Novogradac Historic Rehabilitation Awards Honor Variety of HTC Investments During COVID

Published by Brad Stanhope on Monday, July 11, 2022
Journal Cover Thumb July 2022

From a permanent supportive affordable housing complex in Chicago to an affordable housing property in Salt Lake City built despite the COVID-19 pandemic and an earthquake to a social innovation district in a former St. Louis hospital to the rebirth of Alabama’s first public school building, winners of the 2022 Novogradac Journal of Tax Credits Historic Rehabilitation Awards show the varied benefit of historic tax credit (HTC) investment.

The Major Jenkins Apartments in Chicago, Delmar Divine in St. Louis, the Jackson Apartments in Salt Lake City and Barton Academy for Advanced World Studies in Mobile, Alabama, are the 2022 winners. The awards honor those who strive for excellence in historic preservation. Winners will be honored at the Novogradac 2022 Historic Tax Credit Conference, Oct. 6-7, in St. Louis.

The award-winning properties each received HTC equity that was crucial to the ability to begin or complete the development during the pandemic.

“This year’s award winners not only show the range of properties that can be revived through the HTC, but they also show the persistence of HTC stakeholders during the COVID-19 pandemic,” said Novogradac partner Michael Kressig, CPA, who will chair the conference at which the properties and their owners will be honored. “Historic preservation is such a valuable tool and these practitioners persisted during a uniquely difficult time. That effort–and the properties that they made possible–are worthy of these awards.”

The winners are:

Residential Development that Best Exemplifies Major Community Impact

The Major Jenkins Apartments in Chicago’s Uptown community is a rehabilitation of two buildings–the 77-room Hotel Surrey and the 83-room Warren Hotel, which were built in 1924 and 1925, respectively–that now provides supportive housing to 156 residents who have experienced homelessness and/or have a disability. Developer Mercy Housing Lakefront updated the residential units, created new common area spaces, redesigned existing common area space and added amenities including Wi-Fi, air conditioning and more.

2022 HTC Awards - Residential Major Community Impact - Winner

 

The Major Jenkins is one of 12 permanent supportive housing properties operated by Mercy Housing Lakefront in Chicago, each of which combines affordable housing and voluntary supportive services. The preservation was a rolling rehabilitation, with residents temporarily relocated while their section of the building was under construction.

Without the investment of $2.6 million in HTC equity from RBC Capital Markets (in addition to $6.8 million in LIHTC equity), the development would have faced difficulty closing.

Non-Residential Development that Best Exemplifies Major Community Impact

The Delmar Divine is a mixed-used development in St. Louis that provides 105,000 square feet of office space, shared services and other resources for nonprofits, foundations and community support organizations, as well as about 150 residential units.

2022 HTC Awards - Non-Residential Major Community Impact - Winner

 

CRG developed the Delmar Divine to create a social innovation district where agencies can collaborate, innovate and provide better outcomes for the neediest in the region. Located on the site of the former St. Luke’s Hospital (which closed to the public in 2014) on the eastern edge of the West End neighborhood, the property is on a street that historically split the city by racial lines.

The development received $11.4 million in federal HTC equity from U.S. Bancorp Community Development Corporation as the investor, split between the commercial and residential components and $14.2 million in state HTC equity, similarly split, with Enhanced Historic Credit Partners as the investor.

Residential Development that Overcame Significant Obstacles

The Jackson Apartments in Salt Lake City will remain affordable for seniors through 2070 thanks to a $25.8 million rehabilitation that included $4 million in HTC equity. However, the property had to survive the repercussions of the COVID-19 pandemic to reach completion.

2022 HTC Awards - Residential Overcame Significant Obstacles - Winner

 

Developer Hampstead Jackson Partners LP put together the transaction to renovate the property, which was built in 1916 and had major systems nearing the end of their useful life. After the pandemic hit, construction began in June 2020 and continued through the end of 2021–persisting through COVID-19, supply shortages, labor shortages and a 5.7 magnitude earthquake that damaged the property. The earthquake led to reconstruction of the masonry parapets and a change in the brick chimney that once stood nearly 15 feet above the roof line.

Thanks to $4 million in HTC equity ($2.4 million in federal HTC equity with the owner as the investor and $1.6 million in state HTC equity from Key Community Development Corp.) and $8 million in 4% LIHTC equity from Key Community Development Corp., the Jackson Apartments were completed.

Non-Residential Development that Overcame Significant Obstacles

The first public school building in Alabama is now the Barton Academy for Advanced World Studies, thanks to $4.3 million in HTC equity from U.S. Bancorp Community Development Corp. Built in 1836 as the first school building for the first public school system in Alabama, the Mobile, Alabama, property operated as a school until being converted to the headquarters of the Mobile County Public Schools in the 1960s. It had been vacant since 2007 before being transformed by the Barton Academy Foundation.

2022 HTC Awards - Non-Residential Overcame Significant Obstacles - Winner

 

The school’s doors reopened in August 2021 as a model for 21st century learning with a focus on global studies and entrepreneurship, taught through a project-based curricular approach. The Barton Academy for Advanced World Studies’ curriculum includes courses with a focus on global studies, world languages, entrepreneurship and fine arts to enhance the advanced core course offerings. Barton houses numerous innovative labs including collaborative, emerging technologies, and STEM among many additional experiences to prepare students. Without the HTC equity, the development would not only have lost the $4.3 million in equity, but grants and donations, new markets tax credit equity and financing from Alabama Saves, a publicly funded loan program for energy efficient construction and renovations.

Despite the COVID-19 pandemic, the development was completed on time and on budget and opened in fall 2021. It brought the long-vacant school property back to life and catalyzed additional development in downtown Mobile.

Honorable Mentions

Residential Major Community Impact: Overland Lofts, Springfield, Massachusetts (Owner: Overland Lofts LLC)

Non-Residential Major Community Impact: Judson Mill, Greenville, South Carolina (Owner: Taft Family Ventures, Greenville, North Carolina)

Residential Overcame Significant Obstacles: Cielo Place, Fort Worth Texas (Owner: Saigebrook Development LLC)

Non-Residential Overcame Significant Obstacles: The Grady Hotel, Louisville, Kentucky (Owner: Vision Hospitality Group)