Retired, Rehabbed, Reborn

Robert Simons, Gary DeWine, Larry Ledebur

• Publisher: The Kent State University Press
• Year: 2016
• Print ISBN: 9781606352564
• eBook ISBN: 9781631012549
• Topic: Architecture
• Subtopic: Architecture General

Each year in the United States, hundreds of religious buildings and schools become vacant or underutilized as congregations and populations merge, move, or diminish. These structures are often well located, attractive, eligible for tax credits, and available for redevelopment. In this practical and innovative handbook, authors Simons, DeWine, and Ledebur have compiled a step-by-step guide to finding sustainable new uses for vacant structures. The reuse of these important buildings offers those charged with revitalizing them an opportunity to capture their embodied energy, preserve local beloved landmarks, and boost sustainability. Rehabbing presents an opportunity for developers to recoup some value from these assets. Neighbors and other stakeholders also enjoy benefits as the historic structures are retained and the urban fabric of communities is preserved.

Retired, Rehabbed, Reborn features ten in-depth case studies of adaptive reuse outcomes for religious buildings and public schools that have achieved varying degrees of success. Several case vignettes appear within various chapters to illustrate specific points. The book is a useful tool for architects, planners, developers, and others interested in reusing these important structures. In addition to covering the demographics of demand and supply for historic buildings, the authors demonstrate how to identify a worthy project and how to determine a building's highest and best use, its market potential, and its financial feasibility, including costs and public subsidies. Finally, they address the planning process and how to time the redevelopment and repurposing of these venerable buildings.

Simons, DeWine, and Ledebur explain that while each rehab deal is unique and tricky—especially for prominent community structures that hold significant nostalgic and historical value to community stakeholders—there are identifiable patterns of successful and unsuccessful approaches, patterns that are addressed in turn throughout the redevelopment process.

As the nation moves toward a mind-set and practice of recycling, reusing, and repurposing, this unique exploration of how that applies to buildings is an essential guide for anyone interested in being part of the process as communities develop and change.

1

INTRODUCTION

Robert A. Simons

Purpose and Scope

This book is addressed to developers, planners, architects, public officials, and not-for-profit community organizations, school district real estate administrators, and owners and managers of religious buildings. The subject at hand is finding sustainable new uses for religious buildings in the United States. While the focus is on these religious buildings, the lessons found in this book may also be applied to other vacant or underutilized public and institutional structures and school buildings that face many of the same problems and challenges.

There is a considerable backlog of underutilized, abandoned, or otherwise empty churches and other religious buildings in the United States. Every year over one thousand religious buildings become vacant in the United States. At the end of 2008, more than thirteen hundred churches and religious buildings in the United States were for sale (CoStar 2008). The market absorbs some of them, but others may languish for years. The formerly religious structures are often well located, prominent, attractive, eligible for tax credits, and available for redevelopment. The reuse of these important structures also offers an opportunity to capture their embodied energy, and their intrinsic and historical features boost the goal of sustainability. In general and especially in hard economic times (at press time, 2009–13), rehabbing these desirable structures may present a profitable opportunity for developers and permit sellers to recoup some value from these assets. Neighbors and other stakeholders may also be better off as historic structures are retained and the urban fabric of our communities is preserved. Redevelopment of churches is also sustainable and “green” because existing resources are better utilized, and their typical location (central city or suburbs) is consistent with infill development, and hence discourages urban sprawl.

This book is a tool for developers and others interested in reusing these important buildings. Often the structures are prominent, and have substantial nostalgic and historical value to former users and other community stakeholders. These characteristics present unique opportunities and potentially higher marketing success, but may also impose some additional constraints, such as neighbors’ “Not in My Backyard” concerns, known to developers as “NIMBYs.” Each rehab deal appears to be unique and tricky, but, as we show, there are identifiable patterns of successful and unsuccessful approaches. These patterns are addressed in turn throughout the redevelopment process. Ten separate case studies of adaptive reuse outcomes for religious buildings and public schools that have achieved varying degrees of success are also featured. In addition, several vignette mini-cases appear within various chapters to illustrate specific points.

The goal of this book is to increase the ease with which private and not-for-profit developers can identify, conceptualize, acquire, redevelop, and profitably market religious buildings for adaptive reuse. However, there is a public or social aspect to sustainability and to the preservation of these special structures, and for many people saving these structures goes well beyond dollars and cents. Chapter 9 is devoted to this theme, but this theme is also woven throughout this book.

