8/11/2019 TCA August 2014 - Gorman Company

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TaxCreditAdvisorP U B L I S H E D I N A S S O C I A T I O N W I T H T H E N A T I O N A L H O U S I N G & R E H A B I L I T A T I O N A S S O C I A T I O

August 2014 | Volume XXVI No

LAs New Oasisfor HomelessFemale Vets

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LIHTC Fund YieldsTrend Downward

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Tom CappsDiverse Deal Menu

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Resident Services

Escobedo at Verde Vista

Mesa, Arizona

Developed by Gorman & Company, Inc.

Photo by Mike Small Photography

Are They Working at Your Property?PAGE 24

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Low-Income Housing Tax Credit

32 Tax Credit Advisor | August 2014 www.housingonline.com

The way that Tom Capp and Gorman & Company,

Inc. approach the development of multifamily

rental housing, historic preservation, and mixed-

use real estate projects is to always be on the lookout

for new opportunities, funding sources, and lessons.

We really consider ourselves community developers

as much as we do multifamily developers, says Capp,

the companys chief operating officer. We dont go out

and pick a site and say, Hey, lets go develop a projectthere. The vast majority of our developments have

been identified as community priorities by the city, a

significant nonprofit, or a housing authority.

Company Background, Geographic Focus

Based outside Madison, Wisc., Gorman & Company

employs 235 people nationwide, owns and manages

almost 4,000 housing units, and manages about 1,100

units for other owners. The firm was established 30 years

ago by CEO Gary Gorman, a former lawyer who repre-

sented developers and syndicators. Capp, born and

raised in Chicago, joined the company 20 years ago

from a planning and government background, starting

as director of real estate development and then moving

up to executive vice president and later to COO.

While primarily a development outfit, the vertically-

integrated firm also has in-house construction, architec-

tural design, property management, and asset manage-ment divisions.

As our development leadership takes a project

through from beginning to end, we have all of those

functions at the table, says Capp. Thats our business

model. We try to capture the strengths of the integration

of all of those elements and the histories and lessons

learned in each of those areas.

The company currently focuses its development in

The Diversification StrategyTom Capp and Gorman & Company Develop a Variety of Projects,

Tap Different Funding Sources

Capp, continued on page 34

DEVELOPER PROFILE

Villard Square, Milwaukee, Wisconsin

Developer: Gorman & Company, Inc

Photo courtesy of Gorman & Company, Inc

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Wisconsin, Illinois, Florida,

Arizona, and new this year

Colorado. In addition to

the Wisconsin headquar-

ters, the company has a

satellite office in each state

(Chicago, Phoenix, Miami,

Denver) run by a market

president who finds and

develops projects in the

state. They receive full sup-

port from what Capp calls

the mother ship in

Wisconsin. The market

presidents, experienced

and well-regarded in their

states, generally come from

the nonprofit housing or

housing authority worlds.

Our market president is often the most respected

developer in their state, says Capp. They take a deep

dive in their state, and their integrity is unquestionable.

Gorman & Companys projects are primarily infill

developments, mostly in urban areas, and frequently in

challenged neighborhoods. The lions share of what

we do is multifamily housing, says Capp. And within

that space, a large percentage is either workforce housing

or low-income housing tax credit developments. The

company has completed about 80 LIHTC projects to date.

In addition, the company develops market-rate

housing, commercial, and mixed-used projects. In many

cases, the firm utilizes federal and sometimes also

state historic tax credits, alone or in combination with

housing tax credits.

A number of its affordable apartments target local

artists and contain live/work units with studio space as

well as galleries.

Variety of Projects

A major community development and revitalization

project is The Brewery in Milwaukee, Wisc., a redevelop-

ment site near downtown that once belonged to the

Pabst Brewing Company. Gorman & Company is

methodically developing projects from the 26 historic

buildings and sites that were part of the brewery com-

plex. These projects include a mix of historic rehabilita-

tion and adaptive re-use of some of the existing build-

ings, along with demolition of others followed by new

construction. We committed to the city and other play-

ers, before the recession, to play a significant role in

redeveloping that area, says Capp.

The two projects completed so far are:

Blue Ribbon Lofts, a 95-unit mixed-income apart

ment development financed largely with federal

low-income housing and historic tax credits.

