lecture at georgia state university

A recent Historic Macon Foundation restoration

Restoring More than Buildings: Developing Economies and Communities

Through Historic Preservation

Thursday, February 16, 12

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

Why Preservation?



Soul of the Community



More than mansions



Living History Map

www.livinghistorymap.com


http://www.livinghistorymap.com

http://www.livinghistorymap.com


Preservation economics



A place worth loving


Historic Macon is best known for expertise in neighborhood revitalization, as proven by an Honor Award from the National Trust


National Awards


Each dot represents one of Macon’s historic buildings listed on the National Register of Historic Places

6,000HISTORIC BUILDINGS


National Register



Revolving Fund model




Grants andLoan funds





Purchase property





Purchase property

Rehabilitate property





Purchase property

Rehabilitate property

Sell property



“Cold” Market

•Huge proportion of community’s housing is sub-standard or vacant•Properties languish on market for long periods of time•Your community was cited nationally for low cost of housing•Housing prices range from $60-$80 per square foot for good quality housing•Most expensive house ever sold maybe $110 per square foot



Rehab and Sale



Rehab and Sale

•Cold Markets require acquisition, rehab and sale



Walkability


http://www.historicmacon.org



Tree Nursery

!



Dog Park



Second Sunday



Mercer Village



Control Development





Huguenin Heights



Huguenin Heights

• Four square blocks



Huguenin Heights

• Four square blocks• Bounded by Interstate, two major collector roads and a public park



Huguenin Heights

• Four square blocks• Bounded by Interstate, two major collector roads and a public park• 16 projects completed over five year period



Acquisition

1211 Ross St.Sold for $158,0001,900 sf=$83/sf

1295 Ross St.Possible Rehab project

1268 Ross St.Sold for $130,0001,500 sf=$87/sf

1525 Coleman Ave.Sold for $130,0001,510 sf=$86/sf



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



Acquisition



Acquisition

Now think about acquisition:



Acquisition


•What are the costs to repair the home?



Acquisition


•What are the costs to repair the home?•What is the cost of the money to be used for the repair?



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?



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?



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?



Acquisition



Add up all those costs and subtract from $174,300



Acquisition



Add up all those costs and subtract from $174,300

Now, what can you afford to pay for the house?



1295 Ross St.- Before



1295 Ross St.- After



Acquisition



Acquisition

Creative acquisition strategies:



Acquisition

Creative acquisition strategies:• Donation from City instead of tear-down or condemnation



Acquisition

Creative acquisition strategies:• Donation from City instead of tear-down or condemnation• Speculative donation from City to increase property tax



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



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



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



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



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



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



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



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



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?



Huguenin Heights



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.



Know your market



Know your market

Who is buying?



Know your market

Who is buying?72% Younger singles and couples without kids



Know your market

Who is buying?72% Younger singles and couples without kids17% Empty nesters and retirees



Know your market


What are they buying?



Know your market


What are they buying?Highly finished detached homes between 400 and 2,000 square feet



Know your market



How much house to their incomes support?



Know your market



How much house to their incomes support?An average of $125,000



Partnerships



Partnerships

•City of Macon benefits from reduced crime, reduced police responses, reduced fires



Partnerships

•City of Macon benefits from reduced crime, reduced police responses, reduced fires•Rehabilitation eliminates need and cost of tear-downs



Partnerships

•City of Macon benefits from reduced crime, reduced police responses, reduced fires•Rehabilitation eliminates need and cost of tear-downs•Increased property taxes



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



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



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



Partnerships



Partnerships

•Mercer University needs increased campus security



Partnerships

•Mercer University needs increased campus security•Fences and patrols cannot provide the same security as a safe neighborhood



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



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



Partnerships



Partnerships

•Area’s largest employer



Partnerships

•Area’s largest employer•Employs over 1,000 nurses



Partnerships

•Area’s largest employer•Employs over 1,000 nurses•Nursing turnover averages 10% per year



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



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



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



Partnerships

9%

9%

9%

26%

47%

Historic Macon Foundation Knight Foundation City of MaconMercer University Housing Authority



Partnerships

9%

9%

9%

26%

47%

Historic Macon Foundation Knight Foundation City of MaconMercer University Housing Authority

•$2 million total



Format



Format

$800,000 ($250,000 pending match)- Cash



Format

$800,000 ($250,000 pending match)- Cash (Knight Foundation grants, previous grants released from restriction and restricted by Board)



