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Appendix 1 - Buildings 38, 39, 40, & 41: A Case Study in Adaptive Reuse
from BOARD & BATTEN THE LEGACY OF KIRKBRIDE AND THE THERAPEUTIC LANDSCAPE
by University at Buffalo School of Architecture and Planning, University at Buffalo
Appendix Buildings 38, 39, 40, & 41: A Case Study in Adaptive Reuse
Figure 1:
Advertisement
Building 38 west facade
Source: Nicholas Anto
Figure 2:
Interior of Building 38
Existing Conditions
Building: 38 - Female Ward J
Description: This is a brick masonry building located at the western most part of the complex. It has a basement, one wood-framed floor, and one wood-framed attic. The building consists of a stone foundation, gable cap stones with decorative scroll carvings, belt courses, sills and window mullions. The floor framing requires the most repair. 1 Figure 1 shows new stabilization in the form of metal wire adhered to the brick, most likely to stop it from crumbling.
Condition:
Interior: Roof leaks and broken internal downspouts have rendered damage in the interior. There is plaster failure on all of the walls, peeling paint, rusted tin ceilings, and cracked plaster ceilings. The interior has plain cornices and wood moldings, as well as a fireplace made of unfired brick. 2
Stone: Minor spalling, soiling, and algae growth on the surface of the foundation. 3
Brick: In some areas, the brick has collapsed and there is evidence of rebuilt brick. In most areas, the brick has atmospheric soiling, spalling, and algae growth. There is deterioration on the original mortar and the repointed mortar. 4
Porches: There is an iron porch in Figure 1 that is in poor condition because of rusting steel and a collapsing concrete floor.2 There is also a wooden neo-classical style porch that is in poor condition due to wood deterioration and partial collapse. 5
Roof: The roof is asphalt 3 tab shingle with copper flashings and it is in poor condition. There are a few missing shingles, but no open holes. There are wooden overhanging eves with decorative rafter tails that hang over the edge of the building. 6
Windows: The basement and first floor windows are
covered with plywood and the attic windows are left open. Most of the window panes are broken. 7
Figure 3: Porch on the east side of Building 38
Source: Nicholas Anto
Figure 4:
Building 39 north facade
Source: Nicholas Anto
Figure 5:
Interior of Building 39 Description: This is the next building to the right of Building 38 and consists of a basement, 2 floors, an attic, and 2 sets of double decker iron porches. It is a brick masonry building with wood-framed floors, a stone foundation, gable cap stones with decorative scroll carvings, beltcourses, sills and window mullions. The roof is unique because it is the only remaining slate roof with copper gutters and flashings. There are 2 wood and copper ventilation cupolas on the roof that are in poor condition, shown in Figure 4. This building is also unique for its copper finial. This building is in the worst condition in the complex. 8
Condition:
Interior: There is severe structural instability in some of the rooms in this building. There is plaster failure on all of the walls, peeling paint, rusted tin ceilings, and cracked plaster ceilings. The interior has plain cornices and wood moldings, as well as a fireplace made of unfired brick. 9 All shown in Figure 5.
Stone: Minor spalling, soiling, and algae growth on the surface of the foundation. 10
Brick: There are large areas of exterior brick collapse and large areas of rebuilt brick that is deteriorating. In most areas, the brick has atmospheric soiling, spalling, and algae and ivy growth. There is deterioration on the original mortar and the repointed mortar and the joints between the gable stones are exposed. 11
Porches: The iron porches are both in fair condition. They are experiencing minor rusting. These can be seen in figure 6. 12
Roof: The original slate roof is failing in many locations and there are large patched up holes. The roof still has the original copper valleys, gutters, cupolas, and wooden overhanging eves with decorative rafter tails. 13
Windows: Most of the window panes are broken on all floors. Plywood covers the basement and first floor windows. The second floors windows have iron bars installed
and the attic windows have no covering at all. 14
Figure 6: Porch on the north side of building 39
Source: Siera Rogers
Figure 7:
Building 39 north facade
Source: Nicholas Anto
Figure 8: Porch on building 40 showing ghosting of the original
Description: This is the next building to the right of Building 39 and consists of a basement, 2 floors, an attic, and 2 sets of double decker iron porches. It is a brick masonry building with wood-framed floors, a stone foundation, gable cap stones with decorative scroll carvings, beltcourses, sills, and window mullions. 15
Condition:
Interior: The damage is limited on the interior and thus it is in good condition. Two rooms on the second floor have limited instability. There is peeling paint, rusted tin ceilings, and cracked plaster ceilings. The interior has plain cornices and wood moldings, as well as a fireplace made of unfired brick with a nice carved detail on the mantle shown
in Figure 7. 16
Brick: The brick exterior seems to be in good condition on this building. In some areas, the brick has atmospheric soiling, spalling, efflorescence, and algae and ivy growth. Large areas of rebuilt brick are beginning to deteriorate. The joints between the gable stones are exposed and some mortar joints are beginning to deteriorate. Some step cracking is also occurring in the brick and stone. There is original red mortar visible in the porch area. 17
Porches: The porches are in fair condition with some rusting.1 In the porches, there is evidence that they were expanded at a later date due to the ghost lines shown in Figure 8.
Roof: The roof is covered in asphalt 3 tab shingles and seems to be in good condition. There aren’t any open holes. The roof has the original copper valleys and flashing and wooden overhanging eves with decorative rafter tails. These
Windows: Most of the window panes are broken on all floors. Plywood covers the basement and first floor windows. The second floors windows have iron bars installed
and the attic windows have no covering at all. 19
Figure 9: Exterior of building 40 on the north side
Source: Siera Rogers
Figure 10: Brick deterioriation on the west facade of building 41
Source: Nicholas Anto
Figure 11: ing 41
Interior condition of buildDescription: Built in 1930, Building 41 is a 4-story traditional masonry building directly behind and in the middle of Building 40 and Building 42. This building has a concrete foundation and brick bearing walls. There are steel columns supporting steel beams for the interior framing and the flooring is a mixture of slab-on-grade and concrete slabs cast on extruded mesh. The lintels over the windows and
doors are formed by brick jack arches. The window design and brick condition can be seen in Figure 10. The exterior also has sandstone cornice, beltcourses, keystone, quoins, and sill. The condition of the roof is currently unknown. 20
Condition:
Interior: There are some areas of the floor framing that require reinforcing. This building has the most open uninterrupted interior space in the whole undeveloped complex. The large spaces are unique to the complex and there are a variety of ways that they can be reused. Shown in Figure 11, the interior looks to be deteriorated like all of the other spaces.
Brick: The exterior is in good condition, with minor mortar erosion, efflorescence, soiling, and spalling of the brick. Most of the building mortar needs repointing. 21
Stone: There is minor spalling and soiling on the surface of the stone as well as cracks in the basement
concrete foundation wall. 22
Windows: Almost all of the windows are covered by plywood and are in poor condition. 23
Description: The 3 connector buildings that connect buildings 38-41 are Connector G-H, Connector H-I, and Connector I-J. These are all brick connectors that have a basement and one, two, or three floors and either a vaulted or flat copper roof. They are made with Medina sandstone foundation, cornice, beltcourses, sills and window mullions, and multiwythe brick construction on the first and second floors. The copper rooves are nearing the end of their 50-75 year life span and showing deterioration. 24
Condition:
Interior: All of the connector interiors are in disrepair and most have steel beam stabilization inside of them as shown in Figure 12. There also seems to be a nice tile floor in them beneath the dust and debris.
