Everyone loves a story with a happy ending—adversity met with opportunity – bringing the two forces together to create something worth celebrating.
You don’t need to look much further than your cable listing guide to witness the growing popularity of transforming old buildings into something new. Popular shows such as HGTV’s Fixer Upper, Rehab Addict and A&E’s Flipping Vegas show viewers the possibilities of turning run-down homes into breathtaking living spaces.
This soaring trend is not isolated to the rehabilitation of family homes, as many developers are now turning their attention toward reviving beauty in urban settings by restoring historical buildings to their former glory, often fueled by historic tax credits offered up by state and federal entities.
A recent example can be found in Detroit, where a group of real estate and restaurant investors, including Michigan-based Schostak Bros. & Co., have announced plans for the redevelopment of the 6.2-acre Brewster Wheeler site at 2900 St. Antoine Street. This $50 million project includes turning the historic basketball court floor into a mixed-use development with a restaurant and meeting space, 100 to 150 residential units, and green space.
Also in Detroit, the Pepper Shoe Building, located at 1413 Woodward Ave. was recently acquired by Schostak Bros. & Co. The developer plans to convert the 117-year-old building into 42 loft-style apartments with 5,000 square feet of first-floor retail space. The redevelopment project is expected to cost $8.5 million.
In a recent article from Crain’s Detroit Business, Jeff Schostak, vice president and director of corporate real estate services for Schostak Bros., said the building’s 60,000-square-foot walls will be removed to combine it with the existing Lofts of Merchants Row, which is immediately to the north at 1425 Woodward (and also owned by Schostak Bros.).
Meanwhile, in Akron, Ohio, the former Goodyear Tire & Rubber Co. campus on the East end of town is undergoing a transformation into a “live, work, play” environment, courtesy of Industrial Realty Group, the California-based company that purchased the Goodyear campus.
The six-story building, which once housed the city’s most recognizable business, is now home to the East End Residence Loft Apartments, state-of-the-art office space, and a new Hilton Garden Inn Hotel. The development will also feature restaurants, retail, and theatre.
IRG was able to leverage federal tax credits to partially fund the project, and will therefore feature affordable apartment units. Redevelopment plans also include restoring and preserving much of the building’s original woodwork, adding to its historic appeal.
According to an article published by the Akron Beacon Journal, a recent event, including a visit by Akron’s own LeBron James, has inspired the developers to re-envision its plan for the restored gymnasium inside of Goodyear Hall.
Plans for the 20,000-square-foot gym and adjacent 1,500-seat Goodyear facility now include concerts and a recreational area where schools and sports leagues can play. The idea was born after the gym was used to host 1,500 people for a meeting of the Greater Akron Chamber, featuring James as a special guest.
The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. According to the National Park Service, the tax credit program is one of the nation’s most successful and cost-effective community revitalization programs, having leveraged more than $69 billion in private investment, while preserving nearly 40,000 historic properties since 1976.
Investors can apply for either a 20 percent income tax credit (if the property is deemed by to be a ‘certified historic structure’ by the Secretary of the Interior) or a 10 percent income tax credit if the building is non-historic.