Heritage Ohio Goes to Salem
Last week I was fortunate enough to spend the week in Salem, Massachusetts for a weeklong training session on the topic of Historic Real Estate Development Finance. The training was put on by The National Development Council, The National Trust for Historic Preservation and The 1772 Foundation.
While the topic of the training may sound painful, it was incredibly informative and fits quite well with the direction of our organization. In the coming months, we will be working with the Ohio Department of Development in helping to administer the Targets of Opportunity Grant. Like other grant programs, the Department of Development aims to see the grant used in a manner that will generate the greatest impact. Our role is to help determine if the proposed projects are feasible and this is where understanding real estate finance plays such a crucial role. A project must include a realistic pro-forma to be taken into consideration for the funding. A pro-forma is a series of financial statements that help paint a picture of the fiscal feasibility of a project, including vacancy rates, lending terms, owner equity, construction costs, lease rates and other pertinent information. These details will help ensure funding flows towards projects that have a high likelihood of being completed.
Beyond the Targets of Opportunity Grant, Heritage Ohio aims to play a much greater part in assisting Ohio communities in assessing local real estate project feasibility. Vacant and underutilized property is one of the greatest revitalization challenges we face in the state and we believe providing civic leaders and property owners with a greater understanding of the costs, will be a major step in beginning to combat the problem. If vacant property is a community issue, civic leaders should make it a priority to understand why properties are not being developed and what can be done to address the issue. At the end of the day, community leaders should be able to determine if there is a gap between developing a building and the cash flow it can expect to return at current lease rates. If there is a gap, then policies must be considered to help address a gap, if not, then other factors are at play and should be identified.
We also are in the process of creating a new presentation titled “Developing Property Owners into Developers.” The goal of the presentation is to help property owners with underutilized buildings realize that their asset retains value and potential and redevelopment is a viable option that can prove quite lucrative.
Salem was more than just “fun with finance.” I feel very fortunate to work for an organization that is willing to invest in its employees to develop greater skills to meet the challenges of the position. The National Trust for Historic Preservation selected the host community for the training and I could not have been more pleased. Salem is a beautiful waterfront town just north and east of Boston. The Hawthorne Hotel, a National Trust Historic Hotel of America, was the training location. Salem is a very interesting town and elicits mixed feelings. The city is the home to many of the oldest structures in The United States, including numerous houses from the 1600’s. At the same time, the city is inundated with witch themed shops and can almost overwhelm a visitor. There is a great deal to see and do and the museums and architecture are unmatched, but one must be prepared to deal with the cottage industry of witch tourism. The training took place in the last week of September, but the fever pitch of October and the impending holiday was almost palpable on the street.
I was fortunate to attend such a great training and bring back knowledge that will assist me in performing my job of helping Ohio communities with their downtown revitalization needs. Like most everyone I know that works in revitalization, the opportunity to get out and see other cities and downtowns, is always such a great experience and provides a very different perspective. If you get the chance, I highly recommend making a visit to Salem, but depending on how you feel about Halloween, you may want to carefully consider when you visit.