Here’s a challenge: close your eyes and try to imagine a building or business in your city or town that has been abandoned.
What does it look like? How old is it? Have you been around long enough to know its story? What did it look like before? What was it before its demise?
Now, how often do you drive right past and not think twice about it?
Would restoring the place improve your community?
ONB Community Equity is a division of Old National Bank tasked with exactly that: discovering investment and revitalization opportunities across our footprint. The group’s work is a vital component of our community development efforts to build and strengthen the communities we serve.
So, when Chip Windisch, a member of the ONB Community Equity team first saw an enormous, dilapidated old orphanage in Marquette, Michigan, he did all but ignore it.
The roof was caved in. The windows were boarded up. But a Marquette-based architect, Barry Polzin, assured him the building was special.
Sure enough, when Chip and Marty Richardson, Community Equity team member, were meeting with the Historic Architect for the Michigan State Historic Preservation Office, Rob McKay, the old building, which they learned had been called the Holy Family Orphanage, resurfaced.
The orphanage was the first property Rob mentioned when the group discussed endangered buildings in Michigan, with the potential to benefit from the unique investment and tax-credit opportunities facilitated by the Old National Community Equity Group.
When the group began strategizing the development plans with Marquette-based developers Home Renewal Systems, they learned very quickly the total cost to save the old orphanage would be substantial.
Image by LaBelle Photos.
The Grandview Marquette Project - by the numbers
$16 Million - Total Project Budget
$11.5 Million - Construction and tax credit bridge loan from Old National
$8.9 Million - Low-Income Housing Tax Credit equity investment by Old National
$3.9 Million - Low-Income Housing Tax Credit equity investment by InSite Capital
$2.4 Million - Historic Tax Credit from Old National
$600,000 - Permanent loan from Old National
$100,000 - Original cost to build Holy Family Orphanage in 1915
75,000 sq ft. - Building Size
56 - Total Affordable Apartments
14 - Supportive Housing Apartments
And all parties had the same vision: affordable housing for the Marquette community. The proposal? A 56-unit apartment complex called Grandview Marquette, with 14 units reserved for households for the homeless, disabled or those with special needs.
With Marquette being a college town, and the influx of higher income housing, much of what would traditionally be affordable housing had long since been converted to accommodate the need for student housing. This left a vital need in providing low- and moderate-income families an affordable place to live.
However, at a projected $16 million dollars to restore the building, dividing that into livable apartments without the structuring and investment benefits from Old National, costs would be in the hundreds of thousands of dollars per apartment to simply pay back that sizeable a loan.
But Chip and Marty both knew the Community Equity Group could finance the project if they got creative.
Converting the orphanage to affordable housing proposed substantial tax incentives. The team could marry the Affordable Housing and Historic Tax Credit incentives in a unique structure called the Master Lease Pass-Through.
Investment in the tax credits, along with construction and permanent loans, generated the capital needed to complete the project.
Old National partnered with HRS, investment partner InSite Capital and Community Action Alger-Marquette (CAAM) to bring the project to life.
CAAM provides public services by offering transportation, healthcare, credit counseling and job programs to eligible residents.
The U.S. Department of Housing and Urban Development conditionally awards assistance vouchers to qualifying individuals who benefit from services provided by CAAM.
Creative financing to help communities grow
The Grandview Marquette project is just one example of community development lending and equity investment solutions provided by Old National. Learn more about our business focus on providing affordable housing and driving economic development.
The orphanage, built in 1915 and vacant since 1981, will re-open as the Grand Marquette Apartments in the fall of 2017, providing housing and these supportive services for low- to moderate-income families and individuals.
Chip Windisch says, as a community bank, it’s the exact work Old National should be doing, and it is why he is proud to be a part of the Community Equity team.
"This isn't cookie-cutter stuff; you need an aligned team. The support we receive from the entire bank is why this works. With everyone working together, we can finance complicated projects with tremendous impacts."
This, and similar investment projects, hit at the core of who we are as a community bank. Historical buildings are being saved from demolition, and in doing so, communities are being revitalized.
Also read Chip Windisch's blog post: 100-Year-Old, Abandoned Orphanage Returns to LIfe
Top image by Barry Polzin of Barry J. Polzin Architects
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