REVITALIZING HERITAGE: THE REDEVELOPMENT OF ROOSEVELT HIGH SCHOOL IN GARY INDIANA
A CREATIVE PROJECT
SUBMITTED TO THE GRADUATE SCHOOL IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE
MASTER OF URBAN AND REGIONAL PLANNING
BY
JOSE RODRIGUEZ TRUJILLO ADVISOR -
SANGLIM
YOO
BALL STATE UNIVERSITY MUNCIE, INDIANA DECEMBER 2024
Executive Summary
Study Area
History
Location Analysis
Market Analysis & Demographics
Development Plan & Feasibility Analysis
Construction Phasing & Timeline
Design and Development Phasing
Conclusions
Citations
Appendix
In recent years, the traditional model of community development has shifted away from encouraging the complete demolition of entire neighborhoods to a new approach that aims to revitalize existing neighborhoods. This shift has led development professionals to recognize the cultural and economic potential of historic neighborhoods. However, undertaking projects in distressed/historic neighborhoods requires different tools than those used in traditional development proposals. This project proposal for the Gary Roosevelt High School in Gary, Indiana, aims to demonstrate that severely distressed buildings in economically struggling neighborhoods can only be revitalized effectively through the public-private partnership development model rather than through traditional development methods that depend predominantly on the private sector. The proposal also aims to provide an actionable guide for the redevelopment of Gary Roosevelt High School.
Gary Roosevelt High School was chosen as the case study not only for its development potential and opportunity to help catalyze the economic growth of the area but also for its importance to the history of the African American Community in Gary, Indiana. The case study aims to highlight the immense cost of rehabilitating similar sites and its tendency to trap similar properties into a vicious cycle of inaction from both public and private actors. Only through thoughtful coordination of public and private finance tools can the proper capital be raised to rescue such properties.
The proposal aims to re-imagine the site into a residential development composed
of market rate and affordable rate units and supportive community amenities. By leveraging public sector tools, specifically the Regional Economic Acceleration and Development Initiative (READI), Lilly Endowment funding, and state redevelopment tax credits, in conjunction with private sector capital, the site’s large redevelopment costs can be overcome. This private-public sector partnership can be integrated into a larger redevelopment strategy that works in hand with the surrounding community development corporations and housing authority properties to re-energize the surrounding areas and bring much-needed economic growth to the neighborhood.
Property Address
Property Owner
Land Area
Table 1: Site Overview
730 W 25th Ave, Gary, IN 46407
The School City of Gary
18.2 Acres
Parcel Number 45-08-16-251-001.000-004
Current Zoning R2
TIF No
Other Designations
Building Square Footage
Source: Lake County Assessor’s Office, (2024)
National Register of Historic Places
Gary Roosevelt High School is situated at 730 W 25th Avenue and is owned by the Gary School Corporation. The site is currently zoned as R2 and is not located in a TIF district. The school is close to the downtown core of the city and occupies a significant portion of land within the midtown neighborhood, which could potentially be developed into a central hub of community development for
Gary Roosevelt High School was created as a direct result of the segregationist policies of the Gary School Board. In 1908, the board mandated that all schools under its jurisdiction be segregated, leading to the creation of Gary Roosevelt specifically for the African American community. As the African American population grew over the following decade, portable classrooms were constructed on the current school site in 1921 to accommodate the expanding community. An attempt at integration in 1927 resulted in the admission of 18 African American students to the all-white Emerson School, albeit in segregated classrooms. This sparked a four-day protest by 600 white students, known as the Emerson Strike. The strike ended when the Gary City Council agreed to establish a separate African American high school, which was named after President Theodore Roosevelt (Baily & Johnson, 2024). The school was officially dedicated in 1931 and, in the following decades, played a significant role in the cultural life of Gary, Indiana. It was the first school constructed exclusively for African American children in the state and one of three in the entire state. At its peak enrollment, it became one of the largest African American high schools in the Midwest (Pekarek & Tatum, 2024).
Decline
The economic decline of the City of Gary had a negative impact on the school, causing declining enrollments, academic struggles, and financial hardships for the school district and the high school (Indiana Landmarks, 2024). At the beginning of 2005, the school was placed on probation after receiving an “F” grade on Indiana’s Accountability
Test. Despite efforts, the school was unable to improve its performance. In 2011, then Superintendent of Public Instruction Tony Bennett announced plans for the state takeover of the school under a 1999 state law. The control of the school was handed over to the private company, Edison Learning Inc. However, even with 22 million dollars in state funding, Edison Learning failed to enhance the academic and financial resilience of the school during its decade-long management (Johnson, 2019).
The school operated as an educational institution until 2020 when it was closed due to burst pipes the previous year (Koval, 2024). The cultural significance of the site for the African American community in the city has sparked renewed efforts to save the school. In 2024, the National Trust for Historic Preservation included it in its 2024 list of America’s 11 Most Endangered Historic Places in an attempt to raise awareness on the precarious state of the building (WNDU, 2024).
Gary Roosevelt High School is located in the Midtown neighborhood of Gary, Indiana. Similar to the large parts of the city, the surrounding neighborhood suffers from a depressed economic situation and a deteriorated physical environment. Most of the surrounding census tracts are low-income, with a significant share of residents being half a mile from the nearest supermarket, making the area a functional food desert per the United States Department of Agriculture (Map 2). Additionally, the areas in the immediate neighborhood of the school have low access to supermarkets, where either 500 residents, or 33% of the population, live further than 1 mile from a supermarket (Map 4). This poses a major challenge for the community to thrive both physically and
economically, as it indicates a lack of grocery stores and other retail services. This also highlights the strong need for community spaces in the project to provide opportunities to house either amenities or social services to support the community and help sustain any future growth in the area.