Format


$700,000- Loans against our endowment at 4.75% interest only



Format



$500,000- Loans at $2/sf guaranteed developer’s fee



Format



$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)



In-Kind



In-Kind•Scana Energy, Gas plumbing for gas log fireplaces and stove, $1,000



In-Kind•Scana Energy, Gas plumbing for gas log fireplaces and stove, $1,000•Lafarge Concrete, pervious concrete, $2,500



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



Engage the public



Creative Contracting



Creative Contracting1. 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






4. Commit to multiple projects at bid price without re-bid

5. Hire likely in-kind donors when the budget allows



Marketing



Marketing

•90% of buyers come from the web



Marketing

•90% of buyers come from the web•All properties are listed in MLS with a Realtor



Marketing

•90% of buyers come from the web•All properties are listed in MLS with a Realtor•Pay for Google Ad Words



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



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



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


Even the National Association of REALTORS says:•“Two-thirds of Americans now see being within easy walking distance of places in their community as an important factor in deciding where to live”•“The coming demographic convergence will push construction inward, accelerating the rehabilitation of cities...”


REALTORS




13%

39%

48%

Households with Children Households without ChildrenSingle person households

U.S. Household Distribution in 1960


28%

45%

27%

Households with Children Households without ChildrenSingle person households

U.S. Household Distribution in 2030 (projected)


0

15

30

45

60

Households with Children Households without Children Single Person Households

1960

2000

2030

Suburban Urban Small-lot Urban Loft



Real Estate Changes

NEW URBANITY: THE RISE OF A NEW AMERICA, By ARTHUR C. NELSON, The Annals of The American Academy of Political and Social Science November, 2009626 Annals 192




• Demographic changes in the U.S. will require a vast increase in urban housing options


Real Estate Changes






• Between 2010 and 2030, four in five new homes needed to accommodate household growth will be for households without children


Real Estate Changes







• To meet the emerging demand for the new urbanity, roughly 44.5 million new attached and small-lot detached units will need to be built between 2007 and 2020


Real Estate Changes








• Up to 27 million large-lot units may be surplussed by 2020


Real Estate Changes








• Up to 27 million large-lot units may be surplussed by 2020• Most buyers would be willing to accept a home with

smaller square footage for one with a higher level of finish


Real Estate Changes






Incentives for homes




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.

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 pre-rehabilitation value

25%-30% state tax credit ($100,000 max)

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.


CASE STUDY

Purchase a home with tax credits in place


Homes


Restored homes from Historic Macon Foundation

include tax credits

Homes



include tax credits

This home at 980 Maple St. included frozen property taxes at $200 per year and $30,000 in state income tax

credits.

Homes



include tax credits

This home at 980 Maple St. included frozen property taxes at $200 per year and $30,000 in state income tax

credits.

The net monthly cost to own this $135,000 home is

$500 per month

Homes


HomesHistoric home

Any other home

House Price $135,000 $135,000

Down Payment $4,725 $4,725

You Get a Raise! $2,700/year $0

Reduced Property Tax $205 $2,260

Total Savings $44,480 $0

Total Monthly Cost $500 $1,160


Down Payment Assistance



The City of Macon offers down payment assistance up to $25,000 for people of low

to moderate incomes




to moderate incomes

Mercer University offers $20,000 to all employees for

down payments




to moderate incomes

Mercer University offers $20,000 to all employees for

down payments

Georgia Dream can offer $5,000 to $7,500 to help with

down payment and closing costs


HomesHistoric home

Any other home

House Price $135,000 $135,000

Down Payment -$45,000 $4,725

You Get a Raise! $2,700/year $0

Reduced Property Tax $205 $2,260

Total Savings $99,480 $0

Total Monthly Cost $400 $1,160


Sales Sheets


Historic Macon has rehabilitated more than 150 historic buildings•Creating over 2,000 construction jobs•Investing $12,000,000 in historic building restoration


Neighborhood Revitalization


$0

$3,750,000.00

$7,500,000.00

$11,250,000.00

$15,000,000.00

Year 1 Year 2Year 3

Year 4Year 5

Year 7 Year 8

Year 9

Historic Macon’s projects Average increase


Economic Development


Additional $141,500.00In property taxes EVERY year


Creating New Taxes


0

25

50

75

100

Crim

e Rate

Huegenin Heights

Tattnall Square HieghtsNeighborhood

Crime Eliminated Downtown

Before RevitalizationAfter Revitalization

Crime dropped 80% in Huguenin Heights and 50% in Tattnall Square Heights thanks to Historic Macon’s investments