The book is divided into four parts. The first section, comprising the first two chapters, provides historical background and context. It addresses underlying trends and typical redevelopment processes for religious buildings (primarily churches), and presents statistical results of several hundred redevelopment project outcomes. The second section, with five chapters, addresses the steps needed to establish that a project is feasible in practice. These steps include: assessing the design needs and market potential for the project, conducting a financial analysis and obtaining financial backing, and securing planning approval as needed. The third section has three chapters that, in turn, question whether the real estate market is the only viable approach to redeveloping religious structures, examine a trend of converting secular structures to sacred ones (e.g., conversion of commercial space to churches), and systematically review the case studies examined in this book to provide policy considerations and lessons learned. The fourth section gives detailed financial and redevelopment case studies for ten projects or development situations, several of which have multiple components or phases. While we focus largely on formerly religious buildings, we also include three cases of rehabilitated schools, primarily to illustrate the utilization of historic preservation tax credits, and to examine more closely the potential for negative financial outcomes.

Background Trends Section

The background information presented in this section helps lay the foundation for understanding the complex real estate development opportunity offered by adaptive reuse of sacred buildings. As will become apparent, one key to making these projects economically viable is to acquire them at the lowest possible cost. Thus, developers need to know the context of the opportunity for property acquisition, and this means understanding trends in religious observance. Developers must also understand the economic and political perspectives of the sellers of these specialized buildings in order to time their acquisition effectively. The successful project, we have found, begins before the building is available. These chapters therefore suggest ways that a developer can anticipate opportunities to purchase a building for reuse.

Furthermore, developing a new line of real estate project expertise, in this case merchant rehabbing, has a steep learning curve. There is a huge amount to be learned, and developers must assess their fixed cost (both financial capital and human capital) in learning the ropes for this tricky niche market. Doing one of these deals may not make sense: doing five deals might.

Chapter 2 provides background on religious activity in the United States as it relates to the supply and demand for religious buildings. More than 80 percent of the U.S. population is affiliated with a religious faith, but the religious landscape is not static. As this chapter explains, changes both in the total membership of different religious denominations and in the size and composition of congregations within them affect the number of sacred buildings available for reuse, while interdenominational variations in the relationship between individual congregations and their denomination’s leadership bodies affect when and how the owners of a sacred structure will dispose of it if it can no longer serve its original purpose. However, successful reuse of a building also depends upon adaptation to the demographic and underlying economic factors in the community in which it is located. Filtering of religious building stock and the economics of the process by which religious buildings change use are also addressed. This includes different denominations’ increasing expenses, local demographic changes in congregations, and consolidation of congregations.

Chapter 3 provides statistical analysis of a data set of more than two hundred rehabilitated religious building and school projects in the United States to determine what locational factors and building attributes are associated with different types of development projects. It features a type of regression analysis (multinomial logit) in which the dependent variable is development outcomes (condo, apartment, retail, office, and cultural use), and independent variables include religious denomination, area demographics, building characteristics, and locational factors. The chapter identifies several factors that are good predictors of successful outcomes. Some information about the spot market for religious buildings (from CoStar) is also analyzed.

Practical Feasibility Section

Chapter 4 addresses the architectural factors to consider in rehabbing religious buildings. It examines issues such as religious design, energy use, parking and construction, and the implications of these issues for associated excess costs. The chapter features an experienced rehab architect’s walk-through checklist for a potential project, as well as several relative cost analyses that compare rehab projects to new construction for both residential and non-residential projects. Finally, it briefly addresses the operating cost differentials between new and rehab projects.

Chapter 5 discusses two techniques for conducting market analysis on religious building rehab projects: “highest and best use” analysis and “market niche” analysis. The chapter provides a tutorial of each technique followed by examples of its application to four possible rehab outcomes: conversion to condominiums, conversion to residential apartments, reuse for commercial purposes, and cultural reuse. These analyses integrate market demographics, location and traffic factors, and building and lot characteristics to determine best outcomes for several different types of property.

Chapter 6 is the financial toolbox chapter. It covers the basics of a project’s financial structure that may be applied to the rehabilitation of religious buildings, including debt, equity, construction loans, and permanent financing. Because many of these deals involve public/private partnerships, the chapter also addresses the following topics: joint ventures, public loans and grants, HOME funds, community development block grants (CDBG), U.S Department of Housing and Urban Development (HUD) direct loan program, nonprofit foundations, historic preservation tax credits (HPTC), low-income housing tax credits (LIHTC), historic easements, bank loans, New Market Tax Credits, property tax abatement, brown-field funds, loan guarantees, tax increment financing (TIF), revenue bonds, general obligation (GO) bonds, and Economic Development Administration (EDA) funds.

Chapter 7 is also a financial analysis chapter, but it looks beyond individual financial tools and provides integrated examples of redevelopment. It includes spreadsheets featuring pro forma cash flow and related models. Sample financial models and discounted cash flow analysis for different types of religious building projects are also provided. Examples include a church-to-condo build out and sell-off project and the conversion of a former school to apartments with historic preservation and low-income housing tax credits. This latter example is provided because many religious building campuses also include school buildings.