G-H: This connector shown in Figure 13 has a sandstone basement, brick first and second floors, a vaulted copper roof with windows as the third floor, and removed stairs. The Exterior is facing issues such as open mortar joints, spalling, staining, and collapsed brick. 25
H-I: This connector has a sandstone basement, brick first and second floors with a flat copper roof, and removed stairs. The Exterior is facing open mortar joints, spalling, staining, and collapsed brick. 26
WI-J: This connector has a sandstone basement, brick first floor, a vaulted copper roof with no windows, and removed stairs. The Exterior is facing open mortar joints, spalling, staining, and collapsed brick. 27
Figure 12: Interior of a connector with supports in place to keep it from collapsing
Source: Nicholas Anto
Figure 13: disrepair
Exterior of a connector in
Figure 14:
Stone on exterior
Source: Siera Rogers
Figure 15:
Stone on exterior
Source: Siera Rogers
Figure 16:
Stone on exterior Feature: Stone
Description: Roughly hewn, rusticated reddish Medina sandstone used for walls, contrasted with chiseled, finely hewn version around openings. Yellow sandstone used for decorative pattern. 28
Condition: Good
Integrity: High
Deficencies: Overall the condition of the stone is fairly good with the cracks in stone pieces (usually in lintels, sills, mullions, etc.), spalling of stone- usually minor on facades, soiling, especially under window openings has caused the buildings to look very imposing and algae, especially on lower portions of north façade. 29
Recomendations: Acknowledge that the reddish Medina sandstone & its overall rusticated appearance are integral to the historic character of buildings – therefore, attempt to restore as much of the exterior stone on central buildings as possible, where it is necessary to reconstruct areas of loss, use material that matches the original in color, texture and composition. 30
Description: Hard-fired multi-wythe red brick used for exterior of brick buildings Use of tarred brick on male ward buildings to create horizontal bands and circular surface pattern (non-extant). 31
Condition: Fair
Integrity: Fair
Deficencies: The brick is in fair condition, with isolated areas of deterioration that can be categorized as poor. Common problems are water infiltration and subsequent saturation leading to peeling, step cracks- especially between openings, minor spalling, extensive soiling, alge growth especially on the north elevations, extensive ivy growth, shifting/open joints, common along roof and floor levels and building corners and efflorescence- in areas of water saturation. 32
Recomendations: Acknowledge that the red brick used for the outermost wards is integral to defining the historic character of the buildings – therefore, attempt to restore as much of the exterior brick as possible, where it is necessary to reconstruct areas of loss, use material that matches the original in color, texture and composition. 33
Figure 17: Exterior brick of building 40 with mesh to keep bricks from falling
Source: Siera Rogers
Figure 18:
Exterior brick under porch
Source: Siera Rogers
Figure 19: 41
Exterior brick of building
Figure 20: area
Window in common space
Source: Siera Rogers
Figure 21:
Window in attic space
Source: Siera Rogers
Description: Typically, double hung, sash windows ranging from 2-over-2 to 15-over-15. Concealed sash cord- important considering the asylum. Folding, wooden louver shutters on some windows in Admin. Bldg. Tall/ vertically linear proportions, usually with ventilator above (both rectangular and arched). Originally unpainted varnished wood finish, coated with paint in subsequent renovations. 34
Condition: Varies
Integrity: Fair
Deficencies: The condition of window sash and trim varies
depending on location – in areas of severe water damage in wall, there is extensive deterioration of window elements. In general, common problems include rot, inoperability, missing hardware, paint build-up and historically inappropriate color palette for paint coating. 35
Recomendations: Repair of historic windows is always preferable to replacement. It may be possible to restore the wood windows, depending on the overall condition of them. If restoration is not possible, replication of the original muntin pattern, size and shape should be undertaken. 36
Figure 22: Window in patient room
Description: Copper on tower and connector roofs – its distinctive green patina has come to symbolize the complex for most part of the 20th century, used elsewhere for flashing and gutters. 37
Condition: Poor - fair
Integrity: Good
Deficencies: Copper is one of the most durable materials, however, it is beginning to show signs of age at instances throughout the buildings. Typical problems associated are corrosion and failure of jointing with the roof and building shell. Copper gutters on Female ward I show extensive deterioration. 38
Recomendations: The copper roofs are in poor condition. They should be reinstalled on connector buildings. For copper used elsewhere in building, all exposed areas of copper should be replaced in kind, at other unexposed areas, alternate material options may be analyzed. 39
Figure 23:
Copper roof on a coupola
Source: Siera Rogers
Figure 24:
Door in building 41
Source: Nicholas Anto
Figure 25:
Half door
Source: Siera Rogers
Figure 26: Doors from tunnel into building 41
Description: Shutters- Usually solid with inclusion of small window grill in wards for disturbed patients, chamfered-edge panel detail; originally unpainted varnished wood finish, painted in modern renovations. Dutch-doors similar in design to other doors, strategically located in vending areas such as at the entrance to clothes room, medicine room, etc. Glass/ wood transoms included in most interior doorwaysimportant for increased light (& ventilation) in patient rooms. 40
Condition: Varies
Integrity: Fair
Deficencies: Overall, door shutter and frames are in fair condition in most buildings. Common problems include missing parts and/or missing hardware, paint build-up and historically inappropriate color palette for paint coating. 41
Recomendations: Repair of historic doors is always preferable to replacement. When replacement is necessary (more than 50% of component parts need replacement), match new door with all characteristics color, finish, configuration, glassto-frame ratio, frame depth, width, and details of historic door. Do not cover door or transom opening with incompatible vents, fans or air-conditioning units. Special door types like dutch doors, etc. help define historic character of the space - although they may be removed at certain locations depending upon rehabilitation program, yet, some representative examples should be preserved in place. 42
Description: Wide wood casing around doors/ windows - chamfered-edge detail; originally unpainted varnished wood finish, painted in modern renovations. 43
Condition: Fair
Integrity: Good
Deficencies: In areas of water infiltration, the casing may be rotted, though it is overall in good to fair condition. 44
Recomendations: The casing is important in defining historic character in the buildings and should be restored or replaced-in-kind as appropriate. 45
Figure 27: Casework around windows in hallway
Source: Siera Rogers
Figure 28: Casework around window in patient room
Source: Siera Rogers
Figure 29: Casework around window in common space area
Figure 30: Different moldings in hallway and room
Source: Siera Rogers
Figure 31:
Chair rail and molding
Source: Siera Rogers Description: Rounded edge, wood/rubber base and chair rail moldings; plaster moldings at ceiling – these help to unify the interior spaces, and break down the scale. 46
Condition: Fair
Integrity: Good
Deficencies: In areas of water damage, and at some other locations too, the moldings are either missing or damaged. 47
Recomendations: Restoration or replacement-in-kind is recommended, though latitude may be exercised in certain areas where the rehabilitation program mandates otherwise. Some representative examples should be preserved in place in any approach. 48
Description: Historic stone and exposed brick fireplaces with minimal naturalistic ornament were built in public recess on each floor of Female wards; stone fireplaces in Admin Building – important feature in historic intent of providing a ‘home-like’ feel to the interiors. 49
Condition: Fair
Integrity: Good
Deficencies: Common problems are minor physical damage (spalling, soiling), graffiti in certain areas and paint schemes that are inappropriate with historic character. 50
Recomendations: Restore all fireplaces to match historic appearance in size, proportion, material, finish and color. Remove non-historic paint and graffiti using gentlest methods possible. Avoid sandblasting to minimize damage to existing material. 51
Figure 32: Fireplace in common area in female wing
Source: Siera Rogers
Figure 33:
Ventilation grille
Source: Siera Rogers Description: Metal grilles featuring various patterns installed on corridor walls, slightly above floor level and/or above lintel level, to conceal passive ventilation channelsalso play an aesthetic role. 52
Condition: Fair
Integrity: Good
Deficencies: Common problems include whole missing units and broken parts. 53
Recomendations: It is recommended that these grilles be retained where intact and re-installed where missing or broken. They may be removed at instances, depending upon the rehabilitation program but representative examples should be retained in any approach. 54
Description: Two main types: Wards A & B- field constructed scissor trusses; 2 x 12 framing Wards F to J – timber trusses supporting 6 x 8 wood purlins with 2 x 6 rafters. 55
Condition: Varies
Integrity: Good
Deficencies: In areas of water infiltration, there is some wood deterioration. 56
Recomendations: Repair in kind. If attic is used as habitable space, make attempts to keep the trusses exposed as they are – do not cover with false ceiling panels, etc. 57
Figure 34:
Timber trusses in attic
Source: Siera Rogers
Figure 35:
Timber trusses in attic
Source: Siera Rogers
The Richardson Olmsted Campus poses many challenges for rehabilitation. The proposed buildings to be renovated, Buildings 38, 39, 40, and 41, are historic in nature and pose challenges for rehabilitation based on the requirements set forth by the Secretary of the Interior. Federal and State Historic Tax Credits will be used to help finance the project, and the rehabilitation will have to be approved by the National Parks Service. The proposed use for the building by the development company McGuire is University based senior housing. It will work towards taking advantage of the available amenities in the neighborhood and Buffalo State College. The current financial model created by McGuire is not financially viable. There is a large financing gap due to extremely high construction costs. To work towards closing the gap, an analysis of adding office use and additional funding sources was explored. Figure 36 and 37 illustrate Proposed Renovation for University Based Retirement Community (UBRC).