The 18-acre lot on which Gary Roosevelt High School is located is owned directly by the School City of Gary. The lot directly north of the site is composed of 17 additional acres controlled by the City of Gary with existing recreational infrastructure that could be updated or replaced (Map 1). To the West, the Gary Housing Authority owns 31 acres of land. Most of the Northeast block near the high school is owned by the Gary East Side Community Development Corporation (Map 1). However, the Northeast block does have a large existing building that will need to be demolished. These four major entities can work together to develop a strong disposition package or a phased master plan to attract private developers to work in conjunction with the redevelopment of the high school to attract economic development.
A Directly North of the site lies a large traditional subdivision with a lack of vacant structures that may indicate a somewhat stable population base nearby (Map 1). The site is also strategically located next to Gary’s largest TIF district, the Consolidated Area (City of Gary, 2017). This TIF serves a variety of purposes to help finance projects in the downtown area. Importantly, it also contains the Madison Townhomes Fund, which finances a bond for affordable housing on Madison Street (Map 5). The close proximity of Madison Street and its TIF could be leveraged for future funding if the City committed
Source: Lake County Assessor’s Office (2024)
to expanding the TIF. This shows the high importance of using the location analysis phase for projects like these to identify not only private-sector points of interest but also public-sector tools that can be combined later on. Additionally, the site has direct access to Broadway, a major thoroughfare in the area that leads straight into I94 and the downtown area of Gary and its central business district.
In 2014 the city was awarded $6.6 million to use for demolition of properties through its Hardest Hit F- Blight Elimination Program. Many properties surrounding the school were demolished through this program leaving the area with many empty lots that can be used for future new home constructions (Map 3.)
Source: U.S. Department of Agriculture (2023)
SITE
Not to Scale
The site is currently zoned R2, which is geared towards single-family homes (Map 6). The overall area predominantly allows residential uses. The site is abutted primarily by R3 zoning to its east, ideal for single-family residential uses. On its south side along 35th Avenue, the zoning is a mix of B3-1 (limited Service). Zones B3-1 and B1-1 allow for various service-based businesses and residential uses so long as all residential uses are located on the second floor, making it ideal for local neighborhood businesses. The area north of the site is predominantly zoned R2, which is ideal for detached singlefamily homes. Finally, the site is abutted by R5 and R4 zoning to its West. R4 zoning is a deal for two-family homes, while R5 is ideal for multifamily development. Overall, the current zoning of the area is geared towards single-family development with the
Source: City of Gary (2024)
Front Setback
The lesser of 25 FT or 20% of lot size
The lesser of 25 FT or 20% of lot size
The lesser of 25 ft. or 20% of lot size
Side Setback
Each side >20% of building height or 10% of building width, whichever is greater
Each side >20% of building height or 10% of building width, whichever is greater
Each side >20% of building height or 10% of building width, whichever is greater
Rear Setback > 2/3 building height, but no less than 30 ft > 2/3 building height, but no less than 30 ft. > 2/3 building height, but no less than 30 ft.
Permitted Uses
Attached dwellings,
Single-family detached dwellings, Two-family detached dwellings
Multiple-family detached dwellings
Multiple-family dwellings, PUD’s, Open spaces, parks, playgrounds, and community centers, publicly or privately owned
Attached dwellings, Single-family detached dwellings, Two-family detached dwellings
Multiple-family detached dwellings
Multiple-family dwellings, PUD’s, Open spaces, parks, playgrounds, and community centers, publicly or privately owned, Public art galleries and museums
Attached dwellings, Single-family detached dwellings, Two-family detached dwellings
Multiple-family detached dwellings
Multiple-family dwellings, PUD’s, Open spaces, parks, playgrounds, and community centers, publicly or privately owned, Public art galleries and museums
Meets Requirements Does not meet Requirements
Source: City of Gary (2024)
potential for some limited business along 25th Street. Because of this, a comprehensive rezoning of the site and surrounding properties will be required in order to facilitate the redevelopment of the site into a multifamily project. To this end, after comparing the various multifamily zones allowed by the City of Gary’s zoning ordinances, the most advantages for this project would either be R5 or R6 due to both having comparable primary allowable uses to R7 but without the large unit size requirements (Table 2). However, it would require variances or to be grandfathered in since the current building would not meet the front and side setback requirements. The lot has sufficient space to meet all the parking requirements, with R5 having less intense requirements. The project would benefit from deviating from the zoning requirements to have less parking and preserve its historic character. Due to these deviations from the requirements set out by the zoning code, it would be more beneficial and provide more flexibility if the site is rezoned into a planned unit development, which would allow the character of the site to be maintained and avoid variances. The current zoning of the site permits planned unit developments and, as such, would be a viable rezoning solution.
