Key Takeaways from Our Favorite Session at the 2024 Louisiana Housing Conference
Our team recently attended the annual Louisiana Housing Conference in Baton Rouge. Our favorite session, “Preserving Our Past, Building Our Future: Revitalization, Asset Management, and Compliance”, featured industry experts from the Louisiana Housing Corporation, Bates Development, The Banyan Foundation, and MGM Development Group. Each brought invaluable insights on restoring historic properties and maintaining their legacy for future generations. Here’s a look at the impactful topics covered—and what we took away from them:
One of the key insights was the importance of adaptive reuse strategies—taking old, unused buildings and repurposing them for modern needs, whether for residential, commercial, or mixed-use spaces. Ryan Bates of Bates Development emphasized that combining historic tax credits with the Low-Income Housing Tax Credit (LIHTC) can be a game-changer in funding, creating a robust “capital stack” to manage the substantial costs of historic preservation projects. However, Bates warned that before proceeding, developers should allow extra time for due diligence, including an in-depth evaluation of a property’s eligibility for historic credits through the State Historic Preservation Office. This preparation phase helps ensure projects comply with both state and federal requirements, which can be complex but ultimately worthwhile.
A Rewarding Journey
Navigating these regulatory requirements, however, is only part of the journey. As Rob Coats, President of The Banyan Foundation, explained, developers should not go in “blind” but rather partner closely with architects and local preservation committees to ensure each step meets historic guidelines. Coats shared his experience with the Villas at Benedictine Pointe, a redevelopment of a historic hospital in Oklahoma. He cautioned that unexpected expenses, such as asbestos abatement or structural reinforcements, can significantly inflate costs, turning a seemingly feasible project into a financial strain. Coats recommended setting aside a contingency budget of at least 10-15% to handle such surprises, as unexpected costs in older buildings can arise frequently. “At the end of the day, historic renovations cost a lot more money, but look how beautiful they are,” added Bryn Meredith of MGM Development Group, emphasizing the reward in revitalizing these architectural gems despite the challenges.
The Impact of Community Engagement on a Project’s Success
Beyond the technical and financial aspects, fostering community engagement is critical to a project’s success. Bryn Meredith shared that building relationships with local leaders and community members is instrumental in gaining support and navigating the complexities of historic renovation. The community’s investment in the project not only boosts morale but can serve as a valuable support system, especially when seeking local or state funding. Bates underscored the importance of early community involvement, stating that it can "carry you when you’re applying for funding," as people want to see these historic projects succeed. Furthermore, Bates shared his own costly experience when a lack of early testing turned a promising deal into a financial setback. Phase I assessments revealed groundwater contamination and asbestos, leading to a dramatic rise in costs. “You don’t know what you’ll get into until you get into it,” he reflected, underscoring the need for rigorous preliminary testing and planning.
Ongoing Maintenance & Compliance Post-Renovation
Managing these properties post-renovation also presents unique challenges. Dione Milton, Asset Management Administrator at the Louisiana Housing Corporation, emphasized the ongoing compliance requirements and asset management needs for historic properties. She explained that regulatory oversight and operational expense management are crucial to ensuring these developments remain sustainable long-term. Milton noted that high operational costs, from specialized maintenance to increased insurance premiums, are common in restored properties. This reality requires developers to be conservative in their budgeting and debt service ratios, ensuring the project remains viable over time. Coats added that it’s essential to plan for higher-than-expected operational expenses, including the cost of maintaining historic features, which can be substantially more than those in newer developments.
The session showcased how preserving historic structures is not merely a technical endeavor but a community-centered mission requiring collaborative planning, flexibility, and a vision for both preserving the past and meeting future needs.
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