Category Archive: News Wire Services
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Tax help driving big rehab projects
Historical remakes use federal credits to raise moneyTuesday, September 18, 2007
By Marylynne Pitz,
Pittsburgh Post-Gazette
Thursday’s grand opening of Bedford Springs Resort marks a milestone in its $120 million rehabilitation, capping more than two decades of monumental efforts to revive the Bedford County mountain retreat.It also represents one of the largest projects in Pennsylvania to take advantage of a federal tax credit program that has spurred nearly $300 million of investment in Pittsburgh the past decade.
Examples include Downtown’s Renaissance Pittsburgh Hotel, Heinz Lofts on the North Side and the Armstrong Cork Factory, a $60 million project with three luxury apartment buildings that opened in May in the Strip District.
More recently, an 18-month renovation that cost upwards of $15 million transformed the former Keystone Grocery warehouse and Try Street Terminal into Shannon Hall, a nine-story Downtown building with 140 apartments that opened in July for Art Institute of Pittsburgh students.
And just last week, Trek Development announced plans to convert Downtown’s Century Building on Seventh Street into affordable apartments, aided by $2.3 million in federal historic rehabilitation tax credits.
Created three decades ago by Congress to spur preservation, the credits help developers clear financial hurdles that accompany the renovation of older structures, which cost more to rehabilitate than building anew. The credits allow lenders, banks and corporations to invest in the projects, while using the credits to reduce their tax liabilities dollar for dollar.
The developer first must qualify for the tax credits, which they then sell to the investors. The process requires developers to submit a detailed application outlining a project’s scope, and the building must be on the National Register of Historic Places to qualify for the full 20 percent credit.
The buyer of the credit “virtually owns the building. They are not just buying the tax credit. They are entering a partnership and … sharing in the profits,” said Jill Paskoff, a certified public accountant with the Reznick Group in Baltimore.
The community benefits from the rehabilitation and reuse of little-used and abandoned properties that are added back to the tax rolls. Since 1978, Allegheny County alone has seen 431 such projects use the credits to spur investments totaling $487.7 million, said Bonnie Wilkinson Mark, a historical architect with Pennsylvania’s Bureau of Historic Preservation.
Francisco Escalante, director of operations for the local development company No Wall Productions, said his firm has used historic tax credits on three Downtown-area projects, including the recently renovated 930 Penn Ave., a six-story building that has 20 apartments, a Subway sandwich shop on the first floor and the restaurant Seviche.
“Without having access to the historic credit, our renovations … would not have been possible,” Mr. Escalante said, adding that No Wall Productions’ partner in the deal was Rugby Realty, which owns the Frick Building and Gulf Tower.
No Wall Productions also obtained credits for its renovation of 905 Liberty Ave., where it created a space called Liberty Lofts in partnership with the city’s Urban Redevelopment Authority. And it used the credits to finance renovation of the Bruno Building, which has seven residential and commercial lofts at 945 Penn Ave.
All three buildings are contributing structures to the Penn-Liberty National Register Historic District.
The Bedford Springs Resort project had six investors who put up $10 million of their own money and qualified the project for a $23 million rehabilitation tax credit, which was sold to oil giant Chevron.
The proceeds helped fund the renovations, said Timm Judson, chief investment officer for The Ferchill Group of Cleveland, a member of the investor group, Bedford Resort Partners Ltd. Historic tax credits aren’t the only vehicle developers turn to when renovating old properties. Often part and parcel with the use of credits are agreements by the developer with preservation groups to maintain the building’s historic character.
On the surface, such restrictions may sound like a deterrent to financing. But in effect, by preventing modifications that could ruin the building’s historic character, they ensure that the building will retain its integrity and even increase in value.
In practice, these easements allow the preservationists, often a group like the Pittsburgh History & Landmarks Foundation, to control changes that are made to the facade or the site of the building, said Martha W. Jordan, a Duquesne University law professor who teaches courses on federal income tax.
Professor Jordan — who also serves on the board of Landmarks, the city’s largest preservation group — said the foundation has an easement on the facade of Bedford Springs Resort as well as its golf course.
“They can’t change the golf course without permission of Landmarks. They can’t make changes to the facade of Bedford Springs,” she said.
Jack Miller, director of planned giving at Landmarks, said the nonprofit has more than 30 restrictive easements or covenants on properties primarily in Western Pennsylvania. The best known of these include the Heinz Lofts on the North Side, the Armstrong Cork Factory and the Bedford Springs project.
