than 100 years old.

Many people who think the units are high-end lofts are turned away from living there for one simple reason: They make too much money to live there.

People beyond Kinston have taken notice. In 2006, the Affordable Housing Tax-Credit Coalition named Nantucket Lofts winner of the Charles L. Edson Award for the best affordable housing project in a rural area.

The Facts

Nantucket Lofts is affordable housing created from the renovation of a tobacco warehouse turned shirt factory in downtown Kinston, North Carolina, population about 23,000. The two-story, 70,000 square-foot building was converted into 28 one- and two-bedroom lofts plus 8,000 square feet of commercial space at a development cost of $5.1 million. The architects were Dunn & Dalton Architects in Kinston. The funding sources were $2.3 million in equity from 9% LIHTCs provided by Community Affordable Housing Equity Corp. (CAHEC); $1.2 million in equity from federal and state historic tax credits provided by CAHEC; $1.1 million in state LIHTC equity through a 30-year deferred no-interest loan from the North Carolina Housing Finance Agency; and a $420,000 Federal Home Loan Bank (FHLB) of Atlanta Affordable Housing Program (AHP) subsidized loan at 2% with 20-year term and 20-year amortization, and $59,285 FHLB of Atlanta AHP grant, both sponsored by The Mid Atlantic Foundation and provided through Bank of America. Seventeen lofts are set aside for households earning no more than 50% of the Area Median Income (AMI); 11 are for households earning no more than 60% of AMI. Three units are wheelchair accessible.

Such innovation can’t exist in a vacuum. It is built around the willingness of the North Carolina Housing Finance Agency to support initiatives that enhance community development and downtown renewal; the developer’s passion for historic preservation and adaptive reuse; the community’s need for affordable housing; and the city government’s faith in a project that would show non-believers and skeptics just how good “affordable” housing could be.

Development

The development:

  • Preserves an historic “white elephant” structure that loomed as an eyesore in the heart of a rural downtown that was trying hard to revive itself.
  • Created tenant services including a residents’ association, fitness center, health screenings, computer access, and children’s play and study areas.
  • Encourages residents to take greater control of their future, through adult scholarships as well as tutoring and educational opportunities for children.
  • Incorporated unique design features including multi-purpose rooms, outdoor courtyard, indoor playground and street-level commercial space.
  • Enjoys widespread community support and volunteer participation, winning over skeptics and paving the way for additional developments in the future.

Success

From the outside, Nantucket Lofts looks very much like the venerable piece of history that it is: an imposing brick structure that harkens back to an era when tobacco was king. From the inside, however, Nantucket looks very much alive, a community bustling with activity led by a residents association that takes its role very seriously.

Lynn Street Lofts

Friday, August 5th, 2011

Lynn Street Lofts is a mixed-use development that brought 37 loft-style apartments for working families and street-level commercial space to the Tobacco Warehouse Historic District of Danville, Virginia.

The $6.2 million renovation is part of Danville’s economic rebound, providing top-notch housing for the city’s growing workforce while preserving the historic integrity of its past. The project is a compelling example of how an old warehouse can be converted into a new residential development.

Lynn Street Lofts feature hardwood floors, high ceilings and exposed brick and ductwork meant to preserve the building’s historic character. Lynn Street Lofts include a community room; technical learning center with computer and online access; and laundry.