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A recent Historic Macon Foundation restoration

Planning and Managing Neighborhood Revitalization

Tuesday, October 8, 13


Soul of the Community

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Revolving Fund model Grants and Loan funds

Sell property

Purchase property

Rehabilitate property P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Vernacular buildings

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

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Small area

Relative size of Huguenin Heights compared to Pleasant Hill P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

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No one wants to be first

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Huguenin Heights

• Four square blocks • Bounded by Interstate,

two major collector roads and a public park • 16 projects completed over five year period

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Vernacular buildings

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Economic Development 100%

100%

66%

10% Homes sold

Home Ownership P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13

15% Crime


Control Development

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Acquisition 1211 Ross St. Sold for $158,000 1,900 sf =$83/sf 1525 Coleman Ave. Sold for $130,000 1,510 sf =$86/sf 1295 Ross St. Possible Rehab project

1268 Ross St. Sold for $130,000 1,500 sf =$87/sf

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Estimating Value

• Average of $83 per square foot among these three

comparable recent sales • Our proposed project, 1295 Ross St., has 2,100 square feet • $83 per square foot x 2,100 square feet = $174,300 • The maximum sales price for this project once complete will be $174,300

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Acquisition Now think about acquisition:

•What are the costs to repair the home? •What is the cost of the money to be used for the repair? •How much developer’s fee do we need/want? •What will the Realtor’s fee cost? •How much will this cost to advertise? Add up all those costs and subtract from $174,300 Now, what can you afford to pay for the house?

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


1295 Ross St.- Before

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


1295 Ross St.- After

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Acquisition Creative acquisition strategies: • Donation from City instead of tear-down or condemnation • Speculative donation from City to increase property tax • Donation from city after delinquent taxes • Use “land bank” to aggregate property • Donation from developer if building is relocated • Bargain sale • Out-right donation • Donation after fire or other insurance pay-out • Estate gifts • Code enforcement calls • Others? P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Huguenin Heights

The reason you need a long time period and a concentrated impact is to increase the sales prices by a couple dollars per sale, so that the profits on projects sold at the end make up for losses taken in the beginning.

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Know your market Who is buying? 72% Younger singles and couples without kids 17% Empty nesters and retirees What are they buying? Highly finished detached homes between 400 and 2,000 square feet How much house to their incomes support? An average of $125,000

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


A real neighborhood

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

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Small house sizes

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Real Estate Changes

“Most buyers would be willing to accept a home with smaller square footage for one with a higher level of finish.”

NEW URBANITY: THE RISE OF A NEW AMERICA, By ARTHUR C. NELSON, The Annals of The American Academy of Political and Social Science November, 2009 626 Annals 192 P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Quantity over quality

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


House sizes shrink

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Research More than 50% are 1 or 2 person households • • 70% only have guests once a month or less, but want a separate bath •87% of renters paid $750/month in rent (max house price $115,000) • 78% were drawn to downtown because of walkability and culture 80% would live in a two bedroom house • 90% only wanted 1.5 or 2 baths • only 14% ate meals at dining room table • • 70% entertain 2 or more times/ month, informal meals and cocktails 75% spend 3 to 10 hrs./week on the porch or in the garden • 76% would pay more for energy efficiency •

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Our challenge 2 bedrooms and at least 1.5 baths • Space to entertain • Energy efficient upgrades • A great porch • High-end finishes, with custom interior design • All a quick walk to Mercer Village and downtown Macon • $500-$800 net cost/month • •Leaving plenty of money leftover for party supplies, dining out and travel!

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Partnerships

•City of Macon benefits from reduced crime, reduced police responses, reduced fires •Rehabilitation eliminates need and cost of tear-downs •Increased property taxes •Increased sales taxes from construction materials purchased •Increased employment from construction workers •Elimination of slum and blight

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Partnerships

•Mercer University needs increased campus security •Fences and patrols cannot provide the same security as a safe neighborhood •Faculty and staff living near the campus do not require parking •Five year retention agreements limit recruiting costs and retain talented faculty P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Partnerships

•Area’s largest employer •Employs over 1,000 nurses •Nursing turnover averages 10% per year •Average cost to recruit a nurse tops $25,000 •In addition, average parking space per employee costs

$15,000 to construct plus land acquisition and maintenance •Medical Center can institute down payment assistance with five year retention agreement for employees who will buy a house within walking distance of work P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Partnerships Historic Macon Foundation Mercer University

Knight Foundation Housing Authority

City of Macon

9% 9% 9%

47%

•$2 million total

26%

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Format

$800,000 - Cash (Knight Foundation grants, previous grants released from restriction and restricted by Board)

