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TaxCreditAdvisorP U B L I S H E D I N A S S O C I A T I O N W I T H T H E N A T I O N A L H O U S I N G & R E H A B I L I T A T I O N A S S O C I A T I O
August 2014 | Volume XXVI No
LAs New Oasisfor HomelessFemale Vets
PAGE
LIHTC Fund YieldsTrend Downward
PAGE 1
Tom CappsDiverse Deal Menu
PAGE 3
Resident Services
Escobedo at Verde Vista
Mesa, Arizona
Developed by Gorman & Company, Inc.
Photo by Mike Small Photography
Are They Working at Your Property?PAGE 24
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Low-Income Housing Tax Credit
32 Tax Credit Advisor | August 2014 www.housingonline.com
The way that Tom Capp and Gorman & Company,
Inc. approach the development of multifamily
rental housing, historic preservation, and mixed-
use real estate projects is to always be on the lookout
for new opportunities, funding sources, and lessons.
We really consider ourselves community developers
as much as we do multifamily developers, says Capp,
the companys chief operating officer. We dont go out
and pick a site and say, Hey, lets go develop a projectthere. The vast majority of our developments have
been identified as community priorities by the city, a
significant nonprofit, or a housing authority.
Company Background, Geographic Focus
Based outside Madison, Wisc., Gorman & Company
employs 235 people nationwide, owns and manages
almost 4,000 housing units, and manages about 1,100
units for other owners. The firm was established 30 years
ago by CEO Gary Gorman, a former lawyer who repre-
sented developers and syndicators. Capp, born and
raised in Chicago, joined the company 20 years ago
from a planning and government background, starting
as director of real estate development and then moving
up to executive vice president and later to COO.
While primarily a development outfit, the vertically-
integrated firm also has in-house construction, architec-
tural design, property management, and asset manage-ment divisions.
As our development leadership takes a project
through from beginning to end, we have all of those
functions at the table, says Capp. Thats our business
model. We try to capture the strengths of the integration
of all of those elements and the histories and lessons
learned in each of those areas.
The company currently focuses its development in
The Diversification StrategyTom Capp and Gorman & Company Develop a Variety of Projects,
Tap Different Funding Sources
Capp, continued on page 34
DEVELOPER PROFILE
Villard Square, Milwaukee, Wisconsin
Developer: Gorman & Company, Inc
Photo courtesy of Gorman & Company, Inc
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Wisconsin, Illinois, Florida,
Arizona, and new this year
Colorado. In addition to
the Wisconsin headquar-
ters, the company has a
satellite office in each state
(Chicago, Phoenix, Miami,
Denver) run by a market
president who finds and
develops projects in the
state. They receive full sup-
port from what Capp calls
the mother ship in
Wisconsin. The market
presidents, experienced
and well-regarded in their
states, generally come from
the nonprofit housing or
housing authority worlds.
Our market president is often the most respected
developer in their state, says Capp. They take a deep
dive in their state, and their integrity is unquestionable.
Gorman & Companys projects are primarily infill
developments, mostly in urban areas, and frequently in
challenged neighborhoods. The lions share of what
we do is multifamily housing, says Capp. And within
that space, a large percentage is either workforce housing
or low-income housing tax credit developments. The
company has completed about 80 LIHTC projects to date.
In addition, the company develops market-rate
housing, commercial, and mixed-used projects. In many
cases, the firm utilizes federal and sometimes also
state historic tax credits, alone or in combination with
housing tax credits.
A number of its affordable apartments target local
artists and contain live/work units with studio space as
well as galleries.
Variety of Projects
A major community development and revitalization
project is The Brewery in Milwaukee, Wisc., a redevelop-
ment site near downtown that once belonged to the
Pabst Brewing Company. Gorman & Company is
methodically developing projects from the 26 historic
buildings and sites that were part of the brewery com-
plex. These projects include a mix of historic rehabilita-
tion and adaptive re-use of some of the existing build-
ings, along with demolition of others followed by new
construction. We committed to the city and other play-
ers, before the recession, to play a significant role in
redeveloping that area, says Capp.
The two projects completed so far are:
Blue Ribbon Lofts, a 95-unit mixed-income apart
ment development financed largely with federal
low-income housing and historic tax credits.
