Seniors Housing Business

FEB-MAR 2017

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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www.seniorshousingbusiness.com 37 February/March 2017 n Seniors Housing Business major alterations. Factory build- ings, for example, tend to be very large buildings that are difficult to divide into smaller apartments. Developers often need to change the shape of the building by carv- ing an open space into the middle to allow each apartment to have access to a window. On the other hand, once that challenge is overcome, the wide open spaces of a historic factory or warehouse can give designers relative freedom to draw their own floor plans. The floor plans of solidly built former schools are set in brick and concrete and are difficult to alter. Because each classroom is often shaped slightly differently, archi- tects will need to design most of the new senior apartments individually. The grounds surrounding school buildings often include space that can be redeveloped in different ways, including both lawns and playgrounds. "Often there is a lot of nice green space — onsite fea- tures like gardens, walking paths and benches," says Fitzgerald Expect the unexpected "While the location and the physical bones of these school buildings can be fantastic, they typically need a great deal of reno- vation," says Fitzgerald. Developers contemplating a historic rehab should make cer- tain that they have members on their team who are very familiar with this kind of work. "You just never know what you are going to find behind the walls," says Cruz. "Partner with a historic rehab professional." Developers often have to spend a few thousand dollars when they rehabilitate an old building to remove toxins such as lead paint or soil with lead in it. However, the costs can rise much higher. Developer HELP USA had to remove tons of dam- aged soil and a giant, 40,000-gallon heating oil tank from Spring Gar- den School. "It had to be taken out in pieces," says Cleghorn. A long line of trespassers had also damaged the Spring Gar- den School during the years that it stood vacant. The $270,000 that HELP USA spent on environmen- tal remediation includes $50,000 to remove pigeon waste. The old classrooms were also covered in spray paint. "It had remarkable graffiti. Every time you came in it was different," says Cleghorn. Most of the graffiti had to be removed, but the developers preserved a few examples. Historic school buildings can also be expensive to heat because of the big windows and wide hallways that make the buildings attractive in other ways. "Operat- ing costs could be higher," says Amos. An extra 10 to 15 percent in energy costs compared with similarly sized buildings is not unusual. The auditorium problem Old schools also present devel- opers with an added challenge: an auditorium and one or more gym- nasiums that need to be preserved. The historic tax credits that make it possible to redevelop the old school buildings typically require developers to preserve some or all of these spaces. Seniors housing typically needs some community space for services and management offices, but often not quite so much as an entire gymna- sium or two. At Jackie Robinson Middle School, Gorman found a way to use the old gymnasium and still sat- isfy historic rehabilitation officials. The developer divided the gym in half and filled one side with eight new senior apartments on two lev- els. The historic character of the high ceiling was preserved on the other side of the gym, which now includes a barber shop, doctor's office and a craft room. A catwalk above the barber shop and doctor's office provides access to the upper level apartments on the other side of the old gym. But Gorman could not find a use for the 300-seat auditorium at Jackie Robinson. Local build- ing rules are very specific about the entrances, bathrooms and handicapped accessibility features required for such a public space. Gorman opted to use that space to add another apartment to the project in order to generate more property income. So the audito- rium is unused. Visitors can look through a glass door at the space, but can't use it. "We mothballed it. We had to just lock the doors," says Matkom. Eventually, once the 15-year LIHTC compliance period has ended, a redevelopment could result in the demolition of an apartment to allow the auditorium to be used again as community space. However, these big spaces can provide an opportunity for devel- opers and designers to provide amenities that will help a new community attract residents. "You get creative with the space," says TD's Cruz. "These redeveloped buildings tend to need community centers or man- agement offices." Word of advice Despite the overall demand for affordable seniors housing, a new community without the right amenities — such as community spaces and resident services and activities — can suffer. "You want to make sure that you are providing residents ame- nities that are comparable to the local market," says Amos. "You can't rely on the uniqueness of the property. At times we have seen historic buildings struggle a little to compete because the developer did not bring in amenities." n Sherman Park Senior Living in Milwaukee features murals, display cases and other pieces of art to show off the history of the former school. Bendix Anderson, a New York-based freelance writer, has covered the commercial real estate industry for more than a dozen years. About the writer

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