John Panno, tax counsel at Sherwin-Williams in Cleveland, likes the use of historic tax credits and facade easements not only because they benefit his company, but because they are helping beautify his hometown. He grew up in McKees Rocks.
“I love seeing what’s happening,” he said. “This is about preserving history and reviving communities.”
First published on September 18, 2007 at 12:00 am
Marylynne Pitz can be reached at mpitz@post-gazette.com or 412-263-1648. -
North Side gets behind Commons cause
By Bonnie Pfister
TRIBUNE-REVIEW
Friday, September 14, 2007The North Side’s Allegheny Commons — designated as public grazing lands a year before George Washington became the nation’s first president — today celebrates a small but significant first step in a proposed $16 million revitalization guided by a master plan.
A four-acre parcel at the southwest corner of East Ohio Street and Cedar Avenue has undergone $400,000 of upgrades, part of a pilot project demonstrating improvements that could come for the 80-acre West Park.
“This is a way for us to take a section of the park and do a whole lot of improvements and see how it looks,” said Christina Schmidlapp, part-time development director of the project since 2004, working from the offices of the Northside Leadership Conference.
“It will be a living advertisement of what we want to do, and for us to see if it makes sense for us to make a park like they did in the 19th century.”
Located a quarter-mile from the Allegheny River across from Downtown, the green space was designated as public grazing lands, or commons, surrounding the borough of Allegheny in 1788, according to the Allegheny Commons Steering Committee. It was beautified as a park for Allegheny City in 1868, annexed to Pittsburgh 40 years later and incorporated into the city’s park system. Allegheny Commons is eligible for the National Register of Historic Places and is a city historic district.
Community groups in 1999 convened a public meeting to discuss upgrading the park, and by 2002 other stakeholders — including Allegheny General Hospital, the Aviary and the Children’s Museum — helped develop a master plan. Local businesses, including insurance company Babb Inc., the Steelers and Citizens Bank, helped to fund the salary of Schmidlapp, who will move into a money-raising mode. Alida Baker will become project director.
Money for the improvement has come from the Richard King Mellon Foundation and The Buhl Foundation, and the city Public Works Department, which provided $200,000 and labor to rebuild walking paths and upgrade lighting. The planting of 70 trees and other landscape care in the park was paid for by the Laurel Foundation, the Allegheny Foundation and the Garden Club of Allegheny County.
Walking through the park on a brilliant September afternoon, Tonia Davis said Thursday she has noticed the improvement in the five years since she moved to East Allegheny Commons. The park is better maintained and has become a gathering spot for children’s parties.
“It’s a beautiful place,” said Davis, a home health worker and part-time Wendy’s restaurant staffer. “When I moved here, it was nothing but drugs, drugs, drugs, drugs. I didn’t want to come out of my house. I’m proud to live here now.”
A ceremony is scheduled in the park at 4 p.m. today. The master plan can be found at www.pittsburghnorthside.com.
Bonnie Pfister can be reached at bpfister@tribweb.com or 412-320-7886.
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New apartments will be geared to middle income
By Jeremy Boren
TRIBUNE-REVIEW
Thursday, September 13, 2007The first newly built Downtown apartments with rents geared toward middle-income people will be in the heart of Pittsburgh’s Cultural District, where city planners hope to attract artists and others living on a budget.
Trek Development will put 60 apartments in the Century Building on Seventh Street with prices for studio, and one- and two-bedroom apartments from $450 to $1,250 a month, said Trek CEO William Gatti, who joined Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato to announce plans Wednesday for the 100-year-old building.
“They’ll be the most affordable new units that are coming available Downtown,” said Patricia Burk, vice president of housing and economic development for the Pittsburgh Downtown Partnership.
New housing below market price is uncommon Downtown, which counts most of its lower rents in aging high-rise mammoths such as the Mid-Town Towers and The Roosevelt.
Ravenstahl said residential development Downtown has focused on building pricey lofts and condos, but people with middle incomes should be able to live in the city’s center, as well.
“Sure, we want individuals who can purchase the million-dollar condos, but we need to have that mix,” Ravenstahl said. “We need to have that diversity of young and old, rich and middle-income people.”
High-end housing Downtown has demonstrated some success. For example, the owners of Piatt Place in the former Lazarus/Macy’s Building, have sold 35 percent of the building’s 65 condos at prices ranging from $350,000 to $1 million.
Onorato said as more people move in, more businesses and amenities will come to Downtown.
“This is the place in the next decade or two where activity is going to be going,” Onorato said. “This truly is the center of southwest Pennsylvania.”