$700,000- Loans against our endowment at 4.75% interest only $500,000- Loans at $2/sf guaranteed developer’s fee (low-interest loans managed by College Hill Alliance and contributed by the City of Macon, Mercer University and the Macon Housing Authority)

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


In-Kind

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


In-Kind •Scana Energy, Gas plumbing for gas log fireplaces and stove, $1,000 •Lafarge Concrete, pervious concrete, $2,500 •Conditioned Air, 15 SEER heat pump upgrade, $3,000 •Georgia Power, two heat pump water heaters, $3,000 •Traditions in Tile, tile, $3,000 •YSY Construction, free tile installation, $3,000 •ICI Glidden Paints, free no VOC paint, inside and out, $7,500 •L.E. Schwartz, 20% off roof materials and installation, $2,000 •ZT3 Placemaker, landscape design, $1,000 •Ferguson, low flow plumbing fixtures, $500 •LCBwoodturning, custom hand-milled balusters and trim, $1,000 •Noland, sinks and faucets, $1,000 •Morris Appliances, 50% off kitchen appliances, $3,500 •Midstate Countertops, 50% off countertops, $3,500 •Tobesofkee Cabinets, 50% off cabinets, $5,000 •Cox Communications, cable wiring, $500 •BAP Security, partial donation of security system, $500 Total- $41,000 in in-kind donations P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

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Engage the public

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Creative Contracting 1. Fixed price construction manager hires hourly carpenters and manages sub contractors 2. Non-profit opens credit accounts at vendors 3. Non-profit finances draws for contractor 4. Commit to multiple projects at bid price without re-bid 5. Hire likely in-kind donors when the budget allows

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Marketing •90% of buyers

come from the web •All properties are listed in MLS with a Realtor •Pay for Google Ad Words •Register Google Blogger articles on each property •3’x5’ full color interpretive signs •Open houses and parties P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Incentives for homes 25%-30% state tax credit ($100,000 max) Georgia’s state income tax rate is 6%. A household with $50,000 in income pays about $3,000 in state income tax each year. Historic Macon Foundation’s houses come with $30,000 in tax credits, meaning buyers with $50,000 in income would not pay taxes for ten years. 8.5 year property tax freeze at prerehabilitation value Homes in Macon are charged property tax every year. For a $135,000 home, that tax is nearly $2,260 a year ($188/month). Historic Macon homes have values that are frozen, decreasing your property taxes drastically. P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Sales Sheets

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Revolving Fund Activity Revolving Funds Investments

1,200,000

900,000

600,000

300,000 2009

2010

0

2011 2012

Tuesday, October 8, 13


Revolving Funds Preservation Fund Peyton Anderson Fund

Knight Fund Facade Funds

Hills and Heights Fund

$200,000 $800,000

$550,000

•$2.4 million total

$600,000

$300,000

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Risks Management

•Staff

Real Estate challenges

specializing in Real estate is expensive •Even if you outsource construction, you need more staff • Board and staff relationships can strain •Have to be a market expert to acquire and sell property • Very hard to produce enough operating income to cover additional staff, much less help with existing operations

• Preservation and profit compete • Resource intensive • Without doing an entire

neighborhood, you don’t control comps, infrastructure • Risks multiply with environmental concerns, market fluctuations • Some properties are worth less than $0 • Every neighborhood has a different target buyer, and you don’t have the marketing money to reach them

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Ideas

• $1 million in endowment yields 5% • Same funds used in revolving fund •Turn twice a year (6 month projects) • Take a 6% developer’s fee/ project • Net a 12% return instead of 5%

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Revolving Fund Finances Revolving Funds Investments

$500,000.00

$375,000.00

$250,000.00

$125,000.00

$0

Tuesday, October 8, 13

1st revolution 2nd revolution 3rd revolution 4th revolution 5th revolution


Revolving fund results •One $500,000 grant gets spent over and over •On average we lose 10% on difficult historic preservation projects •After five revolutions of $500,000, we’ve spent over $2 million on

preservation projects •We’ve saved, restored and sold 19 houses with one $500,000 grant •Hopefully, the donor will release the remaining funds (around $300,000) from restriction so that it can be placed in our permanent endowment and revolving fund •This model creates lots of “bang for the buck” for donations and helps provide a long-term benefit for the organization and the donor

P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org

Tuesday, October 8, 13


Josh Rogers, Executive Director jrogers@historicmacon.org phone 478-742-5084 • fax 478-742-2008 email info@historicmacon.org • site www.historicmacon.org

Tuesday, October 8, 13

2nd session 10 3 13  

Preservation North Carolina State Historic Preservation Conference, concurrent session on neighborhood revitalization, by Josh Rogers

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