Reducing Crime


Historic Macon helps save the environment•Rehabilitating old homes is better for the environment than building new•Saving houses has kept 20,000 TONS of debris from entering the landfill

140 Buildings =

20,000 TONS of debris=

The weight of…

1,810 school buses


The Environment



Days on Market

0

28

55

83

110

Historic Macon National Average

Days on Market



Property Tax Profit

0

5

10

15

20

Suburban development Historic preservation

Profit margin on taxes Cost to service



1295 Ross St.- Before



1295 Ross St.- After



1035 Elm St.- Before



1035 Elm St.- After



Interior- Before



Interior- After



Interior- Before



Interior- After



New Construction


THE MOST IMPORTANT LESSON!

Every piece of real estate has a terminal value:

• For single family residential units (houses), the value is based on recent comparable sales from the area (comps) based on price per square foot (nothing else you do will raise this price)

• For income-producing projects (offices, apartments, retail space) the value is based on the amount of rent that the property brings in every year

• If you cannot complete a project on a budget that is less than the property's terminal value, then DON'T DO IT!

Real Estate Development





1295 Ross St.

2,100 sf, 3br., 3ba, 1880s Victorian

Houses in the area that sold recently (comparables):

1211 Ross St.- 1,900sf, sold for $158,000$83/sf

1268 Ross St.- 1,500sf sold for $130,000 $87/sf

1525 Coleman Ave.- 1,510sf sold for $130,000$86/sf


Sample Valuation




1295 Ross St.

What will the house be worth when you finish rehabilitation?

Average sale price is $85/sf but the largest comparable is 200sf smaller and prices per

square foot are progressively less the larger the house.

In fact, houses over 1,500sf loses $1 in value for every 100sf added

So 1295 Ross St. is 2,100sf, 600sf more than our best comparable at 1,500 so we'll reduce that price by $6/sf, resulting in a

comparable of $81/sf and multiply by 2,100

2,100 sf x$81/sf

$170,100


Sample Valuation





980 Maple St.- Before



980 Maple St.- After


Once you know the maximum value of the property to be rehabilitated, you can work into your budget backwards. Everything you spend must

cost less than the maximum sales price, including:

l Construction costsl Interest expenses (loan fees and interest)l Insurancel Property taxesl Realtor feesl Developer feesl Landscaping


Beall’s Hill




Real Estate professionals use specialized budgets called “pro formas” including at least three parts:

1) Construction Costs2) Soft Costs3) Summary


Budgeting





Budgeting





Beall’s Hill





Revitalized --> Not Revitalized



Completed Project

Under Construction

Begins in <30 days



Why Preservation?



Demolition by neglect



Facts




• Preservation consultant by-passed design review, instead getting the municipal court to order demolition as an immediate threat to health and safety


Facts




• Preservation consultant by-passed design review, instead getting the municipal court to order demolition as an immediate threat to health and safety• Rehabilitation will cost at least $800,000


Facts




• Preservation consultant by-passed design review, instead getting the municipal court to order demolition as an immediate threat to health and safety• Rehabilitation will cost at least $800,000• Value at sale will be around $500,000


Facts




• Preservation consultant by-passed design review, instead getting the municipal court to order demolition as an immediate threat to health and safety• Rehabilitation will cost at least $800,000• Value at sale will be around $500,000• You have about a month to intervene


Facts




• Preservation consultant by-passed design review, instead getting the municipal court to order demolition as an immediate threat to health and safety• Rehabilitation will cost at least $800,000• Value at sale will be around $500,000• You have about a month to intervene• You have access to a $1 million line of credit


Facts




• Preservation consultant by-passed design review, instead getting the municipal court to order demolition as an immediate threat to health and safety• Rehabilitation will cost at least $800,000• Value at sale will be around $500,000• You have about a month to intervene• You have access to a $1 million line of credit• What do you do???


Facts





But there are still mansions...


Josh Rogers, Executive [email protected]

phone 478-742-5084 • fax 478-742-2008email [email protected] • site www.historicmacon.org


mailto:[email protected]




http://www.historicmacon.org/

http://www.historicmacon.org/

lecture at georgia state university

Documents

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