Source: U.S. Census Bureau (2020). Decennial Census
* Total population count differs from the census due to Hispanics count being omitted
The current population of Gary, Indiana, per the 2020 decennial census, is 69,093, making it the 11th largest City in the state (STATS, n.d.). The city has continued to experience a population decline since 1970 (Graph 1). The racial makeup of the City is predominantly African American at 74% of the population. The median age of the residents of Gary is 38, which is in line with the state’s overall median age (U.S. Census Bureau, 2022)
Out of the total population, 58.5% are of working age. There are estimated to be around 27,773 households in the City; of those, 22% are married. However, the larger household typologies were female householder (no partner present) at 48% and male householder (no partner present) at 23% (Graph 2). The male householder typology is predominantly composed of males living alone at 17%. However, with the female householder, we can see a more varied familial household structure, with 15.5% of them living with children,20.9% living alone, and 34.7% living with someone older than 65 (U.S. Census Bureau, 2020). This shows that the working-age population within the City is composed primarily of a single individual and their mixed typologies rather than the traditional nuclear family. The housing typology of the project will need to address these familial structures through a focus on smaller unit sizes for cohabitating couples but should still focus on households of 3 people since the City’s average household size stands at 3.23 regardless of the familial structure (U.S. Census Bureau, 2022).
At the neighborhood level, we see that close to a third of the population is aged between
Source: Indiana Business Research Center at Indiana University’s Kelley School of Business
Source: U.S. Census Bureau (2021). American Community Survey 5 Year Estimates
15 to 44, but the census tracts to its East and West have a larger concentration of working-age individuals, indicating a potential working-age market (Map 8). However, these two census tracts, along with the census tract the development is located in, have high unemployment rates, hovering around 7 to 8%, but the Census tracts in the North and South areas are more st at 1 to 3% unemployment rates (Map 9). While the unemployment rates may be high, we also see that educational attainment is extremely high in the census tract to the North (at 42.9%) and to the South (31.1%) (Map 7). These demographic points at the census tract level indicate that both the East and West census tracts, along with the developments census tracts, are composed of more working-class populations with less-than-ideal unemployment rates. But are also sandwiched between two census tracts that are relatively healthy with a more professional working-class base.
Source: Census Bureau, 2022, ACS 5 Year Estimates
Source: Census Bureau, 2022, ACS 5 Year Estimates
It is vital that the City take advantage of this configuration for two key reasons. One, the two healthy census tracts may deteriorate if the bisecting census tract continues to decline, but conversely, if efforts are made to revitalize the tract through initiatives like our development proposal, the three tracts can work in conjunction to stabilize the whole area.
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
Source: U.S. Census Bureau (2022). American Community Survey 1-Year Estimates
The median household income in Gary, Indiana, stands at $36,153, which is significantly less than the state’s median household income of $66,785 (Graph 3). This shows that Gary’s overall median household income is stagnant. However, the married/couple household income in Gary stands at $63,709 which is closer to the state’s average, while family household median income stands at $44,467 and non-family households are at $26,159 (Graph 3). This, in conjunction with the previous household composition
analysis, could indicate that core family units that are similar to a nuclear family are in a relativity weak financial position along with single households, while married couples with no children (potentially being younger professionals) have the stronger purchasing power within the city. The development may then want to have amenities and designs geared towards these smaller couple sizes, especially since we are close to the downtown core, to establish the core revenue-generating units while other units aimed at larger families can be priced more moderately to take into consideration lack of purchasing power of the other household types.
Source: Rentdata.org, 2024
The current homeownership rates in Gary (44%) lag far behind the state’s average of 70.8%, indicating that the majority of the city’s residents are renters (U.S. Census Bureau, 2022). The current median rent stands at $1,200 (Table 4), a $100 increase from the previous year; however, if we exclude homes and townhomes and focus on apartments only, the average rent drops to $1,031, indicating low potential rental income generation from tenants. However, a key outlier is the studio typology, which has an average median rent of $2,892, which is significantly greater than the median rent in the city, which may be connected to the demographic data that shows married households without children are the demographics with more disposable income
(Zillow, 2024). Another major complication for the rental market in the area is that out of all the neighborhoods in the city, the Midtown neighborhood, where the project is located, ranks last in average rental prices, coming in at $769, meaning potential rental income would be even lower than the average in the city. But the highest rental neighborhood, downtown Gary, is also adjacent to our proposed development, which may help to offset the depressed rental income of the area and, if strategically developed, can benefit from the proximity to the downtown area and may mean increased rents in the future (Yardi Systems, 2024). Current Fair Market rents for Gary, Indiana, stand at about $100 less than the median rental prices for every housing type (Table 4), which means that most Section 8 and housing choice voucher holders would have a cap of funds available to cover most of their housing needs (Rentdata, 2024). The development of the site must be seen as a long-term investment strategy since most of the data indicates that rental prices in the area are sufficient to cover costs and are stable, but we cannot expect to charge higher prices for units. However, the data has shonw that most units stay on the market for around 16 days, with an average of 57 leads per unit, indicating a steady market (Reuther, 2024). Additionally, the rental market is currently considered balanced by HUD with apartment vacancy .landing at 4.9%; HUD also forecasts that the market will need 940 units within the next 3 years as of 2023 and has built only 590 units within the first year and expected to build only 200 units within 2024 meeting rental need within the first 2 years but will not be sufficient during the last year of the forecast (Kukawsk, 2023).
