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Behavioral Health Care Center to Make New Home in Historic New Orleans Auto Dealership
A historic 41,000-square-foot car dealership in New Orleans that survived a fire and a hurricane is transforming into a new behavioral health care center.
Funded in part by equity from federal and state historic tax credits (HTCs) and the federal new markets tax credit (NMTC), the federally qualified health center and addiction treatment clinic will be run by the nonprofit Odyssey House Louisiana. Once renovations are complete in early 2019, the new facility will have 100 beds for short-term addiction treatment, 50 beds for patients detoxing, 10 medical and behavioral health exam rooms, rooftop recreation space and a commercial kitchen that will provide meals and workforce training. About 4,000 square feet of the ground floor space will be leased to commercial tenants.
Securing Odyssey House as the anchor tenant gave the long-vacant Bohn Motor building a new purpose.
“This is a building that every New Orleanian has driven by since Hurricane Katrina and wondered, ‘What are they going to do with that building?’ ” said Kevin Krejci, chief information officer for developer Gulf Coast Housing Partnership (GCHP).
Image: Courtesy of Claire Bangser, Roots and Wings Creative
Renovation of the historic Bohn Motor Company Building in New Orleans into a behavioral health care center, clinic and retail space is made possible through public and private partnerships at the local, state and federal levels.
The Bohn Motor Company Automobile Dealership was built in 1925. The original two-story Italian Renaissance building housed two showrooms and office space on the ground floor, with auto service space on the second floor. The building’s designer was architect Emile Weil, whose works included other New Orleans icons, such as the Tivoli and Saenger Theaters. The Bohn Motor building eventually became vacant and a fire in 2002 destroyed the roof, leaving the building exposed to the elements.
The Rhodes family, operators of a historic New Orleans funeral home since 1884, bought the Bohn Motor building in 2005 with the intention of expanding their business to the former car dealership. However, the timing was unfortunate.
“What’s interesting about this project is that we bought this building 10 days before Hurricane Katrina in 2005 with the intent of redeveloping it for our main business,” said Joan Rhodes, one of the five third-generation siblings running the Rhodes family business. “[After Katrina,] the whole script changed because everything was devastated.”
Hurricane Katrina damaged both the Bohn Motor building and the neighboring Rhodes funeral home in the former Tivoli Theater, which the Rhodes business had occupied since 1969. The Rhodes family prioritized rebuilding the funeral home over the next five years and the Bohn Motor redevelopment took a back seat. When the Rhodes family eventually decided to redevelop the Bohn building, they sought a viable anchor tenant to lease the majority of the space and found a tenant in Odyssey House Louisiana.
“We have been aggressively looking for help to expand treatment services for the opioid epidemic,” said Ed Carlson, chief executive officer of Odyssey House. “We partnered with GCHP and the Rhodes family to do this project and it worked for all of us. We didn’t have to come up with the money to build a new state-of-the-art facility and they needed a tenant who had the financial ability to pay rent.”
Odyssey House’s current campus, located in New Orleans’ Treme-Lafitte neighborhood on Tonti Street, includes one building constructed in 1866 and another from 1895. “They’re beautiful old buildings that are a maintenance nightmare,” said Carlson. Odyssey House will move to the Bohn Motor building in early 2019, while repairs are made to its current facilities. Once renovation work is complete, Odyssey House will move some of its services to Tonti Street while maintaining other services at the Bohn Motor building.
“Between the historical significance of the building to the Broad Street corridor and the needs of Odyssey House Louisiana and the Rhodes, this was really a perfect marriage for everyone,” said Vann Joines, GCHP project manager.
GCHP was unfazed by the deteriorated condition of the building. “What we saw was a very good location in the geographic center of New Orleans on two very big thoroughfares, Washington Avenue and Broad Street,” said GCHP’s Tom Crumley. “You have a good site in the center of the city and the bones–the actual structure–was iconic and structurally sound. It just happened not to have a roof or windows and had trees growing inside.”
Image: Courtesy of Claire Bangser, Roots and Wings Creative
Renovation of the historic Bohn Motor building in New Orleans is financed in part by the new markets tax credit and federal and state historic tax credits.
Historic Considerations, Adaptive Reuse
To help the building qualify for federal and state HTCs, Kathleen Rhodes worked with the state historic preservation office to get the building added to the National Register of Historic Places in 2011. Alison Saunders, Louisiana’s Division of Historic Preservation tax incentives director, said that preserving historic car dealerships is important because they represent a revolution in how Americans travel.
“The dealership became the center of the automobile culture,” said Saunders. “It was the showroom and the repair shop back when you couldn’t just stop into a mom-and-pop location because this was when it was all brand new.”
Saunders said historic car dealership buildings often lend themselves well to adaptive reuse because they have open spaces, larger corridors and typically not many interior historic details to preserve.