The Brewhouse Inn & Suites, a 90-room boutique
hotel and restaurant funded partly by historic tax
credits and by equity raised from Chinese investor
under the federal EB-5 program.
Currently under construction:
A 60,000-square-foot office building funded byequity raised from Chinese investors under the
EB-5 program;
Frederick Lofts, a modern-design, 100-unit
market-rate apartment project funded with direct
equity investments from a Chinese development
firm that Gorman & Company met while raising
EB-5 funds in China. Capp says the market-rate
Low-Income Housing Tax Credit
34 Tax Credit Advisor | August 2014 www.housingonline.com
Capp, continued from page 32
Capp, continued on page 35
Brewhouse Inn & Suites, Milwaukee, Wisconsin
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Low-Income Housing Tax Credit
www.housingonline.com August 2014 | Tax Credit Advisor 35
development will provide a new kind of hipster
housing in this part of downtown.
Elsewhere, Gorman & Company is developing:
Lions Ridge Village Apartments, in Vail, the firms
first project in Colorado. This involves the con-
struction of four new apartment buildings with a
total of 114 units located on part of a 10-acre site
occupied by an existing apartment complex pur-
chased by the town of Vail. The town is providing
the land through a 50-year ground lease. Seventy
percent of the new apartments will be
workforce units, deed-restricted as
housing for employees of local busi-
nesses, including the local ski resort.
Coffelt-Lamoreaux Park, Phoenix,
Ariz. In partnership with the Housing
Authority of Maricopa County, the
company is redeveloping and convert-
ing 296 units of public housing to
assisted rental housing under the fed-
eral Rental Assistance Demonstration
program, using federal housing and
historic tax credits and tax-exempt
financing. The firm has a master
development agreement (MDA) with the housing
authority to redevelop all of its public housing.
Paradise Pointe Senior Residences, a new 46-
unit LIHTC development for seniors in Monroe
County in the Florida Keys, Gorman & Companys
third tax credit project in the Keys.
Examples of mixed-use projects completed by
Gorman & Company include:
Villard Square, in Milwaukee, containing 47apartments on three floors above a new 20,000-
square-foot city library. The apartments were
designed as grandfamily housing for grandpar-
ents raising their grandchildren.
Grand River Station, in La Crosse, Wisc. This
new construction project combines a city transit
center with 72 affordable and market-rate apart-
ments. The development also includes 20 for-sale
condos on upper floors as well as retail stores and
gallery space at the ground level.
In the last few years weve had pretty good luck in
mixing uses in different ways, says Capp.
The COO says the company is stronger and differen
than it was five or six years ago as a result of changes
made in response to the recession. According to Capp,
the firm used to tie its fortunes largely to low-income
housing tax credit development. During the downturn, it
decided to diversify both in the types of projects it
develops as well as the funding sources used.
One new source has been foreign investor capital
procured through the EB-5 program. This
program fast-tracks the issuance of visas
and ultimately green cards to foreigners
(and their families) who invest $500,000 or
more in specific projects or businesses in
the U.S. Solicitation offerings to foreign
investors must be made through federally
designated regional centers. Gorman &
Company has successfully raised EB-5
capital for two projects so far and antici-
pates more going forward. In fact, the
company has established its own EB-5
regional center to expedite the process of
raising foreign investor capital for real
estate projects in Chicago, Milwaukee, and other parts
of Illinois and Wisconsin.
Love for Development
Capp, an affordable housing veteran, continues to
enjoy being a developer.
I came into the development side from the plan-
ning and government worlds, which I loved. But there
you do policy work and plans. You often dont see real
tangible results.
What I really love about our role as communitydeveloper is getting to creatively devise how to build
something that ends up being tangible. Once its built
you are able to kick it and take your kids by it.
Capp also relishes improving the lives of the resi-
dents of the companys developments. When you meet
somebody who lives in quality housing that they never
had an opportunity to have before, thats very satisfy-
ing, he says. I love the very real effects you have on
peoples lives.
Capp, continued from page 34
TCA
The COO says the
company is stronger
and different than it
was five or six years
ago as a result of
changes made in
response to the
recession.