L'Enfant Trust Revolving Fund

A recent Historic Macon Foundation restoration

Raising funds through properties workSeptember 28, 2012

Wednesday, October 10, 12

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

Today’s talk

1. History of Historic Macon’s revolving funds1.1. Saving mansions1.2. Vernacular houses1.3. Neighborhood revitalization1.3.1. Huguenin Heights1.3.2. Beall’s Hill1.3.2.1. Partnerships1.3.2.2. Results1.4. Spot Properties2. Case studies3. Risks4. Ideas5. Summary



Motivation



First property



Vernacular buildings



Small area



Small area

Relative size of Huguenin Heights compared to Pleasant Hill



Vernacular buildings



Economic Development

Homes sold Home Ownership Crime


http://www.historicmacon.org





10%







66%

100%

10%







66%

100%

10%

100%

15%





Obsolete housing demolished



Revitalization Partners

!

Each partner pays $75,000 in dues/ year

into a revolving fund





Days on Market

0

38

75

113

150

Historic Macon National Average

Days on Market




Property Tax

$40,000/ year






Property Tax Sales Tax

$40,000/ year $60,000






Property Tax Sales Tax Jobs

56 Jobs$40,000/ year $60,000




Recent Beall’s Hill Projects





Recent Beall’s Hill Projects

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





Current management

•Executive Director identifies projects, drafts pro formas•ED negotiates and signs contracts for acquisition•Full-time interior designer drafts rehab proposal•Before acquired, Preservation Committee and Board approve acquisition, rehab and sale•ED either hires a General Contractor or Construction Manager not-at-risk (usually the latter for rehab)•Next report to the Board is net performance after sale



306 Orange St.



923 Washington Ave.



1212 Ross St.


Spot Properties






Revolving Funds

Preservation Fund Knight Fund Hills and Heights FundPeyton Anderson Fund Facade Funds



Revolving Funds

$800,000




Revolving Funds

$300,000

$800,000




Revolving Funds

$600,000$300,000

$800,000




Revolving Funds

$550,000

$600,000$300,000

$800,000




Revolving Funds

$200,000

$550,000

$600,000$300,000

$800,000




Revolving Funds

$200,000

$550,000

$600,000$300,000

$800,000


•$2.4 million total



Risks

Management Real Estate challenges

•Staff specializing in Real estate is expensive•Even if you outsource construction, you need more staff• Board and staff relationships can strain•Have to be a market expert to acquire and sell property• Very hard to produce enough operating income to cover additional staff, much less help with existing operations

• Preservation and profit compete• Resource intensive• Without doing an entire neighborhood, you don’t control comps, infrastructure• Risks multiply with environmental concerns, market fluctuations• Some properties are worth less than $0• Every neighborhood has a different target buyer, and you don’t have the marketing money to reach them





Ideas

•$1 million in endowment yields 5%• Same funds used in revolving fund•Turn twice a year (6 month projects)• Take a 6% developer’s fee/ project• Net a 12% return instead of 5%





Ideas

•In kind donations have never been a source of savings•Prefer to pay for work and products and have vendors make donations-- cleaner for taxes and benefits operating•Allow us to develop new expertise•Having rehab experience makes it easier to deal with the private market•Sometimes you can use real estate know-how to get a private developer to save a property instead of you!•Also builds relationships with new donors




Before & Afters





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/

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 $130,000 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


Sales Sheets


L'Enfant Trust Revolving Fund

Documents

Transcript of L'Enfant Trust Revolving Fund