Figure 36:
McGuire’s proposed development
Figure 36:
McGuire’s proposed development close up
Potential SHPO and NPS Issues
There are a few design proposals that may be potential NPS and SHPO issues. In buildings like this, a major character defining feature is the corridor space. McGuire may have issues proposing to truncate and bump into corridors, especially on all floors of each building. They are will have a difficult time making an argument to construct a new building on the site connecting to the historic buildings. It would have to be shorter than the historic buildings, and the proposed placement of the new construction would negatively impact the viewshed from and to the north side of the complex. If they build apartments or commercial space in the basements and create basement entrances, they need to be careful not to destroy the main look of the façade. Removing significant portions of the grade around the buildings and exposing the foundations to allow for new basement windows will impact the understanding of the historic use of the property. There also are a few things they are looking to propose that are feasible, with the proper argumentation and proof of historical precedence so that SHPO and NPS will approve of them. During our site visits, we noticed ghosting on the porches showing where the original porches had been. With a little extra research, we were able to find photographs showing these original porches that were shallower than the existing and were glazed. This evidence can support McGuire’s proposal of reintroducing the original porches as enclosed interior space for the adjacent apartment, with the existing porch remaining as a private outdoor space for that apartment. They also want to add skylights into the roofs to add lighting into the attic spaces. There are some existing skylight-like features on all of the roofs which supports the idea to add more.
Historic Rehabilitation Tax Credits Historic tax credits have come into existence at the state and federal level to facilitate the rehabilitation of historic structures which may not otherwise be feasible. Prior to the enactment of this legislation, it was not always financially feasible to redevelop a historic property in a manner that maintained the ornate character of historic details. As a result, many historic buildings have been demolished or renovated beyond recognition. The first version of a federal program began in the 1960’s and evolved into a tax credit structure in the late 1970’s. States then saw the benefit of the program and created similar programs to augment the federal. There are a variety of types of tax credits that may be applicable to the adaptive reuse of the Richardson Olmsted Campus.
Federal Historic Tax Credits
The first example of a tax credit program that is made available to those looking to rehabilitate abandoned and or underutilized historic buildings is the Federal Historic Rehabilitation Tax Credit program. This program provides a 20% federal tax credit to property owners seeking to rehabilitate historic buildings. In order to receive this tax credit, rehabilitation work must meet the standards set by the Secretary of Interior standards, and approved by the National Park Service. 58
New York State Historic Tax Credits An additional example of a historic tax credit program is the New York State Commercial Properties Tax Credit. This program provides a 20% state tax credit to cover up to $5 million of the rehabilitation costs. In order to qualify for the New York State Historic Tax Credit, plans by property owners must be approved by both the New York State Office of Historic Preservation Office and the National Park Service. As a result, property owners can receive up to 40% off of qualified rehabilitation expenditures, 20% from New York State and 20% from the federal government. 59
Qualifying Rehabilitation Expenses
According to the National Parks Service, “not every expense associated with a rehabilitation project contributes toward the calculations for the 20% rehabilitation tax credit. In general, only those costs that are directly related to the repair or improvement of structural and architectural features of the historic building will qualify.” 60 Qualified Rehabilitation Expenses include both interior and exterior improvements and some soft costs. The QREs are broadly limited to rehabilitation of the existing fabric and most soft costs but do not include unattached fixtures, exterior landscaping and
other non-capital expenses. See Figure 8 for a chart of what expenses qualify and what do not. These non-qualifying expenses reduce the available basis for the Historic Tax Credits. Developer fees are a qualifying expense, and McGuire has created an high developer fee to create more basis for the historic tax credits.
Figure 37:
Qualifying and Non-Qualifying Expenses
Substantial Depreciation Test A rehabilitation project must undergo and pass a Substantial Depreciation Test which involves a financial analysis to determine if the rehabilitation costs exceed the adjusted basis cost of the building. For this project the analysis is as follows: Adjusted Basis = A – B – C + D $0 (property is leased) A = purchase price of the property (building & land) $0 (property is leased) B = the cost of the land at the time of purchase $unknown/TBD C = depreciation taken for an income-producing property $43,891,739 D = cost of any capital improvements made since purchase
Therefore, the adjusted basis in the property, assuming none or minimal depreciation, is $43,891.79 which is less then total rehabilitation costs and the project then passes the Substantial Depreciation Test.
Back of the Envelope Analysis A quick BOE analysis of this project shows the following: - Rentable Square Footage: 51,691 - Proposed Rental Rate: $2.10/sf - Gross Rental Income: $108,551 - Operating Expenses: 50% of GRI = $54,275 - Net Operating Income: $54,275 - Assumed Cap Rate: 7% - Projected Value: $775,375 - Historic Tax Credit Equity: $13,600,000 - Total Projected Value: $14,475,375 - Project Cost $56,000,000
This shows that a projected future value for the property could be $14 million but weighed against a projected cost of $56million this initially looks like a very poor investment even with the large additional value of adding in the historic tax credit equity.
University Based Retirement Communities
A UBRC Defined University Based Retirement Communities (UBRC) have become increasingly popular when it comes to development projects in the recent past. These communities and sites vary on whether they are on campus or near the campus, as well as the level of connection and involvement the entities have with one another. These communities can be beneficial to both the students and the residents, in regards to the amenities packages, the student opportunities, and the type of environment that can be created for all users. This connection is not for everyone, therefore there needs to be an attractive amenity package that comes with the residential complex that does not rely strictly on what the university could provide. When prospective tenants hear about a UBRC and choose to live there, they are expecting and wanting something more than just warm weather, a golf course and a pool. There are amenities beyond this that these types of tenants desire, therefore if McGuire is looking to market this as a UBRC, they need to look at what they can provide on-site, as well as what Buffalo State can provide and find the most cost effective method to do this. It is important to look at other UBRCs
and Kirkbride residential reuse projects across the country to see their methods and strategies, while keeping in mind that the McGuire project is working with an extremely greater cost than most other senior living developments. The inclusions of different varieties of amenities from parking to unit finishes is going to impact the costs greatly, as well as the rents. If asking for higher rents, as McGuire proposed, the quality of amenities needs to also be high. Thus, there is a huge challenge that runs throughout this project, which is making sure the rents are able to financially sustain the provided amenities in the long run costs that will come with. There are a variety of UBRC developments which all have a different level of connectivity between the educational institution and the senior housing. There are benefits to both the students and the residents that should also be explored. First, we are going to investigate the types of amenities that a UBRC provides as well as the prices for these benefits and for the rents in general. From here we will explore what Buffalo State can provide, if there are any limitations to this partnership, and the opportunities this partnership can provide for the residents and students.