The estimated development cost for the project is $159,227,372, which roughly translates to $405.16 per square foot. The total size of the building is approximately 393,000 square feet. This cost falls within the standard industry range of $325 to $425 for adaptive reuse projects (Fox, 2023). The estimate is based on a $325 per square foot base price with additional costs for improvements, landscaping, environmental abatement, soft costs, and a 4% contingency added to the base price. While a higher price per square foot would reduce risk by ensuring sufficient funding, it is not necessary because the overall structure of the building is in relatively good condition. The building has only been vacant for 4 years and was closed due to pipe failure rather than structural issues. Therefore, we can expect the project to have fewer unexpected costs compared to a more dilapidated structure. However, a crucial aspect of this overall development cost is the assumed minimal acquisition costs since the Gary School system controls the site and would require their support to ensure minimal property transfer costs.
To meet these development costs, several different sources of public sector funding were reviewed and chosen based on their requirements and potential to complement each other to support the overall goal of the project. This proforma assumes that the lead organizton for the project has around $19 million in equity. This requires an organization with ample experience in community development and a solid financial base. Additionally, this proforma acknowledges support from the City of Gary with around $21 million. Once a majority of the funding has been secured, the City of Gary
* The detailed proforma can be found in the report appendix
* The detailed proforma can be found in the report appendix
can provide the financing through direct funds, Community Development Block Grants, or HOME funds. Out of these three funding sources, the ideal ones would be direct funding from the city or CDBG, as they would have more flexibility in their application.
The Indiana Redevelopment Tax Credit is administered by the Indiana Economic Development Corporation (IEDC) and offers companies and developers a transferable
income tax credit for investing in the redevelopment of communities, specifically in qualified redevelopment sites. A qualified redevelopment site is defined as vacant or underutilized land or building, and the approval of the site is at the discretion of the IEDC. The IEDC evaluates various different factors to determine site approval, including the potential impact on the local community, the potential to attract additional investment to the area, support from local and regional stakeholders, and the expected positive return on investment of the project (IEDC, n.d.). This proposed project meets the criteria by offering housing options for the area and also serving as a focal point for future redevelopment projects in the surrounding area. Another crucial aspect that needs to be addressed by any company pursuing this development model is comprehensive community outreach and stakeholder meetings to obtain support from local organizations, such as the Gary Housing Authority.
If the awarded tax credit exceeds $20 million, the IEDC requires a portion of the funds to be repaid. If the credit is $100 million or more, the IEDC may waive the repayment provision (IEDC, n.d.). Aiming for the higher amount would make the application more competitive and less likely to be approved, as it would indicate a lack of capital and a weak financial projection. Aiming for a credit closer to $20 million would be more advantageous for the application, even with the repayment provision. Another important factor in selecting the RTC for this project is its ability to covera variety of eligible costs. The RTC allows funds to be spent on acquisition costs, architectural and engineering fees, environmental remediation, construction management, permitting, demolition costs, and other expenses directly associated with the redevelopment or
rehabilitation of the property (IEDC, n.d.).
To qualify for the historic tax credit, a project must meet four broad requirements. First, the building must be listed on the National Register of Historic Places. Second, the project must pass the substantial rehabilitation test, meaning that the cost of the rehabilitation must exceed the pre-rehabilitation cost of the building. Third, all rehabilitation work must adhere to the Secretary of the Interior’s standards for rehabilitation, which require preserving the exterior aesthetics of the building and using comparable materials when necessary. Lastly, the historic building must be depreciable, and the project must be income-producing for five years after the rehabilitation, excluding private residences (DNR, 2024). Gary Roosevelt High School meets the first criteria since it has been designated as a historic structure for its significance to the African American Community. It is important to note that engaging with contractors familiar with historic preservation may increase construction costs to meet aesthetic standards. Additionally, engaging with a contractor experienced in historic preservation will ensure the project meets the second and third requirements, as they will be familiar with the processes laid out by the secretary of the interior. The final requirement will be met since the project will produce income.
To use this credit effectively, understanding its limitations will be critical. While the previously mentioned RTC is robust in its eligible costs, the historic tax credit is more constrained in terms of what costs can be covered. The majority of the credit would go
towards covering structural and material costs. While the credits come from a federal agency, they will be administered at the local level through the state of Indiana’s Historic Preservation Office. Of the qualifying expenses, the credit can only cover 20% of those costs, thus capping the maximum amount of funding available through this source. In our proposal, since significant work will be done to maintain the original exterior aesthetics of the project, thus we would aim to use a total of 20% of the credit (DNR, 2024).
The Indiana Regional Economic Acceleration and Development Initiative (READI) was established in 2021 under the leadership of Indiana Governor Eric Holcomb. The initiative aimed to shift economic development from a fragmented, project-focused approach to a more regional perspective. Through READI, the state aims to encourage geographically connected counties, cities, and towns to develop shared visions for their regional communities that can attract and retain talent and foster economic growth. Regions are encouraged to create data-driven development plans focusing on improving the quality of life, place, and opportunities (IEDC, 2024).
Following the success of the READI program, READI 2.0 was launched to continue in 2023/2024, allocating $500 million in grants and loans to the regions, with a maximum of $75,000,000 for each region.The Indiana Economic Development Corporation awards each region $50 million towards their plans in the first version of READI and $45 million in the second round. In the Northwest region, where Gary Indiana is located, one key project funded through READI is the greater South Shore
Initiative, aiming to develop a 90-mile area along Lake Michigan near Gary into a manufacturing and technology corridor (IEDC, 2024). Although this funding source is currently no longer taking applications, due to its success and high approval, another round of funding can be expected in the next two years. Therefore, it is crucial for the redevelopment of Gary Roosevelt to align itself with regional goals and be prepared to tap into READI funding in the future. To be eligible for READI funding, the project will need to be included in the regional plan/application submitted to the IEDC, and a partnership with a regional development authority, a regional strategic development commission, or a qualified nonprofit will need to be coordinated, as only these entities may apply for READI funding under Indiana Code § 5-28-43-2. However, the project would be eligible under the quality of place criteria set out by the initiative under housing availability and affordability. The importance of securing this funding source is that the qualified expenses under READI are flexible and could cover most hard-cost expenses (Indiana Economic Development Corporation, 2023).