This was certainly the case with the Bohn Motor building, which had deteriorated over the years, but was still viable for adaptive reuse. Even after the 2002 fire and Hurricane Katrina in 2005, much of the structure was salvageable because it was mostly concrete and steel.
Renovation work included stabilizing the foundation with 150 pilings, repairing every masonry joint, replacing the missing windows and preserving part of the car ramp leading to the former service shop on the second floor.
The project will create about 175 construction jobs and 53 full-time equivalent jobs.
Image: Courtesy of Claire Bangser, Roots and Wings Creative
A groundbreaking ceremony was held in February at the former Bohn Motor Company Building in New Orleans. Once completed, the building will house Odyssey House Louisiana and will have some space for commercial retail tenants.
The Bohn Motor redevelopment required multiple funding partners, both public and private. “Bohn is a great example of dedicated, hard-working professionals coming together to creatively use the new markets tax credit and historic tax credits to bring much needed medical services to New Orleans,” said Matt Meeker, CPA and partner at Novogradac & Company LLP, who provided tax structure consulting and financial forecast services.
“There were a lot of moving parts,” said Kelly Longwell of Coats Rose, who represented GCHP. “We were looking at what part of the expenditures we could include in the [qualified rehabilitation expenditures] for historic credits, what [the Rhodes family] could get reimbursed for and what they can do with the building with the limitations of the new markets tax credits.”
Enterprise Community Partners provided $9.5 million in NMTC allocation and had a $2.5 million participation in the Reinvestment Fund’s $5 million leverage loan. “Once the deal team was in place and the capital stack put together, all the different funding sources–tax credits, private debt, city and state funds–meant we had to work together to ensure that we were meeting the requirements and restrictions of each funding source,” said Chimeka Gladney, managing director of structured finance for Enterprise.
The Goldman Sachs Urban Investment Group (UIG) provided $5 million in NMTC allocation and $4.8 million as the sole NMTC equity investor. Yarojin Robinson, a vice president in UIG, said the team’s involvement in the Bohn Motor project is part of its larger approach to revitalizing New Orleans, where the team has committed more than $300 million in investments.
“The importance of this project was immediately apparent to us,” said Robinson. “Not only does it revitalize a long-blighted site, but its anchor tenant, Odyssey House Louisiana, provides best-in-class services for people with health and social needs.”
“One of my favorite parts of this project was the ability to work with so many strategic community partners that are deeply rooted in the area in which we were investing,” said Chelsea Crowder, an associate in UIG. “Working alongside local residents and community leaders is core to our investing work, and is core to the success of this project.”
Reinvestment Fund, which provided a $5 million leverage loan and a $2 million short-term construction loan to bridge the receipt of state and local funding, liked the health care services component of the project.
“We were interested in Odyssey House Louisiana, the largest addiction services provider in Louisiana, as a tenant given the strength it brings to the project financially, as well as the positive impact it will have on health through its quality programs serving over 15,000 primarily low-income patients per year,” said Bridget Wiedeman, Reinvestment Fund’s senior director of health services lending. “The comprehensive model of behavioral health care, addiction services and primary care are a great fit for the health care lending program we have been building since 2012.”
Twain Financial Partners provided $2.5 million in federal HTC equity, $2.5 million in state HTC equity and $2.3 million in bridge financing for the state HTC.
“In addition to providing three pieces of the capital stack, we were most attracted to the project by all the partners that were involved,” said Nick Maglasang, vice president of Twain Financial Partners. “We did all of this work to ultimately help an underserved community in the city of New Orleans that will now have access to health care and medical services for many years to come, long after our respective compliance period of the new markets and historic programs.”
The New Orleans Redevelopment Authority (NORA) provided $500,000 in Community Development Block Grant (CDBG) disaster recovery funds available after Hurricane Katrina. “NORA initially worked with the Rhodes’ eight years ago through several iterations of the project and have stayed committed to bringing the building back into commerce,” said Brenda Breaux, NORA’s executive director. Breaux said NORA made several investments in the neighborhood and on the Broad Street corridor and that the Bohn building amplifies that work.
“We made investments all over the city of New Orleans for multiple programs, but on this particular street corner, we had several investments and one of the strategies for helping New Orleans recover is a place-based approach to recovery,” said Patrick Forbes, executive director of Louisiana’s Office of Community Development, which provided $1.5 million in CDBG funding. “We’re building up a critical mass of different places around the city that once were main streets that had fallen into disrepair from the storm.”
For the Rhodes family, finally pushing the Bohn Motor project toward the finish line with a group of cohesive partners has been rewarding.
“It’s a family affair here–this is a big venture and the largest development project we’ve ever done,” said Joan Rhodes. She said the project is one that the entire neighborhood has been looking forward to seeing completed because neighbors were tired of looking at a “burned-out” building. “This building is one of the last major buildings in this whole tract [to be rehabilitated],” said Rhodes. “This will complete the commercial node of Broad Street and Washington Avenue.”
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