UBRC Precedents:
Ithaca College and Longview Partnership Looking not too far from Buffalo, Ithaca College created a UBRC partnership with Longview, which is located just up the road from the college. This partnership began in 1999, and the two entities share a mission statement that states the goal is to “create a unique, shared environment that enriches the College’s academic curriculum, and affords members with intergenerational educational and social experiences; to facilitate person and professional growth; to promote volunteerism; and to enhance the quality of life.” 61 The first way Ithaca College and Longview follow this mission statement is through course related projects at Longview. The students go to Longview for service learning projects, discussion groups, tours, and other social activities that are planned by the students. At Longview, there is a classroom, offices and an assessment room that are all designated for the programming from this partnership. Ithaca College has five schools, and each school is represented or involved in this partnership in some way. For example, the physical therapy, occupational therapy, and similar programs provide health assessments and other health-related programs for the senior residents. Further, for entertainment, students will perform at Longview for the residents. Not only are students involved, but professors and faculty provide lectures for the seniors. Lastly, the residents are allowed to use the facilities on campus as well, including the bookstore, the pool/gym, attend art exhibits, performances, and sporting events. Although the Longview apartments are off campus, there is a shuttle that is provided to make sure each location is accessible to both the students and residents and to maintain this connection. One of the problems that McGuire is running into is the question of how these programs will be paid for. What we can learn from the Ithaca College and Longview partnership is how they
organize these events and programs. Many of the activities are guided by Ithaca College’s work-study students and student volunteers. 62 Therefore, the students and workers are paid by the college or through federal work study money, so ultimately there may not have to be a position created by McGuire to organize many of these types of amenities. There are great benefits to both the residents and the students that should be noted. For the residents, there is this opportunity for continued learning and intellectual stimulation that many of these residents are looking for in a UBRC. There is also greater social interaction that is intergenerational. These residents create strong personal relationships with students, faculty, and their neighbors when participating in these activities together. The residents also have access to health and wellness programs and resources right down the road or even within their building. On the other side, the students are able to learn outside of the classroom in an experiential learning setting. They are able to make connections, get the necessary volunteer hours in order to graduate, as well as learning from a different demographic of people. Lastly, there are also benefits to the faculty at the college. Faculty members are able to enrich their curriculum and make their courses more unique. They also are able to have different research and service opportunities for themselves and implement interdisciplinary teaching within their courses. The relationship between Buffalo State and the Richardson Complex has great opportunity to become something greater than just shared recreational facilities as McGuire Development proposed. These benefits will not close the financial gap that has been mentioned, but they could be a step in the right direction if implemented beyond just marketing the site as a UBRC. Longview has different levels of housing types and care types, from independent living to enhanced care. For the sake of our project, we are going to look at the rates of strictly the independent living. Longview charges per person, below is a table that gives the monthly rents:
Figure 38:
Longview Apartment rates
Longview Apartment Rates 63 include the partnership amenities with Ithaca College plus a great amount more. For example, the rent includes one meal a day, but there is restaurant style dining so for additional fees you can have up to three meals a day provided. The utilities are included in the rent, as well as basic housekeeping services, many rooms for activities, and places (indoor and outdoor) where planning recreational activities are. Tenants are responsible for cable, phone bills, personal entertainment expenses, extra meals, private laundry, and arranging personal health care services. 64 These rents seem to be in a similar range as what McGuire Development is proposing, however, McGuire Development does not seem to have nearly as many amenities as Longview does. The strong partnership with Buffalo State is lacking in different ways too. However, it is very early on and Longview can be a solid reference to what is possible at the Richardson Olmsted Campus buildings. Buffalo State College can be an incredibly valuable resource for this development if the partnership is strong and if both entities are willing to think creatively to receive the greatest benefits from one another. Buffalo State College has many programs but the top programs (highest number of students enrolled) are Business, Management, Education, Public Safety and Law Enforcement Programs. 65 With this information and using the type of partnership Ithaca College and Longview have, the students from these top programs can become an important piece of this partnership. For example, students in the education program can possibly get the volunteer hours they need to teach classes at the Richardson Complex, or even students who are in art programs who are willing to teach the art classes through work study or volunteering. Further, one of the main concerns McGuire Development has the idea that if the apartments tare open to outside community members, or if a social club is implemented into this development, there will be a problem with security. Therefore, another use of the Buffalo State College partnership could be utilizing the students who are enrolled in the law enforcement, fire safety, and related protective service programs to be security for the apartment buildings again through fulfilling volunteer hours or work study programs. Lastly, the layout of the site currently creates a physical disconnect between the college and the Richardson Olmsted Campus. Therefore, the barn is an important piece that needs to be developed not only to foster this proposed partnership, but it also is a space that needs to bring in foot traffic from the outside.
The Villages at Traverse City Commons Although this senior living facility is not a UBRC, it is a Kirkbride facility and very similar to the type of development that is happening at the Richardson Olmsted Campus. The Villages at Traverse City Commons have 110 apartments total, which more than doubles the proposed plans for the Richardson Complex. Therefore, there does not seem to be a density issue at this facility, and the programs seem to be supported greatly. Rental and Fees for The Villages at Grand Traverse 66 , listed are
Figure 39:
The Villages at Traverse City Commons Apartment rates
These are the monthly fees which includes a variety of amenities that will be discussed. On top of this, there is a one-time fee of $6,000 for the club initiation fee for each resident. With rent and this one time initiation fee, the amenities residents get are listed below 67 : Dining venues and open dining hours Programs that take place throughout the complex Housekeeping teams to help with daily chores Valet parking Transportation (scheduled and private) Fitness center Trails, gardens and parklands (seen in the picture to the right). Indoor connection to the rest of the mixed use complex at the Grand Traverse Commons Business center and library Artist center and woodshop Personal iPad that connects you to the complexes schedule, events, etc. Salon and spa
These amenities come with a great cost that seems to be very much above what McGuire Development proposed. Further, the complex itself is much more established and has a sense of place. Almost everything these residents need are on site, as well as a mixed-use complex including
retail and office that connects to the site. Something that should be looked into is the security of the buildings, and whether non-residents are able to pay for club memberships because of the possible consideration of including a club or membership system at the Richardson in order to increase the density. Although this is not a UBRC, we can look at what amenities that Buffalo State can provide that are included in this example. Buffalo State has the basic things such as a library, swimming pool and fitness center, as well as different programs and entertainment that the residents can enjoy. However, even with this connection to Buffalo State, the Richardson Complex itself still needs to implement plenty of amenities in order to keep people on the site for their needs and wants and to allow them to charge the higher rents they are proposing. Not only this, but it is important to establish what kind of place they are trying to develop. The Traverse City Commons have established a sense of place and have created its own village. Therefore, the redevelopment of this site needs to have clear goals of what kind of place they would like and who they want to include, whether is it just residents, or outsiders such as community members and other visitors. There are benefits to allowing the outside community to come in, and it might even be necessary to design a site that is welcoming to all, not just residents. Creating a social club where people pay membership fees to use the amenities is something that can help both the density issue as well as the financial issue that has been presented.