The Brewhouse Inn & Suites, a 90-room boutique

hotel and restaurant funded partly by historic tax

credits and by equity raised from Chinese investor

under the federal EB-5 program.

Currently under construction:

A 60,000-square-foot office building funded byequity raised from Chinese investors under the

EB-5 program;

Frederick Lofts, a modern-design, 100-unit

market-rate apartment project funded with direct

equity investments from a Chinese development

firm that Gorman & Company met while raising

EB-5 funds in China. Capp says the market-rate

Low-Income Housing Tax Credit

34 Tax Credit Advisor | August 2014 www.housingonline.com

Capp, continued from page 32

Capp, continued on page 35

Brewhouse Inn & Suites, Milwaukee, Wisconsin

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Low-Income Housing Tax Credit

www.housingonline.com August 2014 | Tax Credit Advisor 35

development will provide a new kind of hipster

housing in this part of downtown.

Elsewhere, Gorman & Company is developing:

Lions Ridge Village Apartments, in Vail, the firms

first project in Colorado. This involves the con-

struction of four new apartment buildings with a

total of 114 units located on part of a 10-acre site

occupied by an existing apartment complex pur-

chased by the town of Vail. The town is providing

the land through a 50-year ground lease. Seventy

percent of the new apartments will be

workforce units, deed-restricted as

housing for employees of local busi-

nesses, including the local ski resort.

Coffelt-Lamoreaux Park, Phoenix,

Ariz. In partnership with the Housing

Authority of Maricopa County, the

company is redeveloping and convert-

ing 296 units of public housing to

assisted rental housing under the fed-

eral Rental Assistance Demonstration

program, using federal housing and

historic tax credits and tax-exempt

financing. The firm has a master

development agreement (MDA) with the housing

authority to redevelop all of its public housing.

Paradise Pointe Senior Residences, a new 46-

unit LIHTC development for seniors in Monroe

County in the Florida Keys, Gorman & Companys

third tax credit project in the Keys.

Examples of mixed-use projects completed by

Gorman & Company include:

Villard Square, in Milwaukee, containing 47apartments on three floors above a new 20,000-

square-foot city library. The apartments were

designed as grandfamily housing for grandpar-

ents raising their grandchildren.

Grand River Station, in La Crosse, Wisc. This

new construction project combines a city transit

center with 72 affordable and market-rate apart-

ments. The development also includes 20 for-sale

condos on upper floors as well as retail stores and

gallery space at the ground level.

In the last few years weve had pretty good luck in

mixing uses in different ways, says Capp.

The COO says the company is stronger and differen

than it was five or six years ago as a result of changes

made in response to the recession. According to Capp,

the firm used to tie its fortunes largely to low-income

housing tax credit development. During the downturn, it

decided to diversify both in the types of projects it

develops as well as the funding sources used.

One new source has been foreign investor capital

procured through the EB-5 program. This

program fast-tracks the issuance of visas

and ultimately green cards to foreigners

(and their families) who invest $500,000 or

more in specific projects or businesses in

the U.S. Solicitation offerings to foreign

investors must be made through federally

designated regional centers. Gorman &

Company has successfully raised EB-5

capital for two projects so far and antici-

pates more going forward. In fact, the

company has established its own EB-5

regional center to expedite the process of

raising foreign investor capital for real

estate projects in Chicago, Milwaukee, and other parts

of Illinois and Wisconsin.

Love for Development

Capp, an affordable housing veteran, continues to

enjoy being a developer.

I came into the development side from the plan-

ning and government worlds, which I loved. But there

you do policy work and plans. You often dont see real

tangible results.

What I really love about our role as communitydeveloper is getting to creatively devise how to build

something that ends up being tangible. Once its built

you are able to kick it and take your kids by it.

Capp also relishes improving the lives of the resi-

dents of the companys developments. When you meet

somebody who lives in quality housing that they never

had an opportunity to have before, thats very satisfy-

ing, he says. I love the very real effects you have on

peoples lives.

Capp, continued from page 34

TCA

The COO says the

company is stronger

and different than it

was five or six years

ago as a result of

changes made in

response to the

recession.