Adaptive reuse projects in prime locations enable affordable housing developers to maximize services for seniors.
By Bendix Anderson
The groundbreaking ceremony for the Spring Garden School, a new seniors housing community under construction in North Philadelphia, was a little like a class reunion.
The school was originally built in the 1920s but has been vacant for four decades. This August, the building will reopen as a 37-unit affordable housing community for seniors. More than a dozen seniors came to celebrate the groundbreaking.
“Many residents in the community had attended that school,” says Gloribel Cruz, vice president at TD Bank, which invested in the redevelopment.
Historic school buildings redeveloped into seniors housing are often nourished by long relationships with their communities. These landmark structures have plenty of people who want redevelopment to succeed, including prospective residents and local officials.
These redevelopments also demonstrate how elderly residents benefit by living near services and amenities that help seniors stay plugged in. However, fixing up historic buildings always presents challenges. Old schools, which often come with gymnasiums and auditoriums, are no exceptions.
These developments are becoming more common as affordable housing developers now eagerly look for opportunities.
“There is a supply of old schools available,” explains Jeffrey Woda, principal at The Woda Group, Inc., an affordable housing developer based in Westerville, Ohio. As school districts change, outdated schools close and become available for redevelopment. Woda has completed three developments that transformed old schools into affordable seniors housing and is working on four more.
Staying true to their schools
Seniors have already signed nearly a dozen leases for the 37 affordable senior apartments at the Spring Garden School. The whole community will be targeted toward low-income military veterans age 55 and older, and 12 of the apartments will be reserved for homeless military veterans.
“It should be full by New Year’s Day,” says David Cleghorn, senior vice president of real estate development for HELP USA, based in New York City.
Part of community’s connection to an old school comes from the memories of the graduating classes of yesteryear.
That’s the case at the Jackie Robinson Middle School, which was built in 1932 in Milwaukee, Wis., and has been redeveloped as Sherman Park Senior Living.
“About one-third of the seniors either went to the school or taught there,” says Ted Matkom, Wisconsin market president for Gorman & Co. Inc., an affordable housing developer based in Oregon, Wis.
The longstanding ties create a built-in sense of community for seniors. “It certainly gives them a sense of pride to live in a building that they went to school in years before,” says Woda.
Redeveloped schools are also often located in places that help seniors stay connected. “These schools tend to be near hubs of activity,” says Woda. They are often surrounded by residential areas the schools were created to serve and are near the service and transportation options of a downtown or commercial area.
That’s perfect for a senior community.
“Seniors who have access to transit, healthcare services and community amenities improve their quality of life — usually having a direct impact on their overall health and longevity,” says Eileen Fitzgerald, CEO of Stewards of Affordable Housing for the Future (SAHF), a nonprofit collaborative of leading housing providers based in Washington, D.C.
That’s especially true for the seniors who live in affordable housing.
“The median income of a senior in a SAHF member property is just under $13,000,” says Fitzgerald. “So, these seniors often don’t even have the resources to own and maintain a car, even if they are healthy enough to drive it.”
Housing officials hold the key
Although the LIHTC program distributes federal tax credits, the program is largely administered at the state level, according to ChangeLab Solutions, a nonprofit organization that provides legal information on matters relating to public health. States have broad discretion in how they shape the program and distribute tax credits to projects based on local needs and priorities.
More specifically, states develop qualified allocation plans (QAPs), published documents that outline their eligibility requirements for LIHTC tax credits. QAPs include a scoring system, and proposed development projects earn points based on how many of the QAP’s itemized criteria they satisfy. Tax credits are subsequently awarded to projects that score the most points, explains ChangeLab Solutions.
Many adaptive reuse projects involving former school buildings often earn extra points in the QAP process because they tend to be located in highly desirable areas.
“It makes so much more sense to have affordable housing located near transit and services,” says Fitzgerald. “Policy makers are much more aware of this importance now, and state QAPs and other funding sources prioritize investing in affordable housing that has transit access and is in, or near, communities and services.”
Spring Garden scored quite well in the Pennsylvania Housing Finance Agency’s tax credit competition, gaining points for its location and other factors. “It was a seniors and special needs project in a hard-to-develop, low-income area,” says Cruz.
Local officials are invested
Municipal and housing officials are also motivated to make these adaptive reuse projects work because the alternative of letting a building continue to stand vacant can have a corrosive effect on the value of properties nearby.
“Local governments have a lot of interest in figuring out what to do with these old schools,” says Woda.
Demolition is often the least attractive option, even if old school buildings are not protected landmarks with defenders in the community. These buildings are so solidly constructed — all masonry and thick concrete — that demolition is generally considered to be cost-prohibitive.
“It would have cost millions just to tear it down,” says Cleghorn of HELP USA.
Politicians and community leaders typically want to help save old schools because they believe it’s the right thing to do and they get credit for saving a cherished landmark. Cities and towns often bolster redevelopment plans with grants and soft financing. Spring Garden, for example, received a 10-year tax abatement from the City of Philadelphia.
“When you take an iconic building and revitalize it, you see neighborhoods really come together. Cities can really back these projects,” says J.J. Amos, vice president of national field operations for Enterprise Community Asset Management, whose portfolio of affordable housing properties includes several redeveloped schools.
Most importantly, redevelopment projects involving landmark school buildings are eligible for federal historical rehabilitation tax credits that can bring millions of dollars of equity to a project. Many states also have their own historic rehab tax credit programs that augment the federal program, and these rehabilitation projects are much more common in states that offer that subsidy.
The extra financing is especially important to cover the extra cost that comes with historic rehabilitation. Many projects cost in excess of $300,000 per unit in total development costs.
Old school buildings typically feature floor plans that are relatively easy to convert to housing. Classrooms are often 600 to 1,000 square feet in size, about right for a one- or two-bedroom apartment. Large windows can make for attractive living spaces. Even the hallways are the right size.
“The wide hallways and common spaces of schools can be well-suited to the mobility needs of seniors,” says Fitzgerald.
By comparison, other types of historic buildings may require major alterations. Factory buildings, 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 carving 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, architects 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 features 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 renovation,” says Fitzgerald.
Developers contemplating a historic rehab should make certain 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 damaged soil and a giant, 40,000-gallon heating oil tank from Spring Garden School. “It had to be taken out in pieces,” says Cleghorn.
A long line of trespassers had also damaged the Spring Garden School during the years that it stood vacant. The $270,000 that HELP USA spent on environmental 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. “Operating 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 developers with an added challenge: an auditorium and one or more gymnasiums 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 gymnasium or two.
At Jackie Robinson Middle School, Gorman found a way to use the old gymnasium and still satisfy historic rehabilitation officials. The developer divided the gym in half and filled one side with eight new senior apartments on two levels. 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 building 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 auditorium 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 developers 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 management 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 amenities 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.”