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Albert Rex

Albert Rex
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Reflections on 2015

Posted by Albert Rex on Thursday, December 31, 2015

It is hard to believe 2015 is coming to an end and that in a few short weeks buildings built in 1966 will be eligible for the National Register, providing even more opportunity for historic tax credit projects. This is not the only reason the Partners at MHA are thankful. 2015 has been a tremendous year for our firm and we owe a great debt of gratitude to our associates and our clients. 

Our associates have risen to every challenge this year. The number and complexity of our projects has increased significantly and our able staff has been able to meet the demands of delivering to our clients the guidance necessary to secure hundreds of millions of dollars of historic tax credits. We are thankful for all their efforts. 

Our clients have provided us with the opportunity to work on some very creative and monumental projects across the country. Their entrepreneurial spirit gives them the vision to see an old building as an opportunity and we are honored to help them make those visions a reality. We feel very fortunate and proud to be a part of so many award-winning developments that have created hundreds of hotel rooms, affordable housing units and offices and retail spaces.

Lastly, we recognize that it takes a village to make historic rehabilitation projects successful and we are thankful that we have the opportunity to work with so many great professionals; from lawyers and accountants to architects, engineers and contractors. We consider ourselves fortunate to have worked with many of you through the years and look forward to doing so again in 2016.

Here are some of the projects we had the good fortune to be a part of:


Burnham Building
Commercial & Retail | Boston, MA


A-Mill Artist Lofts
Artist Housing | Minneapolis, MN


Cottage Square Apartments
Affordable Housing | Easthampton, MA


Arc at Old Colony
Student Housing | Chicago, IL


The Westendorff
Hospitality | Charleston, SC


Monsenor Romero Apartments
Affordable Housing | Washington, DC


NoDa Mills
Affordable Housing | Charlotte, NC


Commercial | Worcester, MA


Chicago Athletic Association
Hotel | Chicago, IL


Senior Suites of Norwood
Senior Housing | Chicago, IL


Transforming Historic Main Street using HTCs

Posted by Albert Rex on Thursday, December 10, 2015


Downtown Waxahachie, TX | Photo from

Main Street seems to be on a lot of people’s minds. We are encouraged to “shop small” by American Express and the National Main Street Center on the Saturday after Thanksgiving in ads with fall foliage-lined streets. Political candidates evoke “Main Street” to show their support for small business ownership.

Last month I got to spend some time in Waxahachie, Texas at the Texas Downtown Development & Revitalization Conference where I had the chance to talk about the use of historic tax credits on America’s Main Streets. I shared my panel with Michael Scott, Assistant City Manager for Waxahachie, who discussed all of the other tools in the toolkit for Texas downtowns. While MHA has the opportunity to work on many large projects in world-class cities and rural communities across the country, it is important to talk about Main Streets and how the HTCs can help revitalize them.

Shortly before attending the conference, the Historic Tax Credit Improvement Act of 2015 (HTCIA) was filed in congress by Rep. Mike Kelly (R-PA) and Rep. Earl Blumenauer (D-OR). According to the National Trust for Historic Preservation, the legislation makes long overdue changes to the federal Historic Tax Credit to further encourage reuse and redevelopment in small, midsize and rural communities. They feel that main streets across America will have a stronger tool to help breathe new life into their historic buildings. This appears to be the case as the bill includes an increase of the credit from 20 to 30 percent for projects with rehabilitation expenses of less than $2.5 million. This would certainly help inject new private investment into smaller and more rural communities. 

The bill includes other improvements such as simplifying the process for the transfer of historic tax credits to investors for projects under $2.5 million. If passed it would be the first major changes to the federal Historic Tax Credit since the 1986 tax bill and would have a large impact on smaller projects, whether they are on Main Street or a rural byway.

Main Street projects tend to be smaller in size and are often undertaken by an existing owner as opposed to a new developer. The tax credit syndication process, finding and bringing an investor into these smaller transactions, can be a difficult one as the legal and accounting costs for deals of this size can be the same as the costs for projects two to three times this size, resulting in less money for the project. The good news is that there are ways to mitigate some of these issues relative to scale. For instance, a local bank that is financing the project might be able to utilize the federal credit making the transaction much less cumbersome from an accounting and legal perspective. In some states, like Texas, the state tax credits can legally be transferred or sold making them real equity in the project. Transaction costs for state credits are minimal resulting in a greater net proceed for the project. And in some cases, the owners of the buildings may be able to utilize the federal credit themselves as they are a dollar-for-dollar reduction in federal income tax.

Main Street projects can benefit from the use of HTCs if the owner/developer is willing to be patient and put together the right project team. Local economic development organizations (like Main Street Programs) and state officials are knowledgeable about additional Main Street incentive programs that exist and how they can be used together to make a small-scale historic rehabilitation work.

And we know for certain that America benefits from our historic Main Streets. Main Streets are often some the most architecturally significant collection of buildings in a town. Even in small rural areas, people are returning to their historic commercial districts to shop or live. Historic tax credits are often an untapped tool for the rehabilitation of important resources but like most of our projects the rehabilitation of one has a catalytic impact to spur development of many and transform the Main Street landscape.

Topics: policy

Trends in Historic Multi-Family Developments

Posted by Albert Rex on Monday, October 19, 2015

Cottage Square Apartments | Easthampton, MA
Cottage Square Apartments | Easthampton, MA

Historic preservation and multi-family housing have a long history together, especially in the capital stack of affordable housing projects throughout the country. Twinning historic and low income tax credits has been going on for a long time and has produced thousands of units of good quality affordable housing. Certainly the pairing of these two incentives will continue to drive affordable housing production, but continually we are seeing the historic credit help produce other forms of housing as well.