Danvers State Hospital (Avalon Danvers) Danvers State Hospital, another Kirkbride hospital, was redeveloped to accommodate a residential use. Although this is not senior living, it is still useful to compare the rents and what amenities are included with such rents. Further, Avalon Danvers is strictly residential, there are no retail or commercial uses on the site. Therefore, they rely purely on their own amenities, not from outside sources such as universities or the mixed-use aspect. This is most similar to the current state of Richardson Olmsted Campus. Once the apartments are fully built out, the amenities will be strictly the ones McGuire builds into their design, which currently is limited to an art studio, a puzzle room, a proposed fitness center, and a media room. There may be a pool in the near future whether Hotel Henry builds it or Buffalo State allows residents access it. Also, the Kirkbride provides other unique designs such as public porches that will be implemented at the Richardson Olmsted Campus as well as a vast lawn. The hotel has a few more amenities like a restaurant and event space, but there is no connection there in regards to rent. This is the current state of amenities if they keep a distant relationship with Buffalo State College and do not fully utilize that connection. Figure 11 shows Table 1.3 Avalon Danvers Rental Rates . The amenities that are included at this site are : - Pet Friendly w/ fenced in park - Swimming pool
- Sundeck - Fitness center (seen to the right) - Outdoor fitness challenge course & running trail - Yoga studio with Apple TV Virtual Yoga System These types of amenities seem like a realistic goal for the Richardson. However, these types of amenities might not be exactly what senior residents want. Further, the Richardson Olmsted Campus has an abundance of open space outside and inside to possibly implement more amenities than this. Again, although they have the space to implement more amenities and spaces for recreation, social space, and space for other activities, it does come down to the cost of implementing these amenities, keeping in mind the kind of market that Buffalo, NY is and if the higher rents can be supported and afforded.
Other Basic Amenities What remains now is does this site even work with the proposed user/tenant? There are a variety of ways McGuire can develop the site and form partnerships to create an amenity package that makes living at the Richardson Olmsted Campus more desirable to tenants. However, there are a few restrictions to this. The first being the complex itself and the historical preservation that restricts some amenities that can be included. However, it is important to note that the historical preservation does not always restrict development, it can also be something that enhances other creative and unique design. In this case, we will focus on amenities that seniors (the proposed user) may need or want but cannot get. One amenity in mind is including spacious units for the user. The user may be downsizing from a home in the suburbs to an apartment, but still needs extra space or storage. The proposed units in this complex are somewhat small and may deter residents from choosing to live there. Further, because it is proposed to be senior living, some residents may need extra space because of wheelchairs, or other physical needs. Although the hallways will be spacious and easy to get around, some units themselves seem to be tighter quarters. On the other hand, if the units are a bit smaller it may encourage the user to be outside of their apartment more and utilize the outside amenities that will be provided. Next, another factor to consider is the fact that there are no garages proposed or allowed because of the historic preservation restrictions. With the proposed user being a senior, the idea of brushing the snow off their car may be something that is a harder task for those users compared to a user who is younger and more able bodied. Many of the senior living apartments included in this research either have valet, public/private transportation included in the rents, or garages. Next, because there are 40-50 proposed apartments (approximately 100 people living there), the classes and other amenities may not be utilized as much as McGuire expects them to be. Therefore, there needs to be other developments on site that bring in foot traffic, such as destination
retail, restaurants, or other unique uses. Further, to get the most use out of the provided amenities, it may be necessary to be open to the possibility of a social club as mentioned earlier. The Village at Grand Traverse Commons has a total of 110 apartments, and therefore they do not have the same concerns. Looking at other types of clubs in Buffalo can give a precedent to what can be implemented in the Richardson Campus that will create greater desire to be at the site from tenants and the surrounding community wanting to be members. The Garret Club for example provides educational seminars (which can also connect Buffalo State into this aspect), different clubs, dining rooms with daily meals, and ability to host private events. 68 Creating something along the lines of a social club could be beneficial to the tenants, the financing, and the ability to increase the rents because of the high quality amenities provided.
Amenity Conclusion Because of these many restrictions and challenges, it may be ideal to not necessarily have an age limit on who is able to live at the Richardson Olmsted Campus. This may create an even greater barrier to success. These apartments are already narrowing the prospective tenant pool down because of the cost of rents, and therefore the age limit may create an even greater restriction. When asking for such high rents, it is important to have quality amenities not only outside of the apartment but in the unit as well. This ultimately may be the greatest challenge for McGuire’s project. Balancing the amenity package, the affordability of the apartments, and the budget they have to work with to design a complex that is desirable, unique and is not just an apartment complex but as a sense of place that people want to live in and visit will be an extreme challenge. The amenities do not need to be over the top amenities that cost a great amount of money. There can be simple things implemented that make the site much more usable and desirable. This can include public grills, spaces to spend time outside, trails for people from the outside to walk through and use, and other minor features that can go a long way. One of the top goals should be to create a site that is connected to the city and the surrounding landmark sites, and it should be a place to bring people to.
Adaptive Reuse as Senior Housing
Proposed Programing McGuire Development is proposing that buildings 38, 39, 40 and 41 become a UniversityBased Senior Community. 69 They are looking to coordinate with Buffalo State College since its campus is just on the other side of the road. They are looking to turn Building 38 into an office to run the senior living community, an amenity space that can be rented out to community members and the rest of the space will turn into apartments. Building 39 and 40 will both become all apartments with a few amenity spaces mixed in.
The first floor of building 41 will become commercial space. The desired tenant for this commercial space has not been determined by McGuire at this point in time. The upper three floors will become apartments since this building is the most flexible with its open floor plan. Currently McGuire is looking to possibly build an additional building on the site and connect it to one of the original buildings in order to gain more apartments. In figure 40 you will find the potential program stacking plan for all 4 buildings and Unit Mix analysis. It is important to note that building 42 has three floors, with the first floor commercial, buildings 39 and 40 are similar in size and unit count and building 38 is smaller than 39, 40.
Figure 40:
Program stacking plan
There is projected to be 38 units will be a mix of one-two bedroom and one Commercial space ranging from around 650 sf to 1250 sf. Building 41 is projects to have 17 units, buildings 40 and 39 will have 12 units and Building 39 will have nine units. Units will not be uniformed. The goal is to create units with great livable space as seen in images 1.5 and 1.6 are concept drawing of the first and second floors.
Market Study: The current iteration of McGuire Development’s plan for the rehabilitation of the Richardson Olmsted Complex would see the development of a 41-unit university based senior housing development. In order to construct a market gap analysis, it is first important to understand McGuire’s reasoning for making this development plan as well as what the market looks like in terms of supply and demand for such a plan. University based senior communities (UBRC) are a newer development trend which places an independent senior living community on or near a major university campus. The community would then have access to the university’s facilities as well as having the opportunity to audit classes at the school. A benefit to UBRCs is also the care that the university can provide to the residents. Often times, students enrolled in the school’s physical therapy, nursing and other healthcare departments will work at the senior community for school credit. Students in the school’s communications and management departments will assist with programing activities taking place at the residency. It’s a mutually beneficial system which allows the UBRC to have cheaper healthcare options and programmed activities on site while giving the students much needed experience. 70 After better understanding what exactly UBRCs are, it is time to find the market demand for them as well as the supply. In meetings with McGuire Development, they were adamant that this is a market that has not been tapped in Buffalo yet and is one that would succeed given its potential. After researching for local UBRCs, none were found in Buffalo or the Erie County area. This suggests that it is indeed an untapped market in Buffalo. More important factors to take into consideration are who is going to be living there and potential occupants, and if the school in question is able to create demand for a university connection.