The Lilly Endowment is a philanthropic organization based in Indianapolis that was established in 1937 by the Lilly family through stock gifts from their pharmaceutical company, Eli Lilly and Company. The foundation has three main areas of focus: community development, education, and religion. While its initiatives span the United States, it has a particular commitment to the state of Indiana, especially in providing grants for community development (Lilly, 2024).
The foundation prioritizes funding for various community development projects in
Indianapolis and supports community foundations and United Ways at the state level to foster community growth. Typically, cash grants or loans are awarded to charitable entities, not private individuals. The review process, which involves multiple endowment officers, takes around six months, and usually only a portion of the proposal is funded (Lilly, 2023).
Because of its focus on the nonprofit sector, to best meet the requirments of the Endowment, it is essential to engage with a local nonprofit or ensure that the project developer is a nonprofit organization. This shows the importance of involving public and nonprofit sectors in private public partnerships, as most grant funding from simialr organizations is restricted to nonprofit or through support from nonprofits.
Recentlly a current partnership has been established between the endowment and the READI initiative, with the Lilly Endowment committing $185 million to support the redevelopment of blighted structures through READI. This commitment makes the redevelopment of Roosevelt High School a strong candidate for that specific earmarked funding through the Lilly Endowment and READI (Brown, 2024).
The project consists of five different types of units (see Table 7), with the majority being 1 or 2 bedrooms and a significant portion dedicated to studios. These three different room sizes were prioritized over larger units based on market analysis, which indicates that the demographic with the most available income is married couples with no children. Therefore, providing unit options for them taps into the larger rental base in
the area. Additionally, the market analysis shows a premium for studio apartments in the city, which would allow for premium rental prices from the studio apartments as the neighborhood stabilizes and attracts younger professionals.
By targeting these specific demographics and providing fewer 3 to 4-bedroom market rate units, the project can support more affordable housing units in the 3 to 4-bedroom category, as the market analysis shows that these larger units are needed by less financially stable populations. This building composition strategy aims to maintain profitability by targeting the more economically stable demographics while providing housing support for the more vulnerable populations in the area without displacing them. While the market is currently not set up to sustain a mixed-use development, the project can still be positioned to stabilize the situation and begin to attract future retail development by providing community spaces that can be utilized by local nonprofits or other community resources useful to the community. By providing these community spaces, the project is likely to obtain historic tax credits, READI funds, and Redevelopment Tax Credits. These funding sources are competitive, and the community spaces may be crucial to the success of the application. The rental prices for the market rate units were determined based on the median rental incomes of the city, with a slight deviation of around $50 to $100 from the median rental income. These prices were considered sustainable as they were close to the fair market rental prices for the area (refer to Table 4). Aligning the market rate prices with HUD’s fair rental price ensures that the prices should be within most people’s budgets in the city. The affordable units were priced according to HUD’s 2023 Home rent limits for Gary
(HUD, 2023). A 5% assumed vacancy rate aligns with HUD’s current expectations for the market, and it is anticipated that the vacancy rates may not decrease but will not increase if more development in the area is stimulated.
The rent prices for community spaces were set at $15 per square foot, which is less than industry prices. They were priced to allow local community organizations to afford the spaces and enhance the project by providing services to the area rather than for profitability. Additionally, these community spaces will help strengthen funding applications. The rates for the community spaces are aimed at covering any expenses for hosting the spaces.
* The detailed proforma can be found in the report appendix
The project will need additional funding through a private loan in addition to the public sector funding sources already secured. Based on industry standards for a project of this size, the table outlines the assumed loan requirements. The project currently meets all the criteria for funding from a banking source, assuming it can secure all public funding sources and the remaining funding from the City of Gary. However, to meet the loan requirements, the project must be disposed of by year 10 and sold at a price of $63,629,073. This will require coordination between the city, civic leaders, and the project owner to identify a potential long-term owner after year 10. This is essential for the project to be effectively managed for the remaining 20 years. For underwriting
purposes, the project assumed a 7% cap rate, but the project decreased to a 6% cap rate at year 10 during disposition. However, if revitalization efforts are done in the neighborhood, it is likely that the cap rate could increase back to 7% or more as the value of the building increases. For a detailed breakdown of the operating program over the 30 years, please refer to the project proforma in the appendix.
Identify Community Owner
Site Acquisition
Securing Credit Buyer
Phase I Stakeholder Engagement
Preliminary Budget
Schematic Designs
Phase II Stakeholder Engagement
Updated Budget and Designs
Community Owner Funding Commitment
City Engagement
City Funding Commitment
READI Engagement
READI Funding Commitment
Lily Endowment Engagement
Lily Endowment Funding Commitment
Redevelopment Tax Credit Application
Redevelopment Tax Credit Commitment
Historic Tax Credit
Historic Tax Credit Commitment
Loan Application
Loan Commitment
Final Plans and Budgets
Final Plans and Budgets
Material Procurement
Material Procurement
Contractor Bidding
Contractor Bidding
Structural Work
Structural Work
Exterior Work
Exterior Work
Interior Work
Interior Work
Final Inspections
Final Inspections Project Planning Phase
Funding Application Phase
The success of this project, as well as similar projects, requires significant coordination among all stakeholders and the establishment of clear goals and timetables. For this project, I propose a 3.6-year phased timeline to successfully navigate all the components. The project is divided into three major phases: project planning, funding application, and construction.