From our vantage point, we have a great view of the projects that benefit from the incentive. For instance, MHA Northeast is currently working on a large student housing project in Worcester, MA, a market-rate project in the heart of Lowell, MA, a high-end multi-family project in Saratoga Springs, NY, and also housing for Millenials in Tulsa, OK.

But beyond utilizing historic credit as a part of financing, these projects share another important feature. They are all in locations that are walkable or in close proximity to transportation.

Despite plunging oil prices, many people are not interested in getting into their cars and driving. They want to be able to walk around the corner or take an Uber to dine, shop, or enjoy local entertainment. And they want to do it somewhere that has a sense of place. There are rare occasions where this can be achieved in a new setting like a lifestyle center, but in most cases it’s returning to cities and town centers where density is not a dirty word, infrastructure is already there (albeit in need of upgrades) and there is plenty of potential stock in the form of historic buildings.

It appears that the American dream has shifted somewhat as couples are waiting longer to have children and empty nesters are moving back into city and town centers. All of this spells a positive future for the multi-family housing market and the reuse of historic buildings.

As this trend moves forward, MHA is seeing more and more conversions of downtown office buildings to mixed-use residential and retail. Many mid-century mid-rise buildings lend themselves to this type of conversion, with the added benefit that density already exists there. Permitting an existing mid-rise conversion is much easier then permitting new construction of the same size. And in smaller market cities there may be additional entitlements like the Housing Development Incentive Program (HDIP) in Massachusetts, which is geared towards the creation of market-rate housing.

“Urban” was not necessarily a dirty word, but it certainly used to conjure up more images of grit and congestion. Now people think of it more as hip or vibrant, and “tired” buildings of the 1950s and 60s are now development opportunities of the new millennium; opportunities that can benefit from state and federal historic tax credits.

This trend towards downtowns and urban living does not appear to be a flash in the pan, and that is a good thing for the multi-family housing market and for historic urban centers around the country. In less than five years, buildings from 1970 will be eligible for historic designation and the term “historic” will include Brutalist buildings. These newly historic buildings, with new green roof or urban farms on top, will likely be the next great places to live.

Reflections from the Novogradac HTC Conference

Posted by Albert Rex on Friday, September 25, 2015


As I flew back to Boston from the Novogradac HTC Conference in San Antonio last week, I thought about the professional variety of attendees. It was reflective of the diverse group of skill sets needed to complete an HTC transaction: lawyers, accountants, syndicators, state and federal investors, banks, development consultants and developers. But other key team members in HTC transactions were less represented at the conference: architects, engineers, contractors and other consultants that design, permit and build the project.

A successful project takes a lot of skilled people working together to make it happen. And there is that one-person – syndicator, developer, lawyer – that has to push the project to closing. Each team member is an expert in their field; whether they are issuing a tax opinion or deciding that the building meets local codes, they need to understand the specifics of that aspect of the project.

In some cases, a broad understanding of all aspects of the project is required.

The Important Role of Historic Consultants

You might not think that a historic consultant is one of those people. You may think that all they have to focus on is the National Park Service (NPS) or the State Historic Preservation Office (SHPO) and meeting the Secretary of the Interiors Standards for Rehabilitation. That may in fact be the case in some situations. But a good historic consultant can often save the project money, especially from a timing perspective. 

Yes, the historic consultant is focused on the application process – getting Part 1, Part 2 and finally Part 3 approval – but the timeline for those approvals can have an enormous impact on project timing.

A successful Part 1 gives a developer confidence that the project can actually receive historic tax credits and may be an important part of the due diligence on seeing if the project is a “go” or “no go.” The Part 2 is the meat and potatoes of the application; here the design is approved and a developer can get a sense of whether they can actually get the yield they are looking for, like square footage or the number of units.

Good historic consultants are the experts of these necessary processes, often anticipating issues before they arise and drawing from their experience to offer solutions for these potential stumbling blocks. 

A good historic consultant is also keenly aware of the current forces at play in HTC policy and economics that will have a direct impact on their client’s project and financial structure. 

The Effect of Historic Boardwalk on HTCs

One of the prevalent topics of the conference was about the impact of the Historic Boardwalk case and the subsequent revenue procedure issued by the IRS. Prior to Boardwalk, a federal investor had greater protections against risk and the transaction could focus less on the real estate underwriting and more on the sponsor. Since this case, and subsequent revenue procedure, there is a much greater emphasis on underwriting the project and the entire transaction.

Repercussions of the Boardwalk case have led to a greater level of due diligence and a greater emphasis on overall project compliance during construction relative to NPS approvals and leading up to the Part 3 Final Certification. This level of due diligence and construction oversight is even more important to new investors entering the market (especially those who have been involved with Low-Income Housing Tax Credit (LIHTC) investments in the past). 

The Current Market for HTCs

Another takeaway from the conference relates to the relative strength of the HTC market. Despite the continued concerns over 50(D) and having a revenue procedure compliant transaction, there continues to be a growing interest in utilizing the federal HTC as a source of equity. Some of this is the need to fill the gap as banks continue to focus on the loan-to-value ratio. Some of it is likely due to the increase in opportunities with state HTC programs. Once a developer commits to one, why not get both?

The Wednesday sessions prior to the conference, focusing on the fundamentals of HTCs and state programs, were well attended, reinforcing the importance of strong state tax credits in the health of the HTC market. Fortunately, we have seen legislators from many states - such as Texas, Georgia, and most recently, North Carolina - agree that HTCs are an important economic growth tool.

At MHA, it is our goal to help our clients to benefit from these state (and federal) programs, knowing that they can be an integral part of their capital stack. And we are happy to be that team member for HTC projects across the country.

Contact us today to recruit us for your team.

Topics: HTC