Buffalo State College is located directly next to the Richardson Olmsted Campus, which is one of the reasons a UBRC would make sense. However, there are a few issues with the campus, in terms of geography and prestige. Geographically, while the two sites are located next to each other, there is actually a substantial distance between the university campus and the Richardson Olmsted Campus. As you can see on the map in Figure 1, there is a lack of connection between the two sites and senior citizens would likely be unwilling to make a walk that far to use the campus facilities. The yellow on the map indicates McGuire Development’s proposed development area where the red shows Buffalo State’s facilities. The issue this brings is there will either need to be a shuttle for residents to get to campus or residents will likely need to drive which creates either an added expense or an inconvenience for the residents. The other issue is the prestige and size of the school. Retirementliving.com is a helpful website for senior citizens looking to find the right place to retire and age in place in. It has a comprehensive list of different UBRCs across the United States and where they are in each state. A positive for this plan is that there indeed are not any in Buffalo or in Erie County. The only UBRCs in New York are located in Rochester, Ithaca and Purchase. This supports McGuire’s reasoning for seeing this as an untapped market. However, if you look deeper into which schools are targeted for these UBRCs. In Ithaca, Cornell University, an ivy league school features a UBRC. In Rochester, a similarly prestigious Rochester Institute of Technology also has a retirement community on its campus. In Westchester, Purchase College, a top-100 liberal arts school in the nation also has multiple retirement communities affiliated with them. This is a trend that is being seen with UBRCs in that they are frequently affiliated with either prestigious universities or very large campuses such as Duke University, University of Texas and University of Notre Dame. 71 The clear trend is to create a linkage between an either prestigious or large scale university in order to give residents access to its classes or facilities. Buffalo State College is not the biggest college campus in the Buffalo area, and it is not ranked to the level of other examples with UBRCs. On top of this, Buffalo State College does not offer physical education or nursing programs, meaning that one of the largest draw factors to UBRCs is not available through a connection to Buffalo State College. 72
This raises concerns for the desirability of the college as a selling point to potential residents of this community. The other data that is important to analyze is what other supply and demand factors contribute to successfully renting a luxury senior living complex in Buffalo. Age is an obvious factor when dealing with senior living complexes. The current plan for this development describes it as a 62-and-up retirement community. Based on the 2017 ACS, 23.6% of the population in the Buffalo MSA is aged 55-74. This bodes well for the project and proves the assumptions that there is a large portion of population that fits the demographic target of this project. There are other issues to consider however; and one troubling statistic shows that only 22% of the Buffalo MSA population has some form of retirement income. This is troubling to the project because in order to obtain
the high rent demands required to make this project feasible, the resident would more than likely want some form of retirement savings plan. 73 And while there is certainly a high volume of aging population, their household income is just as important. A report from Esri in Figure 2 shows the detailed breakdown of household incomes in the Buffalo MSA in households aged 50 and up. The table shows that in each age bracket, the majority of the household income levels sit between $50,000 and $74,999. 74 This should be cause for concern considering that the age demographic this project is planning to target largely has a household income lower than what would be able to afford high rents that are needed. It could be argued that this is a retirement community for seniors not working. But when over 70% of Buffalonians do not have some form of retirement income, it tightens the demographic significantly. The current plan of this development features 41 units. While this can be harmful to the project in terms of density needed to meet costs, there should not be too much difficulty to find 41 people in Buffalo who would be interested in moving to this development. It is located in an optimal part of the city. It is close proximity to the Elmwood Village, Delaware Park, and the Albright Knox museum as well as the college. On top of this, it is located near some of the wealthiest neighborhoods in the city. This is a product that residents in these neighborhoods who are looking to downsize would consider especially given their predisposition to the neighborhood.
Figure 43:
Table showing the household incomes of population 50+ in Buffalo, NY
There is a lot to take away from this gap analysis, and this is not to say that McGuire’s own market analysis in unfounded. There is a definite lack of university-based retirement communities in the Buffalo and Erie County area and with the large amount of higher education opportunity in the area, there should be a strong opportunity for this type of development. However, there are considerable issues that need to be addressed. The focal point around Buffalo State University does not seem like it will be a big enough draw on its own to lure in potential residents. The campus does not offer physical therapy or nursing programs so a common feature in UBRCs will not be available. The lack of easy connectivity to the campus also creates more pricey problems in a project which is already tight budget-wise. Lastly, the lack of a high volume of high-wealth individuals 60 and older makes the demographic selection even tighter. In conclusion, it seems that there is a gap in the market in terms of asset type, but the location and cost to develop makes this project a major risk.
Market Gap Analysis There is a lack of a comparable university based senior living complex in the Buffalo, New York region. This makes the project difficult to evaluate from a market standpoint. It is unknown whether or not the concept will be well received in the area. There is an example in Rochester that utilizes a connection with the University of Rochester. This community is known as the Highlands at Pittsford. 75 It features many amenities including a restaurant and meal service, an indoor pool and fitness facility, and a medical office staffed by University of Rochester medical students. 76 There is a planned development at SUNY Purchase where the college will be retaining ownership of their land and will receive yearly lease payments from the developer for the proposed housing complex. This project is a planned $320 million project that will construct 220 independent living homes on the property. The ground lease payments received by Purchase College will be used to fund student scholarships and hire additional faculty. 77 Neither of these projects relate to the project on the Richardson Olmsted Campus. It is undetermined whether there will be enough seniors 62 and older that have the desire and means to live in this project. With rents of $1,900 for a one bedroom unit and $2,800 for a two bedroom unit, the proposed rent are over the current market average for all multifamily properties, as stated in the market study provided to McGuire Development. 78 Since this project is independent living, it cannot be compared against assisted living facilities that command very high rents. Meal service is not included, and there are limited programmed amenities planned for the site. The Ellicott Development senior housing development at Symphony Circle has significantly higher rent, but provides meal service and more amenities. 79 It also has a greater number of units and has a higher density due to it being a new built construction project as opposed to adaptive reuse. There is competition in the use of the buildings as Class A office space, but there is limited competition of a building with as much historic value as the Richardson Olmsted Complex. An example of an office building with an equally famous architect in Buffalo, NY is the Guaranty Building designed by Louis Sullivan. This building is currently fully occupied by the law firm Hodgson Ross. 80 The office space in Richardson Complex would be competing for a similar type of tenant. The desired tenant would include law firms or other high end services. The likelihood of Class A office space being successful is reasonably high based on comparable properties and known demand.
The idea for Richardson Academy Retirement Community located in Buffalo NY, will be part of the Richardson Olmsted Campus and sits adjacent to SUNY Buffalo State College. The idea of the Campus is to be able to deliver these aspects to create an encompassing university-based retirement experience. The Richardson Olmsted Campus, consist of a National Historic Landmark designed by HH Richardson and is one of Buffalo’s most iconic buildings. The complex boarders the Elmwood Village and West Buffalo neighborhoods. The structure is famed for its Romanesque revival architecture and spectacular landscape. The building was once the Buffalo Insane Asylum and design as part of the Kirkbride plan. The 42 acre, ten building campus is part of a Master Plan to restore and rehabilitate the building in a campus like effort. Currently the main administration building and 2 adjacent wings had been recently (2017) rehabilitated as part of a 70-million-dollar rehabilitation. These building are currently the home of Hotel Henry. Hotel Henry is an urban resort with 88 rooms, including a café, full restaurant and bar, state-of-the-art conference space with pockets of incredible communal spaces. The proposed UBRC will be located in Buildings 38,39, 40 and 41. It will be directly adjacent to the Hotel Henry and Buffalo State College. Branding and marketing will need to occur in two concurrent segments for the proposed project. The marketing for the residential senior living portion of the project will be separate from that of attracting a large office user. Branding of the project needs to play off of the historic architecture of the building and how it was absolutely necessary to reuse the structure. It will be important to accentuate all the remaining historic and character defining features inside the buildings. Branding will need to build off of the
existing brand created by the Richardson Center Corporation and Hotel Henry. It will be necessary to make a clear distinction between where the hotel ends and the other uses begin. The complex as a whole needs to work on becoming more accessible to the public and provide a clearer entryway into both the complex and the buildings.