During the project planning phase, the first step is to identify a community owner, such as a developer or agency capable of taking on the project. The school corporation, as the property owner, should spearhead the process of requesting proposals, along with other technical agencies or organizations like the Gary Housing Authority. This timeline assumes a 4-month duration for this phase, considering ongoing efforts in recent years to redevelop the site, which has put the infrastructure in place for a proposal. However, it may take longer, even up to a year, to find a suitable developer or organization. The site acquisition step involves transferring property ownership to the developer. It would be beneficial for the disposition strategy during this step to include a clause that requires the property to revert to the school corporation if the developer fails to develop the property within a specified time, thus mitigating risk. In addition to finding a developer to acquire the site and take on the project, an organization willing to buy the historic and redevelopment credits and support the project should also be sought. The developer or organization taking on the project could also be the entity that acquires and applies for the credits, or they could be tasked with finding a credit buyer as part of the disposition deal.
Community and stakeholder engagement are key to this phase. Community buy-in is important to ensure the project’s success and to ensure it meets the true needs of the community. Additionally, various organizations within Gary will need to be consulted to gain their support for funding applications. Therefore, a 6-month period has been allocated to this step. It is vitally important during this phase to begin engaging with the state and federal organizations responsible for funding sources to indicate interest in applying and to obtain application requirements.
After completing preliminary budgets and schematics, it is important to engage with stakeholders for a second round and continue this engagement throughout phase two. This will allow for adjustments to be made to meet community needs and gain more support. The next step involves ensuring that the developer or new property owner has the 12% capital required for the project, or finding additional funding if needed.
Following this, obtaining 13% of the project budget from the city is the next priority, as it requires the least amount of approvals and could unlock other funding sources more easily. The city’s commitment may be structured as a preliminary approval of funds contingent on obtaining further funding sources. However, having support from the City of Gary would increase the likelihood of obtaining further funding.
The next source to be applied for is READI, as having support from the city of Gary secured would naturally lead to a higher likelihood of successfully gaining support from
the region to be funded. Since most applications are not awarded until the end of the year, starting the process early on is vital to ensure application deadlines are met. The timeline aims to submit the application for the Lilly Endowment funding in September. The Lilly Endowment was targeted as the third source of funding due to its competitive nature. By placing it in this position, it is assumed that city funding commitment and a preliminary commitment by the READI region for funding will make the likelihood of approval of the Lilly Endowment more likely.
The process for obtaining historic tax credits would typically take around 6 months assuming no delays. Due to the likelihood of not obtaining quick responses/approval for both the historic tax credit and redevelopment credit applications, these sources of funding were moved toward the end of the timeline to allow for the other sources of funding not to be delayed and to ensure successful applications.
Applying for a conventional bank loan is assumed to be done last, as most of the public funding would be accounted for. However, depending on whether any other sources of funding are not secured, this step should be moved back and applied for sooner to account for the loss of funding and ensure the remaining funding source applications are secured. This timeline emphasizes the importance of understanding application deadlines and requirements to successfully apply for them and to leverage each one in a cascading format. This approach aims to apply for the least competitive sources of funding first to strengthen the overall project feasibility as more competitive funding sources are applied for. Applying for them in this manner also mitigates risk by securing
easier funding.
Once all funding is secured, I anticipate a one-year construction timeline with the following broad stages: predevelopment work (such as permitting and material acquisition), construction, and final inspections. While there is a possibility of delays with a project of this size, the construction phase is not expected to exceed two years. However, it’s important to ensure that construction does not exceed two years. After construction is completed, ongoing monitoring will be necessary, and documentation may need to be provided to the agencies and organizations from which funding was secured. The project’s design will be determined by the budget and the requirements specified by the National Parks Service. However, we anticipate that the project will respect the historical significance of the building and preserve most of its original character and the site. The accompanying drawings depict the current building layout and a proposed layout for proof of concept and visualization rather than construction drawings. Crucial to this step will be engaging a qualified design team with strong experience in adaptive reuse projects or similar projects that engage in historic preservations. Different design and construction consultants may need to be engaged or a designated design firm should be found that can effectively coordinate all specialty sub contractors and consultants.
EXISTING THIRD FLOOR
0’ 10’ 20’ 30’ 40’ 50’ PROPOSED 1st FLOOR
0’ 10’ 20’ 30’ 40’ 50’ PROPOSED 3RD FLOOR
0’ 10’ 20’ 30’ 40’ 50’ PROPOSED 2nd FLOOR
Masterplan and Future Development
Map 10: Phasing Proposal for Roosevelt High School
The development of this project, like many redevelopment projects, will be constrained by the site’s current conditions. Because of its historic nature, large areas cannot be demolished. Since the project is located in an economically depressed area, it is essential to consider the economic viability of the location as well. To address these challenges a comprehensive phasing plan should be developed to stabilize the area and prevent the displacement of the existing community. The goal of the phasing plan should provide a timeline for construction and a strategy for the economic revitalization of the area. For this project, I propose a three-phased approach to achieve economic and social stabilization after the project’s completion.
