Adaptive Reuse Makes Buildings Better With Age

Reusing Structures Saves 4 to 46% Over New Construction

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Posted: Wednesday, August 8, 2012 2:57 pm

From eyesores to desirable living spaces, old industrial buildings are getting a second chance and being rehabilitated into green gems.

They are retired mills, factories, schools, hospitals and military installations. Some are still associated with the original businesses that occupied them, such as Nabisco and General Electric.

Whether to save or demolish old buildings has always been a question, but the latest take on adaptive reuse is to go “twice green,” not just re-purposing an older building, but making it even more environmentally friendly in its new life.

“People in general are saying they want a smaller carbon footprint,” said Eugene Diaz, principal of Prism Capital Partners. The developer is transforming a New Jersey six-story General Electric plant into rental lofts, and constructing additional for-sale town homes on the former brownfield site – while using Leadership in Energy and Environmental Design (LEED) principles.

The $60 million development, known as The Parkway Lofts, in its first phase, plans to have 365 market-rate rentals available next spring. The units – studios, one- and two-bedrooms and penthouses – aren’t exactly cheap, starting at $1,500 per month. Diaz said he thinks potential tenants will find the energy-efficiency and sustainability of the units desirable.

They might see it as, “It’s good for my wallet. It’s good for the Earth,” he said.

But for a developer, there are other reasons to go green. Project approvals are looked upon more favorably by the public agencies with the power to approve them. In addition, municipalities may already have legislation in place, such as zoning laws, with green building requirements.

When turn-of-the-century industrial buildings become new again, they can breathe life into redeveloped areas. At 21 acres, The Parkway Lofts is estimated to house about 1,000 residents after it completes its second-phase development of new town homes.

“If you bring people down to this area, you’ll invigorate the retail,” Diaz said, noting that the residents could utilize retail during the day, evenings and weekends, compared to employees of the General Electric factory that populated the area only during work hours.

With the location within walking distance of the train station, ridership on trains to New York City is expected to increase. But the underutilized Watsessing station had been neglected for many years, Diaz said. Prism Capital Partners assisted the township in a discussion with New Jersey Transit about upgrades to the station. The result was $2.5 million of improvements, which in its first phase included lighting canopies and platform work.

“They did a nice job of fixing it up,” he said. In addition, to restore the station to full service, the transit authority reactivated some of the train stops.

Adaptive Reuse for Affordable Housing

While Parkway is in the luxury housing market, developers in nearby states are adapting old buildings into affordable housing by using low-income housing tax credits.

A polyester mill, vacant since it was last used in the ‘70s, was once approved for demolition. Today Cliftex Lofts is a $32 million senior housing project, including $1.3 million in federal Low-Income Housing Tax Credits (LIHTCs) and $3.2 in state LIHTCs. In addition, state and federal historic tax credits helped bring the project to fruition.

While WinnDevelopment is in the business of affordable housing, “within the past four years, as a company, our expertise has been around renovating vacant or historical buildings,” said Elizabeth Fish, vice president of development.

Mill conversions are a specialty for this Boston-based developer, which plans to rehabilitate the approximately 300,000 sq. ft. complex into 150 senior affordable and mixed-income rental apartments. About half of the units are expected to be completed as early as May 2013.

The historical building is located 60 miles outside of Boston and 30 miles outside of Providence, R.I., in New Bedford, Mass.

New Bedford has been dubbed one of the “gateway” cities in the state with an industrial past in need of economic revitalization.

Sometimes developers are required to meet LEED or Energy Star criteria. But other times, those criteria are voluntary. Incorporating green standards makes an application more competitive for supplemental financing through low-income housing tax credits. Since WinnDevelopment owns and manages many of its buildings, going green is also beneficial by reducing operating costs.

After gaining experience in several mill conversions, WinnDevelopment has become adept at replicating its green designs and transferring them from building to building, said Darien Crimmin, vice president of energy and sustainability.

A key to energy efficiency is making sure each unit is well insulated and compartmentalized, he said. WinnDevelopment’s Oliver Lofts is an example of a LEED platinum-certified building. The energy savings is 21 percent based on the ASHRAE 90.1 standard, he said.

