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Jan. 10, 2013

MHN Interview: New Trends for The Michaels Development Co.

By Jessica Fiur, News Editor

Marlton, N.J.—The Michaels Development Co., part of The Michaels Organization, has announced that Ava Goldman has been named the new president of the company. MHN talks to Goldman about her new role and why she’s focusing on mixed-use developments.

MHN: Congratulations on your new role! What are some of your plans, and how will you distinguish yourself from your predecessor?

Goldman: Well, maybe I can start out by talking a bit about continuity. I worked for Bob [Greer] for many years, and what he brought to the organization was that he was a very well-respected ambassador for the affordable housing industry, a very effective spokesman. He also served as a mentor, not only to his own staff at The Michaels Development Co., but also to young people throughout the industry with his public speaking. I’d certainly like to continue those things. At the same time, we’ve been working for some time on new directions, which we’ll probably emphasize more in the coming years. One is the idea of mixed-used development. The Michaels Development Co. arose from the base of a company that really specialized in affordable housing. That’s what we did. We developed housing for many decades for low-income families and senior citizens. In the past couple of years, not only have we branched out to more mixed-income development, but now, very recently, we have gotten more engaged in mixed-use development, combining housing—affordable and market—with other land uses such as retail, institutional uses and educational uses. That’s what we’d like to continue into the future.

MHN: Do you think this is going to be a trend for all development companies because of space issues? Or is this unique to your company?

Goldman: I think it’s the way that the industry is moving, and it’s largely spearheaded by HUD. HUD has the new Choice Neighborhoods Initiative plan, which rewards developers who are thinking not only in terms of residential development, but also the entire package of land uses that can help residents rise from poverty. We’re taking our cue from there, and saying, “What else can we do, other than pure housing?” And with the supportive service programs that we sponsor for decades, we ask, what can we do to bolster the aspirations of our own residents.

MHN: What about development trends in general? What do you see for 2013?

Goldman: Interestingly, both ambition and retrenchment. Ambition in the sense that the new HUD initiatives, especially the Choice Neighborhoods Initiative, which are very ambitious, really seek to cure poverty. At the same time, retrenchment, quite frankly because of the state of the national economy, particularly the federal economy and its budget, do find practical ways of making a living.

MHN: What are some of the challenges you foresee in the coming year?

Goldman: The tax credit seems to be going pretty well, and I hear rumors that tax credit pricing is going to go down, and we really haven’t seen that yet, although we’ve certainly heard the warnings. But what we do know is that the soft dollars that we used to rely on in many of the states we’ve worked in where states have various programs to provide soft funding for affordable housing developments have really dried up over the years, for example the ones based on the realty transfer tax. Well, if real estate isn’t transferring, there isn’t much revenue being collected. It’s really a problem for us. There’s more and more competition for tax credits and less and less soft money. Where we’re turning to more and more is to go back to the concept of acquisition and rehabilitation. There are large inventories out there of owners and developers who have large inventories of multifamily properties who have gotten to the point in their lives that they don’t want to own those properties anymore. We’re actively looking for opportunities to buy those portfolios and then use tax credit financing that will allow us to pull out some equity and do some renovations.

MHN: Is there anything you’d like to add?

Goldman: I’d like to express my gratitude towards my organization. I’ve been with Michaels since 1993, and have grown with the organization. I very much appreciate the fact that I’ve been given this opportunity and this honor, and I hope to do well.

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