It takes a strong vision to conceive of potential alternate uses for old office buildings – or to transform existing buildings into modern, innovative office space. Our “modern-day development Rembrandts” – Michael Wyatt, Managing Director, CORE Real Estate, LLC; Mark Hansen, Senior Vice President, Value Added Investments, Prologis; and William Katter, Executive Vice President, United Properties – presented case studies at O.CON ’15 to showcase the challenges and rewards of creative adaptation and reuse.
The projects were “successful both quantitatively and qualitatively” – and demonstrated why big risks can yield big rewards.
The experts’ lessons learned:
- Have a vision. William Katter shared how his team decided to transform the 1911 Ford Center – a Model T assembly plant – in Minneapolis into modern office space. The future MLB ballpark nearby served as the catalyst for redevelopment of the area; his team bought the property in 2007 ahead of the 2009 Twins ballpark opening. They decided the 270,500 sf, 10 story brick and glass building was best suited for office development and that the focus was “all about the windows.” They restored the windows, 90 percent rebuilt (as a condition of receiving historic preservation tax incentives) – to create dramatic window lines and infuse the floors with daylight.
- Teamwork, cooperation and compromise is essential – both within the development team; with contractors, designers and others; and tenants.
- Don’t be deterred by obstacles. Historic tax credit projects have special requirements (and paperwork!) not encountered in more traditional office development projects. Be patient and diligent and the payoffs can be well worth it, our speakers said. The Ford Center project took advantage of the 2010 Minnesota State Legislature passage of State Historic Rehabilitation Tax Credit law, which matches the federal National Park Service Federal Historic Preservation Tax Incentives program, resulting in a 40 percent reimbursement of qualified expenses with the state and federal tax credits combined.
- Creative space is constantly evolving. For creative companies, flexibility in office space is key. Mark Hansen discussed how Prologis converted an operating paper mill, built in the 1950s in the heart of Silicon Valley, into a high-end showroom and regional distribution space for One Workplace, the nation’s largest Steelcase furniture distributor. They knew that companies were looking for flexible office space with room for collaboration, including mountable partitions that can be moved for maximum flexibility.
- Super cool does not have to be super expensive. Katter described multiple ways that his team used or adapted existing features of the 1923 Loose-Wiles Biscuit Factory – completed in 2012 as a historic tax renovation project – for modern use. Among the adaptations: renovating the wood floors throughout the building; converting the old ovens where they cooked the biscuits into meeting space; and keeping the old factory ceilings – spruced up – for a modern industrial look.