Download
1 / 32
320 likes | 556 Views
Cooper School: Neighborhood Landmark and Eyesore. Cooper School Background. The Cooper School, constructed in 1917 and expanded in 1929, is a landmark in the Delridge Neighborhood School was closed in 1989 when a new elementary school was constructed Building deteriorates
E N D
Cooper School Background • The Cooper School, constructed in 1917 and expanded in 1929, is a landmark in the Delridge Neighborhood • School was closed in 1989 when a new elementary school was constructed • Building deteriorates • In 1999, the community identified redevelopment and renovation of the school as a priority in the Neighborhood Plan
Preservation Effort Beginswith Community Involvement • Delridge Neighborhoods Development Organization (DNDA), the CDC in the neighborhood, began a series of community meetings in 2000 to determine how to preserve the building • In 2002 over 200 neighborhood residents and community stakeholders confirmed the arts and cultural center plan as the preferred use for the Cooper School over 16 presented options.
Planning Phase • Focus groups with local arts organizations to assist in the initial planning and to create design guidelines for the units • Highly experienced development team, including architectural firm that is well versed with historic renovations to assist with the planning process • Community planning process provided 16 various distinct options for the redevelopment ranging from a B and B type development with theme restaurants, to its current arts oriented use • Final program include the top two floors being converted to 36 artist live-work spaces and the ground floor developed as a community cultural arts center with 25,000 sf, including offices for arts organizations, a 150 seat theater, a recording studio, dance studio, kitchen, art fabrication workshop and classrooms
Development Time Frame • 2000 - Community planning process began. • 2002 - DNDA began community capital campaign. • 2002-04 – DNDA applied for funding from city and state sources multiple times prior to award.
Project Detail • 36 studio apartment artist lofts created by dividing classrooms and converting unused attic space. • The units range from 430 to 1440 square feet, averaging 650 square feet. • All units targeted to artists at 30 to 50% of AMI • Attractive units with 12+ foot ceilings and large windows to allow for natural light. • Retained many original elements including hall lockers, woodwork and wainscot built in cabinets and classroom chalkboards. • On site parking for residents and commercial tenants • Cultural arts center with 25,000 square feet of commercial space • offices for arts organizations currently five tenants with five year leases • 150 seat theatre, recording studio, dance studio, a kitchen, art fabrication workshop and classrooms for short term lease.
Project Structure and Financing • Project is divided into two condominiums: “commercial” unit on the ground floor commercial and residential unit on the upper floors • Total Development Cost is $11.8M: 38% attributable to commercial; 62% to residential • Equity for project covered 32% of development costs: $1.9M to the residential condominium and $1.9M for the Cultural Arts Center
Financing / Funding Structure ResidentialUses / Sources • 4% and tax exempt bond tax credit deal • $7,430,000 - Total project cost residential • $3,600,000 - Tax Exempt Bond issued by the Seattle Housing Authority divided into an “A” and “B” traunche, with “B” traunche providing construction financing, allowing the project to pass the 50% test and then taken out with LIHTC and HTC equity. • $2,960,000 - 4% and Historic Tax Credit Equity • $1,950,000 - City of Seattle Housing Levy • $1,620,000 - State of Washington Housing Trust Fund • $800,000 - “A” traunche permanent financing • $100,000 - Deferred Developer Fee
Financing/Funding Structure Commercial • $4,500,000 - Total development cost • $3,500,000 - Capital Campaign proceeds from large and small sources • $800,000 - Historic Tax Credit Equity • $100,000 - Deferred developer fee • $1,100,000 - LISC construction financing to bridge HTC and capital campaign sources
Underwriting ConsiderationsConstruction Risks • Substantial rehabilitation on an existing old structure is always difficult with the potential for hidden conditions. • Established a healthy construction contingency.
