Most towns in America have more than a few run-down, abandoned buildings. They sit as eyesores on Main Streets while the community watches — or tries to ignore them. They require too much time and investment to attract developers to restore them.
They are an aesthetic tragedy and can pose a public health risk, but the bigger heartbreak is the loss of opportunity. People can’t live in condemned homes. Businesses can’t operate out of unsafe buildings. Communities end up stagnating because developers simply can’t make the numbers work.
Robert Obear, founder and owner of Obear Construction, saw several of these buildings in Millers Falls and up the road in Turners Falls, two towns in Western Massachusetts. But instead of eyesores, he wondered if they might be opportunities.
“People told me I was crazy to take on the project, and honestly, I had my doubts,” Robert has said on more than one occasion.
Robert’s vision included transforming three buildings in Millers Falls into four affordable housing units, two residential units, three offices, and a first-floor commercial unit. In all, the project would create 11,000 square feet of useable space.
In Turners Falls, he wanted to create eight affordable housing units at a previously abandoned paper mill along the Montague Power Canal Reservoir, which would open up 10,000 square feet of useable space.
The cost of the projects came to $2 million.
An enlightened businessman and developer, Robert met with the Cherrytree team, looking for a way to reduce costs in order to make the project more attractive to investors.
In Robert’s case, all the properties within the scope of his project fit historic criteria. Two of the Millers Falls buildings on East Main Street were built in 1902, and the Powers Block building on Bridge Street was built in 1897 — which the Massachusetts Historical Commission recognizes as historic buildings. The Turners Falls building was originally built in the late 1800s and is within the Turners Falls Historic District.
By obtaining historic rehabilitation tax credits for the project, Cherrytree firm was able to arrange for $600,000 in tax credit equity for Robert — or a project cost reduction of 30 percent! Financing was just recently completed.
This type of revitalization project illustrates how tax credits can give both developers and investors the power to re-energize America’s small towns through socially responsible development. In Robert’s case, by preserving and breathing fresh life into these historic properties his company has attracted praise throughout the Montague region and a positive bottom line as well.
This Western Massachusetts project has given twelve families an affordable place to live, as well as a small business entrepreneur a chance to take a shot at success. Yes, there’s already a small business operating out of the Millers Falls space.
Now, people talk to Robert about his project in a very different way.
“Everyone tells me how much the renovated buildings have improved both neighborhoods. It feels good to make that much of a positive impact,” he says.
If you’re a developer looking to reduce costs, or an investor looking to decrease income tax liabilities, give us a call at Cherrytree Group and see how our tax credit consulting, brokerage, and syndication services can help you give a fresh new stock of safer, affordable dwellings and commercial space to the community.