The area around Gary Roosevelt lacks essential amenities and services for residents. Providing housing would partially address some of these concerns. However, the absence of economic opportunities and amenities could jeopardize the project’s success. Market forces may hesitate to invest in the area due to the high perceived risk. Thus, the first phase will need to incorporate collaboration between the public and nonprofit sectors to begin to mitigate the area’s perceived risk and foster the conditions for more development.
This initial stage is critical for the project’s success but is often overlooked. Strong collaboration with local nonprofit groups will be vital. The focus should be on creating spaces for social services and addressing other economic deficiencies—such as the need for grocery stores and retail spaces, which would be invaluable in a food desert. Public sector support is also critical at this stage, as these spaces and amenities need to
be subsidized through grants or favorable loans to sustain the emerging microeconomy. Strategies must be developed to support existing residents and prevent their displacement as future economic growth occurs in the area. In Phase I, engaging with the Gary Housing Authority for project buy-in is essential since they control the land directly north of the project. This land currently includes recreational infrastructure that could be rehabilitated into a public park or outdoor sports facility. With both the recreational facilities and the rehabilitation of the high school completed anchor points for continued development may begin to emerge.
Phase II should continue to focus on providing commercial spaces, but with a shift in emphasis towards housing, depending on the area’s health. Given investors’ perceived risks, it may be necessary to offer subsidies or other incentives to attract them to the area rather than having the public or nonprofit sectors assume all the risk. Assuming conditions stabilize due to adequate government support, the area northeast of the site could be designated for mixed-use developments, retail, or housing. Since the City of Gary controls this area, it can strategically set up requests for proposals from developers and private entities to develop the land. This approach allows the city to negotiate additional requirements from the private sector before transferring property to them. Such agreements could be structured so that the city provides infrastructure improvements in exchange for commitments to maintain a certain percentage of affordable housing units or support specific initiatives in the area. During this phase, the public sector can begin to reduce its involvement in the area’s development while
leaving mechanisms in place that mitigates the displacement of existing residents.
In the final phase, which should align with the maturity of the stabilization efforts in the area, the large open space west of the site should be considered. However, since this phase is far in the future, the project’s phasing plan should remain flexible to accommodate the organic growth of the community. Ongoing discussions with the Gary Housing Authority will be essential in this last phase, as they control the most significant land parcels in the area to determine the community’s needs at the time. Depending on the economic and social conditions of the area in year five and beyond, more housing or retail could be developed. Ultimately, this final phase should be used as a point of revaluation to correct any issues that are developing. The challenges of community development in distressed neighborhoods are complex. While there isn’t a one-size-fits-all solution, the public-private partnership model provides a robust method to address many of these challenges. The development of Gary Roosevelt High School through the public-private partnership model underscores several key considerations essential for successful projects. Firstly, in economically depressed areas like Gary, Indiana, development projects may not be invested in by the private sector early on in the process. This hesitation can lead to a contraction of funding sources, resulting in inaction. These projects must start in the public or nonprofit sector. By leveraging public funding and grants, stabilization efforts can begin to take hold. Another critical point is the need for continued collaboration among
a diverse array of stakeholders. Many funding sources and commitments can only be obtained through competitive applications, which necessitate support from the community, nonprofits, and the buy-in of the developer.
While the partnership between the public and private sectors is essential for successful projects, it can inadvertently lead to the displacement of existing residents during later phases. To counter this, lead stakeholders need to establish strong mechanisms in the project that can mitigate the displacement. Strategies such as securing affordable housing within the development or imposing certain requirements on private developers can help ensure that current residents are not priced out of their neighborhoods. Lastly, successful projects will require strong technical staff through experienced developers or knowledgeable consultants to navigate all the applications and approvals.
The redevelopment of Gary Roosevelt High School is a challenging and complex problem to solve. Still, ultimately, through the private-public partnership model, it can be achieved and help revitalize its neighborhood and community by becoming the catalyst for strong community development.
Bailey , J., & Johnson, R. (n.d.). Indiana crossroads: Hoosier civil rights. www.digitalresearch. bsu.edu. https://www.digitalresearch.bsu.edu/digitalcivilrightsmuseum/items/show/57
Brown, A. (2024, January 10). Lilly Endowment readi award to focus on Arts, Blight Reduction. Inside INdiana Business. https://www.insideindianabusiness.com/articles/lillyendowment-readi-award-to-focus-on-arts-blight-reduction
City of Gary . (2017). City of Gary Redevelopment Commission Policies and Procedures. Gary .
City of Gary . (2024). City of Gary Zoning Requirements. Gary .
City of Gary . (n.d.). Hardest Hit Fund Blight Elimination Program. Department of Planning, Redevelopment, and Zoning. https://departments.gary.gov/redevelopment/demolitions/
Fox, O. (2023, January 21). Cost Drivers of Historic Adaptive Reuse Projects. MGAC. https:// www.mgac.com/blog/cost-drivers-of-historic-adaptive-reuse-projects/
Indiana Business Research Center at Indiana University’s Kelley School of Business. (n.d.).
InDepth Profile: STATS Indiana. StatsIndiana.edu. https://www.stats.indiana.edu/profiles/ profiles.asp
Indiana Business Research Center at Indiana University’s Kelley School of Business. (n.d.).
