The Michaels Organization on Its New Affordable La. Communities
- Apr 18, 2014
Shreveport, La.—The Housing Authority of Shreveport, La., and The Michaels Organization recently opened an affordable community called Cypress Landing, and also broke ground on another affordable community called Renaissance at Allendale. MHN talks to The Michaels Organization’s lead developer on these projects, Milt Pratt, about why these apartments are important for the community.
MHN: Tell me about Cypress Landing.
Pratt: The Michaels Development Company has a long-term partnership with the Shreveport Housing Authority. We’ve been working closely with them for three or four years to put together a redevelopment strategy for a number of their assets. It’s been a positive working relationship. [Cypress Landing is] one of their assets that’s not in very good condition in need of a major recapitalization and operating very poorly. It was an opportunity for Michaels and the Housing Authority to come up with a solution. And that’s what we did on the Cypress project. It was a complete rehabilitation—and a significant rehabilitation—of an existing 129-unit property in Shreveport. We really did transform the lives of the families that lived in the community—we were able to keep a significant number of the original residents that we had at the property when we started the rehab, we maintained the affordability of the community and we wove it back in to the overall fabric of the neighborhood.
MHN: Did you experience any challenges?
Pratt: Getting a rehab done is always a challenge, but what we did was, in partnership with the Housing Authority, was use our affiliated construction company to undertake the rehabilitation. Like every rehab, when you go into a unit and you want to do cabinets, floors, windows, doors, you always realize there’s a few extra things you need to do. So having a sufficient contingency was a little bit of a challenge, but again, we overcame it working in partnership with our management company as well. The families who lived at this community were also great. Many of these families had to move from their old units, and some of them had to move from old unit A to old unit B until they moved into a newly rehabbed unit. So the families that lived in the community were patient. We made sure that we took care of our families first. This is an in-place rehab, and we went from the east side of the property all the way to the west side, gave updates to the community center, landscaping, parking improvements, a better roof system was put in place, so it was a major, major upgrade to an existing troubled asset that the Housing Authority had for a number of years. It was all about a solution for a problem, working in partnership with the Housing Authority and the city of Shreveport.
MHN: What about the Renaissance at Allendale community?
Pratt: A little-known fact, the city of Shreveport is a movie capital. The stakeholders have made an investment in the neighborhood called Allendale, and the city has amassed a significant quantity of parcels there. The Housing Authority has demolished the Naomi Jackson Community that was functionally obsolete some number of years ago, and they realized they had a community where there was a lot of vacant land, there was a lot of disinvestment, and they said, “We’re here. We own this land, and we’re going to bring in a development partner who’s going to finance the construction of the first new homes built in the Allendale community.” This is a neighborhood that has had some disinvestment over the years, has had a major population decrease, but it’s close to downtown. And, for us, that means the families that live at this community, most of which are going to be workforce-housing types of families, are going to be people who work in downtown Shreveport and may be part of the movie industry. This is a neighborhood that has had a significant decline in population, income, investment and resources, and the Housing Authority owned this piece of land, and they wanted to stay. They said, “We’re going to make it about trying to bring new investments into this neighborhood.” So we worked with them to secure tax credits, monies that they had made available. We brought investors together, and we were able to put together a successful project. Shreveport is an important city for the Michaels Organization.
MHN: Are you planning any other developments there?
Pratt: There’s a second phase of the Renaissance at Allendale, and we’re definitely excited about that second phase. We’re hoping that it’ll be competitive in the next round of tax credit financing from Louisiana Home Corp. We anticipate it’ll be competitive.
MHN: Is there anything you’d like to add?
Pratt: Both of these projects happened because a lot of people in the city of Shreveport, the Housing Authority, the people in the city, are all pulling in the same direction and are trying to create housing for people who just happen to be low income. It’s also about job creation. If you look at how much money we just spent in these neighborhoods—one project was $7 million, the other was about the same. More than $10 million was spent mostly in the city of Shreveport, mostly with businesses and services and people who live in metropolitan Shreveport. This is a huge investment at a time when America needs jobs.