Chapter 8 sets forth an overview of the planning-approval process and then focuses on potential off-site impacts and winning community approval. Other topics covered include zoning and rezoning, code compliance, and dealing with property sellers, planners, NIMBYs, neighbors, and historic preservation advocates. The chapter uses several vignette mini-cases to illustrate both positive and negative implications of the rezoning process.

Policy Section

Chapter 9 addresses adaptive reuse issues affecting the community, including factors related to landmarks and historical status, the integrity of the urban fabric, and public subsidy decisions. While this book generally seeks to further the ease with which the private market can identify, conceptualize, acquire, develop, and profitably market the adaptive reuse of religious buildings, this chapter recognizes that these special structures often carry a public or social value that goes beyond dollars and cents. It features a case involving religious to secular adaptive uses.

Chapter 10 addresses the other side of religious to secular transformations, i.e., the process of changing secular uses to religious ones. This chapter looks at the phenomenon of megachurches, including the reuse of shopping centers, patterns of development and potential reuse, demand, size, zoning, and land use issues.

The final analytical chapter (Chapter 11) summarizes the findings and lessons learned from the case studies conducted for this book. It methodically examines ten former religious buildings and schools that were redeveloped into residential uses or commercial/cultural projects. While the cases generally focus on the projects themselves, this case study chapter focuses on particular issues related to the adaptive reuse of schools and churches. For example, particular cases look at the hierarchical disposal process for certain religious buildings, developer and nonprofit teaming, and a large master planned project. Separate tables analyze common elements in the financial, physical, and locational aspects of the cases. The final part of this chapter was developed with input from all the authors. It addresses lessons learned and policy recommendations that flow from this book for developers, community religious leaders, school administrators, and urban planners. These distilled lessons should enable interested parties to approach rehabilitation of these deals with realistic expectations, assist in avoiding common pitfalls, and increase the chances for project success.

Case Study Section

The book concludes with ten case studies of projects that have attained partial or full success. The case studies were composed by their authors using fieldwork, photos, financial outcomes (usually accompanied by a summary table), and interviews with developers. We considered several factors when selecting which projects to highlight for case studies. First, the case studies all include data drawn from individuals with direct knowledge of the project. Each case has been reviewed by either the developer or other key individuals involved in each project, and several cases have been reviewed by multiple stakeholders. Second, although Ohio is the focal area of these case studies (represented by three projects within the state and one from nearby Buffalo, New York), the data set used in the statistical analyses within this book is national. We therefore include a range of geographically diverse case studies, including urban cases from New York City, Boston, and St. Louis, one from New Mexico, and two from Arkansas: one from the small town of St. Joseph, Arkansas, and one from Little Rock and Hot Springs. Third, the case studies, which include both Catholic and Protestant churches and three repurposed public schools, cover a variety of property types that become available for reuse. Finally, they illustrate both the range of financing mechanisms available for repurposing religious structures and the spectrum of possible financial outcomes.

Most of the edifices discussed were classified as historic landmarks within their communities. Each case study, in general, has both common characteristics and unique features that made the adaptive reuse plan either successful or unsuccessful. Some plans were well developed and benefited from favorable market conditions and quick absorption, while others still struggle with financial difficulties and are unfinished, or were unable to attain the vision of the property that the developers hoped for.

Chapter 12: Red Door Church, Cleveland Heights, Ohio

This former Lutheran church in Cleveland Heights, Ohio, was advantageously located in an area with immediate access to museums and hospitals. The church was built in 1932 on a 1.5-acre lot and a school wing was added later. The vacant but attractive, well-maintained gray stone church building with a red door was put on the market for sale and sold to a private developer. The adaptive reuse plan converted this church building into five rehabbed condominiums, with an additional fifteen new residential condominiums on the oversized lot. The total development cost was about $8 million. The project hit the market window and the rate of return to the developer was positive.

Chapter 13: Jamaica Performing Arts Center, Jamaica, Queens, New York

The empty First Dutch Reformed Church in Queens, New York, built in 1859, was adaptively reused and redeveloped as the 18,000-sq.-ft. Jamaica Performing Arts Center (JPAC). The redevelopment plan provided high-quality cultural services to the community under the sponsorship of the city of New York Department of Cultural Affairs. Unlike other case studies in this book, this project was not profit-driven, and raised $20 million in capital and operating subsidies mostly from city sources. The city leases this stunning gem to the nonprofit operator for just $1 per year.

Chapter 14: Urban Krag, Dayton, Ohio

The Deutsche Evangelical Reform Church sat empty for almost twenty years before it was converted to the Urban Krag Rock Climbing Gym during the 1990s. Local residents recognized the importance of having a s...

Table of contents

• Cover Page
• Halftitle Page
• Title Page
• Copyright Page
• Contents
• Preface
• Acknowledgments
• 1. Introduction
• Background Trends
• Practical Feasibility
• Policy
• Case Studies
• Glossary
• Index