Case Study

Prospect Yard In Cleveland

6 min read

Parking is Easy at Rehab of Old Auto Building

The Stuyvesant Motor Co. building in downtown Cleveland is a landmark structure from the city’s manufacturing heyday but had also been a decaying eyesore for decades. Now it has been turned into 42 units of affordable housing through an adaptive reuse that has been recognized by an award from Heritage Ohio.

Developer Woda Cooper Companies discovered a few construction challenges in converting the 100-year-old auto facility into housing, but the occasional bit of serendipity as well.

“One interesting aspect is that because the original building was designed to move automobiles inside, we were able to easily incorporate indoor parking,” says Jeffrey J. Woda, managing director of Columbus, OH-based Woda Cooper.

And the housing on the higher floors has been awarded the Best Upper Floor Residential Rehabilitation by Heritage Ohio, the state’s historic preservation and Main Street organization, which fosters economic development and sustainability through preservation of historic buildings.

This award “is presented to one or more individuals, tenants or property owners who have completed the best interior single- or multifamily upper floor residential project in a downtown mixed-use building based on proper preservation techniques,” according to Heritage Ohio.

Though definitely historic, the building was a shambles at the start of the preservation effort.

The four-story building, expanded in 1919 to its current five stories, served as a sales showroom, storage facility and service hub for the Stuyvesant, Hudson and Essex brands until the Great Depression era forced an end to the brands, according to Woda.

After the Stuyvesant’s heyday, it was home to a tire service center, the U.S. Coast Guard and a printing company before it eventually became vacant.

Not An Easy Task
The century-old building wasn’t an easy renovation. “Prospect Yard required significant restoration efforts,” says Woda. “We installed new ten-foot replicated and energy-efficient windows where the expansive first floor storefront windows had been in-filled with brick decades ago. This brought back a 1920s showroom appearance.

“We carefully maintained original motor company painted signs and advertising on the North and East elevations. We also replicated other historic windows to preserve the industrial façade that is found throughout Cleveland. We renovated internal walls and flooring, installed new insulation, heating and cooling systems, and plumbing so the building operates like a new building.”

The results, though, were positive. “Many of these restoration details represented construction challenges but proved to be some of the most endearing features of this building,” says Woda.

The $12.4 million financing, available to residents earning 30 to 80 percent of area median income, is a serious preservation of affordability in the city. Its loft-like affect, with huge windows had the developer thinking of doing market-rate conversions at first.

“However,” says Woda, “we saw the serious lack of affordable housing options for Cleveland’s workers in areas, such as retail, hospitality and healthcare industries, and so we shifted to our core business of affordable housing early in the development plan.”

A great location, including proximity to transit, checked a lot of boxes for affordable housing. Woda notes it is convenient to the Campus District of Cleveland State University, Stephanie Tubbs Jones Transit Center and the new Center for Innovation in Medical Professions. Prospect Yard is only footsteps from over a dozen affordable eateries, coffee shops, churches, medical clinics, service agencies and the City’s “Health Line” Rapid Transit, he says.

The financing was an unusual mix on the tax credit side. “We paired Federal and State Historic Tax Credits with four percent Low Income Housing Tax Credits, which was a fairly new financing strategy in Ohio at the time of planning the development for Prospect Yard,” says Woda.

“Traditionally, these types of historic adaptive reuse developments were funded with scarce nine percent tax credits. By leveraging the four percent LIHTCs with historic credits, we were able to utilize an under-subscribed resource to create new affordable housing.”

Deal Partners
CREA, LLC was the investor in the tax credits and Federal Historic Rehabilitation Tax Credits. The Ohio Housing Finance Agency provided a bridge loan and Key Bank a construction loan, with Erie Ohio Capital CDFI Fund, LLC providing another permanent loan. The City of Cleveland contributed HOME funding. The Woda Cooper Opportunity Zone Fund Limited Partnership made an equity investment. The Ohio Development Services Agency issued the State Historic Preservation Tax Credits.

Woda Construction was the contractor. Perspectus Architecture provided the design work that caught the eye of Heritage Ohio when it came to award time.

“Perspectus was enthusiastic because the industrial layout of the building lent itself well to a rebirth as housing,” says Woda.

“The original and restored features of the building give the apartments a high-end, industrial loft feel not often accessible to residents in modern affordable housing developments. The design and careful construction results were undoubtedly noticed by the Heritage Ohio judges.”

Prospect Yard, which features one- and two-bedroom units, is Woda’s first development in Cleveland, although the company does have other developments in the greater Cleveland area.

Woda Cooper says it specializes in affordable housing through new construction, acquisition rehabilitation and adaptive reuse. “We have restored and adapted upwards of 20 historic properties, including early 20th Century manufacturing sites, schools, bank buildings and other historic sites. Historic properties represent a small fraction of our affordable housing portfolio, which consists of approximately 400 communities and 16,000 units.”

The firm embarked on an unusual ownership structure for a housing developer (Tax Credit Advisor, July 2018) by implementing an Employee Stock Ownership Program (ESOP) for its hundreds of employees.

Each year, depending on the company’s performance, shares are allocated to an employee to give them an ownership stake in the firm. This provides incentive, as employees will do better as the firm does better. When the employee retires, the firm buys out the ESOP shares, making this an additional financial resource for retirement planning.

Woda also feels that giving employees a reason to stay around for many years can be part of succession planning, developing a block of very seasoned employees able to take over when current partners retire.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.