Underwriting ConsiderationsMarket Risks Residential • There is relatively little artist loft housing outside of downtown Seattle for comparable rents • Relatively large unit size relative to other studio apartments • 25% of the units are at 30% of AMI • High debt cover on the TE Bond debt • State HTF must pay debt in second position considered a “friendly lender” • Sponsor advertised on artist related websites and had a waiting list of over 150 residential tenants
Underwriting ConsiderationsRisks Commercial • Difficult to determine comparable arts spaces for operating costs • No hard debt on the first floor commercial sources income need only cover operations. • DNDA secured letter of intent to lease all the “long term” commercial space on the ground floor. • Difficulty to determine how well the short term rental of the community arts space on the first floor will lease
Underwriting ConsiderationsManagement Risks • Residential – artists targeted for rental and chosen through a mutual model where existing tenants counsel; interview potential residents. • Artists targeted as renters but not mandated by any program. • Commercial – are the projected costs to operate the community arts space adequate. • No hard debt on the first floor commercial income need only cover operations.
Concluding Perspectives on Mixed Use DevelopmentChallenges • Lengthy process for funding was assisted by operating support from the LISC/Impact Capital/City of Seattle Operating Support Collaborative • Shifting program for the first floor commercial up until the year prior to construction when “solid” arts originations were located as tenants • Providing more access to the building for investigation may have prevented a few surprises during construction • Operating costs, principally utilities, are a challenge in the large common spaces in the buidling • Community development value drove a process which most non-profit developers would not endure • Lack of other funding options for “commercial” portion of the project made the historic credits a more attractive option
Concluding Perspectives on Mixed Use DevelopmentResults • High profile project that saved a valuable community landmark • High profile real estate project for DNDA • Wonderful example of adaptive reuse and sensitivity to neighborhood issues for the school district • Shifting program allowed for a better building fit to the current commercial tenants and the construction of a recording studio not originally planned for on the first floor • Both the commercial and residential spaces are fully occupied two months after opening • Over 3,000 people attended the open house and the commercial space is off to a sound start
What is it? “Special Valuation” means the determination of the assessed value of the historic property subtracting, for up to ten years, such cost as is approved by the local review board.
Who can participate? • Local option program; • Each local legislative designates a “local review board” - in Seattle, that is the Landmarks Preservation Board; • 46 communities in Washington State are eligible to participate, including Seattle; • Eligible properties are either listed in the National Register of Historic Places or; • listed in a local register if the jurisdiction is a Certified Local Government; • Each jurisdiction defines eligible properties within those parameters. In Seattle, eligible properties are all Seattle landmarks subject to controls imposed by a designating ordinance and all contributing structures in National Register or local historic districts;
What are the criteria? • Property must be a historic property • Fall within a class of historic property determined eligible for special valuation by the local legislative authority • Be rehabilitated at a cost which meets the definition set forth in RCW 84.26.020(2) within 24 months prior to the application for special valuation • Be protected by a local agreement between the owner and the local review board
How are “rehabilitation” and “cost” defined? • Rehabilitation is the process of returning a property to a state of utility through the repair or alteration, which makes possible an efficient contemporary use while preserving those portions and features of the property which are significant to its architectural and cultural values. • Cost means the actual cost of the rehabilitation, which cost shall be at least twenty-five percent of the assessed value of the historic property, exclusive of the assessed value attributable to the land, prior to rehabilitation.
What is the process? • Apply to the Assessor before October 1 of the calendar year • Assessor refers application to the appropriate jurisdiction • Local Review Board (or staff) requests information from application: • Description of rehabilitation • Time period of rehabilitation • Photographs • Financial documentation to substantiate costs • Board approval (or denial) • Agreement between owner and Board • Letter to Assessor indicating owner has complied with requirements and Board has approved cost • Document filed with County
Cooper School • City of Seattle Landmark, Ordinance No. 121866 • Rehabilitation Period: July 1, 2005- February 28, 2006 • Assessed Value: Land: $359,904 Improvement: $317,088 Total: $676,992 25% of Assessed Value of Improvement: $ 79,272 Submitted Rehabilitation Costs: $ 3,744,303 Percentage Value of Rehabilitation: 1,181%
How does it really work? Beginning in January, 2007, $3,744,303 will be deducted from the total assessed value until December, 2016. With a rate of $13 per $1,000, that is a savings of $ 48,672 per year.