Oliver Lofts, two connected buildings comprising 95,000 sq. ft., once sat vacant for three decades. Today it provides 63 rental apartments, of which 42 are set aside as affordable housing.

“We strive to create mixed income developments,” said Fish. “We believe if it’s executed in a thoughtful way it’s the best way to create a sustainable community.”

The $24 million project, which opened last year in Boston, includes state and federal Low Income Housing Tax Credits as well as state and federal Historic Tax Credits.

Fish said re-purposing historical buildings is cost-effective, but not as profitable as one might think.

“Generally they are a little bit less expensive per unit,” she said. “It's not the same as one might expect… it should be a lot less expensive… (but) I have not seen that.”

Adaptive Reuse in Pittsburgh Redevelopment

The South Hills High School, constructed in 1917, is located in the Mt. Washington neighborhood of Pittsburgh, and listed on the National Register of Historic Places.

Pittsburgh-based developer a.m. Rodriguez Associates was approached by the Urban Redevelopment Authority (URA) of Pittsburgh to re-purpose a 160,000 sq. ft. high school that had been closed for more than two decades.

At South Hills Retirement Residence, 84 of the rental units are designated as affordable for seniors and an additional 22 are not restricted for income.

URA requires projects it considers for loans to meet Energy Star standards and gives lower interest rates for each level of LEED certification. South Hills boasts an energy efficient design and has obtained LEED goal certification. In addition, a co-generation unit, a natural gas turbine which provides heating and electricity, produces 30 percent of the building’s energy at its peak.

“So we’re slowing the meter,” said Ernie Sota, whose Sota Construction Services Inc. carried out the rehabilitation.

“For the owner, it helps them keep the affordable housing affordable,” he said. “For me, I can bring more to the table than just grants. Higher performance buildings is what I'm all about.”

A $500,000 grant from the Pennsylvania Department of Environmental Protection covered the cost of the co-generation plant. There was only enough funds for one, he said. The remaining funds were used to buy a 27 KW photovoltaic array.

For the $23.3 million project, the URA provided $3 million, with additional assistance from the Pennsylvania Housing Finance Agency low income tax credits, and a $1.5 million Redevelopment Assistance Capital Grant.

Both Sota Construction and developer a.m. Rodriquez recently broke ground on their next adaptive reuse project in Pittsburgh, known as Locomotive Lofts for the old office headquarters of locomotive manufacturer H. K. Porter Co., Inc.

“Pittsburgh is full of old buildings,” said Victor Rodriguez, senior vice president of a.m. Rodriguez Associates. “All the energy [for this building] was put in 100 years ago,” he said. Rodriguez and Sota shared their stories of the project at the National Association of Counties (NACo) annual conference in Pittsburgh last month.

The 20,000 sq. ft. four-story brick building, where the locomotive manufacturing company once housed its headquarters, will be doubled in size with an addition built over the current parking lot. It will be parsed into 34 market-rate rental units and 42 parking spaces.

The $5.6 million project includes a $900,000 loan from the URA.

How Green is Adaptive Reuse?

The National Trust for Historic Preservation earlier this year published a report on the environmental benefits of adaptive reuse. The Greenest Building: Quantifying the Environmental Value of Building Reuse, demonstrates through case studies that reusing buildings can save from four to 46 percent over new construction. However the warehouse-to-residence conversions often require more materials than, for example, warehouse-to-office conversions. Depending on the materials, this variable can negate the benefits of reuse.

But the study is based on 14 real buildings, and the life-cycle analysis reflects the particular inputs from those buildings, said lead author Patrice Frey, director of sustainability for the Trust. “We have to be a little bit careful,” she said. “That doesn't apply to every warehouse that's converted into a multifamily building.”

“There's still an environmental advantage associated with using that warehouse and converting it.” The warehouse-to-residence examples did not do well in two of four impact categories because of the particular materials used, she said.

The fewer building materials used in a rehab project, the less environmental impacts there will be, Frey said.

Every material has an impact, including the material that goes into insulation. Even HVAC systems. In one instance, the authors saw that installing the equipment had a net negative impact on the environment.

“But that's the exception to the rule. In more cases, you're going to get a good return,” she said.

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