April 20, 2015
Congratulations to The City of Bridgeport and Forstone Capital, LLC on being selected as a semi-finalist in the Creative Finance Category for the NDC Academy Awards 2015. The NDC Academy Awards Semi-Finalists represent some of the most innovative and impactful developments changing the lives for residents in underserved communities across the country, NDC is honored to highlight the achievements of these organizations at the NDC Academy 2015.
Mechanics & Farmers’ Bank Redevelopment – Bridgeport, CT
Approximately 20 years ago, the Downtown Bridgeport area was experiencing disinvestment, resulting in vacant and underused buildings. One of the more prominent vacant buildings in the area was the Mechanics and Farmers Bank on Main Street. This masonry and stone neoclassical style building had been vacant for 25 years and during the winter months would become a target for those seeking shelter. In the last 10 years, various stakeholders worked together to reinvent the downtown commercial corridor that included updated zoning and infrastructure improvements. The reconfiguration of the Commuter Rail Station that included the relocation and expansion of the City’s main bus terminal to better serve the downtown area was 1 block way from the Mechanics and Farmers Bank. And directly across the street from the bank was then renovated historic Mclevy Green park which was now becoming a hub of cultural and social activity for the downtown area that includes summer concerts, ethnic celebrations; and public art events.
The Mechanics and Farmers Bank project is the reactivation of Historic Building in a downtown Transit-oriented development (TOD) area that utilized a Mixed-Use program and Mixed-income Housing components. The building is a 40,000 square foot historical building located on Main Street and features oversized columns across its marble, granite and brick façade.
The adjoining building on State Street is a non-historical building of 20,000 square feet. The two properties are located in Bridgeport Downtown South Historical District. The City had taken title to the vacant properties which needed significant work and issued an RFP in 2009 and Forstone Capital became the successful bidder. After acquisition, Forstone located an anchor tenant for the project and created a $18 million historic renovation project with mixed-use programming. Project consists of 20,000 SF feet of commercial office space for the architectural firm of Fletcher Thompson, 2,000 SF retail space and 30 units 1-bedroom mixed-income housing. The redevelopment plan connected the two properties into a single project that respected the historical nature of the bank building while creating modern layouts in the rest of the project. The result is an impressive renovation of the old bank building that retains the historical fabric of property while seamlessly connecting it to other modern areas in the project.
Residential living downtown, prior to the last decade, was primarily limited to a low-income housing co-op and two high-rise senior complexes. A daytime population of approximately 10,000 and nighttime population of 2,400 proved challenging in attracting retailers that served both the populations. Downtown Revitalization was recognized as the first step in the city’s re-emergence two decades ago. Early efforts focused transportation infrastructure and streetscape improvements. Efforts have shifted the revitalization of the Main Street corridor itself with the intent of attracting residences and businesses into the downtown area. The Mechanics and Farmers Bank Redevelopment project was one of the early City supported projects coming out of the 2007 vision of the downtown area. The project was not only a catalyst for the 12 redevelopment projects in the downtown area at various stages of construction today; it has also become a model for a number of projects that followed. New construction or substantial rehabilitation of existing structures in Downtown Bridgeport can be challenging due to achievable market rents. Many of the projects here cannot be financed using conventional debt and equity products and need more innovative approach to close the gap. NDC was a collaborator on the Mechanics and Farmers project and worked on the development of a more robust capital stack that included lower cost funding sources targeted to specific parts of the project. Part of challenge of reactivating older historical structure is the real estate tax burden and its effect on debt underwriting. NDC advised developing a tax PILOT solution based on the Effective Gross Income of the project. This allowed increases in the real estate tax that would not be disruptive to the debit structure. This PILOT solution has since been incorporated into 4 other redevelopment projects in the downtown area.