Proposed Building Amenities The goal of URBC’s are to fully engage the residents. There will be plenty of open space including community rooms, lounges, plenty of outdoor patio space, throughout the entire complex. The buildings are connected by 3 grand connectors, that will also double as a meeting lounge space. These connectors will give the residents access to all four buildings and all of the amenities they have to offer. Much like the Hotel Henry, there are many pockets within the space and building that may not be rentable but will add value in other ways. Retirees, friends and family will be able to congregate in these amazing communal spaces. No matter how technically perfect your building is, the true functionality of this complex will be measured by how much it aids to user’s comfort. Collective areas provide additional facilities for tenants to experience, entertain, and unwind which, accordingly, will increases the functional value of the entire complex. Building amenities include: Building 41 Community Room for meetings and gatherings Building 40 Fitness Room Business Center Media Room (2) 1st floor grand porches (2) 2nd floor grand porches
Building 39 Library Room Large walk out patio and garden on 1st floor Puzzle Room Game Room
Building 38 (1) Grand porch Reception/office
1,500 SF event space with kitchen 1,500 SF Art Studio
Possible Outdoor Amenities Sports courts (pickleball/tennis) Walking paths Shuttle service to events Outdoor Campus Events
Proposed Tenant Demographic The intended demographic for this UBRC community is retirees above the age of 62+ looking for independent living in a urban setting, that want to experience a communal environment.
University based connection with SUNY Buffalo State College As mentioned, prior, there are key criteria for UBRC to be successful. These will need to be implemented with SUNY Buffalo State College.
i. Be in a location that is directly accessible to a University or College.
The proposed URBC project will be directly adjacent to Buffalo State College. Buffalo
State College is a public college part of the State University of New York system (SUNY).
The School offers 79 undergraduate programs and 64 graduate programs. The proximity is walking distance to the university and will be easily execrable by all modes of transportation. ii. Have formalized programming incorporating with the University or College.
Richardson Academy slogan will be “Retire Smart”, There will be a complete connection to the College. The residence of the Community will be able to take classes, see guest speakers, and attend sporting events at a discount. The goal here is to integrate the two environments iii. A financial affiliation between the university and the retirement community provider.
The key is to have a financial affiliation that is mutual between the College and UBRC.
The College will be increasing their bottom line by gaining the extra income from the tenants enrolling in classes. The UBRC will benefit as it will create an age inclusive environment and connection, that the ROC lacks right now.
Membership Options The final leg of this stool is to fully utilize all the amenity space provided. A membership will be offered to friends and family of the residence to be able to use all the common space and outdoor space amenities. The residence will have an automatic membership included in their rent, but friends and family members will be able to join in on the fun too! They will be able to book event space, use the library, puzzle and computer rooms at a monthly Price.
The Idea is a combination of a country club and a retirement community. These activities generally allow residents to maintain healthy lifestyles by encouraging movement and socializing with their peers. Being able to socialize with other residents and like members becomes an important part of many peoples’ lives and the membership options open to family and friends, offers common spaces indoors to support that need.
UBRC Goals Tenants, along with friends and family will also love visiting the urban oasis, close to shops on Elmwood avenue, Hotel Henry directly connected, SUNY Buffalo State, and diverse West Buffalo neighborhood. The goal is to creating an inclusive connection with the appropriate programming for both the college and the residents. The university based senior living component of the project will be marketed toward seniors 62 and older that have enough disposable income to afford the projected rents. The apartments will be a part of the historic complex and will feature unique floorplans. The basement apartments will show many exposed features for a vintage and industrial style. It will be important to market the apartments towards empty nesters and baby boomers that would like to move back into the city. These individuals or couples would be able to sell their suburban houses in a favorable real estate market and downsize into an apartment in a historic building. They would be able to save money on property taxes and the cost of maintaining a house. They would be able to save time by not having to upkeep with required maintenance. The location next to Buffalo State College will allow for residents to take advantage of the resources present at the college and take continuing education classes. The location of the property near Delaware Park and other recreational amenities will help residents maintain an active lifestyle. The Elmwood Village provides many dining, shopping, and cultural activities. These assets will need to be focused on in attracting new residents.
McGuire’s proposed program of the buildings includes 54 units of university based senior housing. This proposed use results in a funding gap of over $27 million that will prevent the project from undergoing construction. McGuire is contributing a limited amount of partner equity into the project, less than $500,000, in ensure they receive a return on investment of 15% or more. If McGuire is able to raise the gap through private fundraising that involves no returns or repayments, the project will be a good investment for the company. However, free money is not given away in that fashion. The current project is not feasible and is not a good investment for any potential investor. To work towards closing the gap, a change in proposed use was undertaking. The character defining features of the buildings greatly limit the efficiency of fitting apartment units into the floorplans. The main floors of Buildings 40, 39, and 38 and their associated connectors would be better suited for use as commercial Class A office space. This use would allow for the gross square footages of these floors and common spaces to become gross leasable area and generate revenue. The assumption of a rent per square foot of $25.00 gross lease per year would generate more income than the 6 apartment units that could be fit into each floor. Building 41 will become fully an apartment building with seven units on each of the four available floors. There will be no commercial space in Building 41. The basements of Buildings 40, 39, and 38 will be utilized for apartments and necessary mechanicals. The apartment units in the basements will have more freedom with SHPO and NPS because they are not as historically significant. The attic of Building 38 will feature 9 apartments after the removal of the proposed amenity spaces that have no apparent programming from McGuire. The attics of Buildings 40 and 39 will remain empty and be used for mechanicals, as similar to the Hotel Henry rehabilitation. This change in use provides greater efficiency and increases the overall gross potential income for the building. The construction costs remain similar as to those expected by McGuire. The increased income will raise the value of the project and allow it to support more debt. The funding gap will be lessened, but the project is still infeasible. The gap stands at almost $17 million.
Gap Analysis: Funding Gap
There is a significant funding gap for this project. The deteriorated nature of the building has created exorbitant construction costs for stabilizing the buildings. The historic use of the building created large corridors that are character defining and can’t be removed, narrowed, or truncated. This results in an inefficient use of space that limits the amount of rentable area. By changing the use for the property from entirely senior apartments to a combination of apartments and office space improves the efficiency of the buildings. Leasing office space allows for corridors and circulation space to become leasable area, whereas residential uses do not. The construction of office space as limits the some of the demolition and fit outs needed to create apartments. The final build out of the office space to meet the needs of a tenant will be paid through the tenant improvement allowance built into the rent price. The addition of office use will help to shrink the funding gap for the project. The additional rentable square footage will improve the gross effective income for the property, resulting in an improved Net Operating Income and the potential for a larger loan. The construction costs will remain the same but more space in the building will be rentable due to the addition of some basement and attic apartments. Since the apartments will not be located in areas of the building that
have the most historic significance, there will be greater ability to make units that efficiently use the available space. Even with these considerations, the project still faces a large gap. The rehabilitation of the building is just too expense to support any proposed use. The $13 million of stabilization expenses cannot be supported through any achievable rent level. New York State’s willful negligence towards maintaining the property has created substantial structural damage that has to be repaired before any new use can take place inside the buildings.