Indiana City/town census counts, 1900 to 2020. City and Town Census Counts: STATS Indiana. https://www.stats.indiana.edu/population/PopTotals/historic_counts_cities.asp
Indiana Department of Natural Resources. (2024, May 14). Federal Historic Tax Credit
Eligibility. Indiana Department of Natural Resources. https://www.in.gov/dnr/historicpreservation/financial-assistance/historic-tax-credit/eligibility/
Indiana Economic Development Corp. (2024). Indiana READI. Indiana Economic Development Corp. https://iedc.in.gov/program/indiana-readi/about#skip-header
Indiana Economic Development Corp. (n.d.). Redevelopment Tax Credit (RTC). Indiana Economic Development Corp. https://iedc.in.gov/indiana-advantages/investments/ redevelopment-tax-credit/overview#skip-header
Indiana Economic Development Corporation . (2023). READI 2.0 Policy Overview. Indianapolis
Indiana Landmarks. (2024, May 1). Gary Roosevelt named one of America’s most endangered historic places. https://www.indianalandmarks.org/2024/05/gary-roosevelt-named-oneof-americas-most-endangered-historic-places/#:~:text=Educators%20expected%20 students%20to%20be,the%20school%20into%20deepening%20decline.
Johnson, E. (2019, December 5). How the Indiana State Board of Education wasted $22 million on a failed turnaround at struggling Roosevelt College and Career Academy. The Chicago Crusader. https://chicagocrusader.com/how-the-state-wasted-22-million-on-afailed-turnaround-at-struggling-roosevelt-college-and-career-academy/
Koval, A. (2024, May 2). Gary’s Roosevelt High School named one of America’s most endangered historic places. WGN TV. https://wgntv.com/northwest-indiana/garysroosevelt-high-school-named-one-of-americas-most-endangered-historic-places/
Kukawsk, T. (2023). (rep.). Comprehensive Housing Market Analysis Gary, Indiana (pp. 17–21). Chicago, Illinois: Chicago HUD Regional Office.
Lake County Indiana . (2024a). Lake County Assessor’s citizen engagement site. Lake County Indiana . https://engage.xsoftinc.com/lake/Map/ GetParcelList?searchString=45-08-16-251-001.000-004
Lake County Indiana . (2024b). Lake County Assessor’s citizen engagement site. Lake County Indiana . https://engage.xsoftinc.com/lake/Map/ GetParcelList?searchString=45-08-16-251-001.000-004
Lilly Endowment. (2023, April 25). Grant Guidelines & Procedures. Lilly Endowment. https://
lillyendowment.org/for-grantseekers/guidelines/
Lilly Endowment. (2024, August 2). FAQ: Lilly Endowment Inc.. Lilly Endowment. https://lillyendowment.org/for-current-grantees/faq/#:~:text=The%20Board%20 of%20Directors%20considers,written%20notification%20of%20our%20 decisions.&text=Lilly%20Endowment%20Inc.,-2801%20N.
Pekarek , J., & Tatum, P. (2024, August 12). Preserving the story of Gary Roosevelt. Preserving the Story of Gary Roosevelt - Archives and Special Collections - LibGuides at Indiana University Northwest. https://libguides.iun.edu/archives/Roosevelt
RentData.org. (2024). Gary Fair market rent fy 2024 Gary, in HUD Metro FMR area rental data. 2024 Fair Market Rent in Gary. https://www.rentdata.org/gary-in-hud-metro-fmrarea/2024
Reuther, K. (2024, August 13). TurboTenant report: The best places to buy rental investment property in Indiana. TurboTenant. https://www.turbotenant.com/blog/turbotenant-reportindiana/
United States Department of Housing and Urban Development. (2023). 2023 HOME PROGRAM RENTS - STATE OF INDIANA . Washington DC.
U.S. Census Bureau. (n.d.). 2020 Decennial Census. Department of Commerce. https://data. census.gov/
U.S. Census Bureau. (n.d.). 2021 American Community Survey 5 Year Estimates
. Department of Commerce. https://data.census.gov/
U.S. Census Bureau. (n.d.). 2022 American Community Survey 1 Year Estimates
. Department of Commerce. https://data.census.gov/
U.S. Census Bureau. (n.d.). 2022 American Community Survey 5 Year Estimates
. Department of Commerce. https://data.census.gov/
US Department of Agriculture . (2023, July 6). Food Access Research Atlas. https://www.ers. usda.gov/data-products/food-access-research-atlas/go-to-the-atlas/
US Department of Housing and Urban Development. (n.d.). Using the historic tax credit for Affordable Housing - Hud Exchange. HUD Exchange . https://www.hudexchange.info/ programs/environmental-review/historic-preservation/tax-credit/
WNDU.com. (2024, May 1). Gary Roosevelt high school named one of “America’s most endangered historic places.” https://www.wndu.com. https://www.wndu. com/2024/05/01/gary-roosevelt-high-school-named-one-americas-most-endangeredhistoric-places/
Yardi Systems Inc. . (2024). Average rent in Gary & rent prices by neighborhood - rentcafe. Rent Cafe . https://www.rentcafe.com/average-rent-market-trends/us/in/gary/
Zillow . (2024, August 25). Gary, IN rental market. Average Rental Price in Gary, IN & Market Trends . https://www.zillow.com/rental-manager/market-trends/gary-in/
$