Potential Additional Funding Sources
Empire State Development Grant Funding Empire State Development Grant funding becomes available once a year through the Consolidated Funding Application. The goal of ESD grants are to promote economic development across New York State and works toward leveraging multiple funding sources to create impactful projects that help create jobs and restore economic vitality to struggling areas. In the 2019 funding round, up to $150 million of grant funding was available to help fund projects across New York State. 81 The grants are given as a way to help advance the mission and strategic direction of New York State as a whole. Preference is given to projects that support the Downtown Revitalization Initiative and Strategic Community Investment, in addition projects that improve access to child care and that incorporate environmental justice practices. Eligible applicants include for-profit and not-forprofit corporations, local governments and industrial development agencies, as well as many other institutions and groups that help drive economic development. 82 There are generally three categories of investment. These include (1) Strategic Community Investment, (2) Business Investment, and (3) Economic Growth Investment. Grant funds may be used for a variety of purposes. 83 These include the acquisition of land or buildings, demolition and environmental remediation, new construction or renovation improvements, acquisition of furniture and fixtures, soft costs up to 25% of total project costs, and planning and feasibility studies for a specific project or site. Ineligible expenses include developer fees and residential development. The grant can be up to 20% of the total project costs based on the eligible expenses. 84 It is encouraged to have other funding sources present to limit the grant request for each project. The Empire State Development requires a minimum of 10% cash equity to be contributed to the project by the developer based on total project costs. There is a potential to use an Empire State Development Grant for the rehabilitation of the Richardson Complex. However, the grant funding does not apply to residential development. In the case of renovating the entire buildings of 38, 39, 40, and 41 into senior housing, there would be no opportunity to apply for ESD grant funding. McGuire’s current plan of having commercial space on the first floor of Building 41 only results in approximately 5,000 square feet of commercial space.
As a percentage of the total project, this commercial portion is miniscule to the entire complex. It is unlikely that applying for a grant for such a small space is worth the effort. If the use of the buildings is changed to a commercial purpose, such as office space or restaurant space, there is a possibility to make a sizable request for an ESD grant. Based on the current estimated project costs, the grant request could be over $5 million. An award of a grant this size is unlikely. There is fierce competition through the grant application and the previous awards do not support a grant of that amount. A more plausible grant award would be approximately $2,000,000 based on a previous grant to the former Mount St. Mary’s Hospital property to revitalize the abandoned historic hospital building into a hotel and commercial space. An award of $2,233,395 was given to the project during the 2018 funding round. The Empire State Development grant poses another problem for McGuire. It requires a minimum 10% of cash equity of the total project costs. This equity cannot come from loans or from other government grants. It is not explicitly specified whether federal and state Historic tax credits would qualify as cash equity, since the current plan for McGuire is to syndicate the credits. The syndication will result in cash to fund the project, but this equity is not coming directly from McGuire. The current anticipated developer equity is less than 1% based on project costs of over $50 million. If the current gap in funding is filled with donors to the project, it is possible that those cash contributions could be considered a developer cash infusion to the project.
Greenway Funding Erie County Greenway Funds have been made available through the relicensing of the Niagara Power Project, totaling $9 million per year within the Niagara River Greenway. This fund includes $2 million of funding per year to be distributed to various projects within Erie County. The City of Buffalo is located within this greenway, and there is a possibility for the project to utilize these funds to improve the site. The maximum award for an individual project is 20% of available funding, or $400,000 per year. Projects can only receive funding once. Preference for funding will be given to projects improving public access to the waterfront, improving and sustaining existing resources, and that are consistent with established Master Plans. The grounds of the Richardson Campus were originally designed by Frederick Law Olmsted and Calvert Vaux. At their present state, the grounds of the campus are disconnected from the surrounding neighborhood and are not being used to their fullest potential. A Greenway fund award could be used to help increase the use of the grounds and reconnect them to the surrounding neighborhood. It is important to make it known that the grounds have historic value as Olmsted design. This Greenway Fund award will help to fund the site work that is not a qualifying expenditure for Federal and State Historic Tax Credits.
PILOT
The City of Buffalo currently has a favorable Payment in Lieu of Taxes (PILOT) program for mixed use projects. Under the City of Buffalo tax law, Section 485-a is a tax exemption on a declining 12 year PILOT from real property taxes for nonresidential real property that has been converted to a mix of residential and commercial uses. The rehabilitation of the property into a mix of commercial office and residential will qualify for this PILOT program. This will help decrease the operating expenses for the project over a 12 year period, with full property taxes realized at year 13. The decrease of property taxes will help raise the Net Operating Income (NOI) for the project. There is another PILOT program through the Erie County Industrial Development Adaptive Reuse Program. This program applies to non-residential buildings that have been vacant for three of more years and are 20 years old or more. This will help to further reduce the operating expenses for the project. Low Income Housing Tax Credits There are no current incentives for market rate senior housing. The only option for receiving senior incentives would be constructing affordable senior housing and seeking Low Income Housing Tax Credits (LIHTC). Making affordable units is not part of the current program for McGuire. The project also would not meet the requirements set in place by the New York State Department of Homes and Community Renewal (DHCR). There are strict guidelines in place regarding the design of the affordable units and the common space in the building. The rehabilitation of the building using historic tax credits will not allow for the adherence to these design guidelines. The Design Handbook issued by DHCR requires common space to be less than 20% of the total square feet of the building. The expansive corridors and circulation space results in buildings with common space of 50% or greater. Additionally, it is not possible to design each unit to adhere to the requirements for kitchen, bathroom, and bedroom design. The character defining features of the buildings makes it impossible to use the building for LITHC funded units.
Private Fundraising The hope to acquire additional funds through private fundraising is a hard sell. McGuire is a for profit development company, not a nonprofit doing work based on a mission. It may be possible to spin the project into the Richardson Center Corporation looking for funding to help stabilize the complex to help make each building structurally sound and ready for rehabilitation. The $13 million of structural stabilization construction expenses are having a large negative impact on the viability of the project. Based on previous charitable giving donations in Buffalo, it is extremely unlikely that there will be enough private giving to fill the gap on this project. A notable example in Buffalo to prove this lack of charitable gifts is the restoration of the Darwin Martin House. The total restoration of this Frank Lloyd Wright designed complex cost over $52 million and took 27 years to complete. Out of the $52 million spent on the project, only $21 million was raised through private fundraising.
While the Richardson Complex is a historic landmark, the building is not being restored as a museum to its history. It is being adaptively reused into the previously completed hotel, along with the McGuire proposed use of senior housing and Savarino Company’s proposed use of affordable housing. This new proposed use limits the appeal of charitable giving. The project is being developed by a for-profit developer and the buildings are being altered and undergoing a change in use. These conditions make private fundraising under the necessary development schedule highly unlikely.
Additional Developer Equity McGuire currently has an anticipated developer equity contribution of around $400,000. This is a very small percentage of the total project costs and leaves McGuire very minimally exposed financially. The desire to make a return of a minimum of 15% on contributed equity may have to be broken to help fill in some of the gap. The extremely small developer equity makes it possible for McGuire to walk away from the project without much to lose financially. This will be a concern for potential lenders for both construction loans and permanent loans. The increase of developer equity to 10% of total project costs will allow for the utilization of the Empire State Development Grant and work towards closing the gap further. This equity contribution will still produce a return during stabilized occupancy.
Conclusions
The rehabilitation of the Richardson Olmsted Complex faces many challenges. There are a significant amount of character defining features in the buildings that limit its potential new use. Federal and State Historic Tax Credits will provide some equity into the rehabilitation project, but the available funding will not be enough to pay for the very high costs. The deteriorated state of the buildings has created exorbitant stabilization and core & shell construction costs that cannot be supported by projected rental income. McGuire’s proposed use of University based senior housing poses issues in projected rental income and the ability for the market to support this new product. Changing the use to a mix of commercial office space and senior housing provides more income to the project, but still does not close the funding gap. At the current state, it is not likely that a for-profit development project will be feasible in these buildings.
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