Gatti said the $16 million in planned renovations would not have been possible without $515,155 in affordable housing tax credits that the Pennsylvania Housing Finance Agency approved Tuesday. The rents aren’t high enough to justify the debt Trek would accrue.
Gatti said the building will target “the style-conscious urban dweller on a budget.”
Trek will receive $3.2 million from the Pittsburgh Cultural Trust, $2.3 million from the Urban Redevelopment Authority, $2.3 million in historic tax credits, $2.3 million from the private Strategic Investment Fund and $750,000 from Allegheny County Economic Development.
That makes about $11.4 million in public and private assistance.
“Affordable housing options for artists and workers in the Cultural District and Downtown in general play an important role in the ongoing growth of the district as a residential neighborhood,” said Pittsburgh Cultural Trust President Kevin McMahon.
The building will have nine studios, 12 two-bedroom apartments and 39 one-bedroom apartments. Construction is expected to begin in spring.
Tenants will be able to move in by early 2009, Gatti said.
Jeremy Boren can be reached at jboren@tribweb.com or 412-765-2312.
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Tax credits lower costs of living Downtown
Thursday, September 13, 2007
By Mark Belko,
Pittsburgh Post-GazettePeople who want to live Downtown but can’t afford the expensive condominiums or steep rents that now dominate the market finally may have an option.
It’s a 100-year-old building on Seventh Street in the heart of Pittsburgh’s Cultural District.
A plan to convert the 12-story Century Building into affordable apartments cleared a key hurdle this week when the Pennsylvania Housing Finance Agency awarded $515,155 in federal tax credits for the project.
The approval, announced at a news conference yesterday, will enable Trek Development Group to press ahead with the construction of 60 upper-floor apartments, including single-room studios and one- and two-bedroom lofts.
Rents will range from $550 to $1,150 a month, depending on income level, in a Downtown market where studio rents currently are $868 to $909 a month and two bedrooms go for $1,035 to $2,002 a month, based on whether there’s one or two bathrooms.
Mayor Luke Ravenstahl said the $16 million Century Building project has been a priority for him since he got into office a year ago because of its potential to attract a broader mix of people into the Downtown residential scene.
“Downtown Pittsburgh is on its way back. It’s revitalizing, and it’s because of projects like this that we’re going to be able to look at a significantly different Downtown, in my opinion, in the years to come,” he said.
Until now the residential surge Downtown has been fueled in large part by luxury condominiums with price tags starting at roughly $230,000. Many units are selling for $300,000 or more, with a few topping $1 million.
Apartment rents at the Encore on 7th high-rise a few doors down from the Century Building are $1,400 to $3,275 a month.
While housing has helped to boost the fortunes of the Downtown district, it has been out of the reach of many people because of the price.
At the same time, Pittsburgh Downtown Partnership research has found a “tremendous demand” for a middle range that includes young professional housing and work-force housing, said Patty Burk, vice president of housing and economic development.
“Delivering this building will be the first step in meeting that demand and helping Downtown be for everyone,” she said.
Part of the problem in providing more affordable housing in downtowns, here and elsewhere, is the high cost of construction, which leads developers to focus on the high end to turn a profit. Lower pricing typically requires some form of subsidy.
For example, Washington County-based Millcraft Industries, another developer seeking to bring more affordable housing Downtown, sought federal historic tax credits to help make the numbers work. It is converting part of the old G.C. Murphy store into 46 loft apartments, with rents to range from about $775 for a 620-square-foot studio to $1,875 for a 1,500-square-foot penthouse.
William J. Gatti Jr., president of Trek Development Group, said the $515,155 in affordable tax credits was “vital” to the conversion of the upper floors of the Century Building into housing. He said the project could not have gone forward without them.
“The price point that we’re attempting to make units available for would not be enough to amortize the debt necessary to develop the building and to carry the cost. So we absolutely need the tax credits to make it work,” he said.
Trek plans to target young professionals, artists and middle-income renters. It plans to offer 12 single-room studios, 12 two-bedroom units and 36 one-bedroom units.
“It is fitting that exactly 100 years after its original construction we are announcing the rebirth of the Century Building as Downtown Pittsburgh’s first truly affordable residential loft community,” Mr. Gatti said.
Trek intends to pursue an environmentally friendly LEED certification for the building, which also will include a green roof and geothermal heating and cooling. There also will be a roof deck with city and Allegheny River views, an equipped exercise room, a community club room and a business center.
Apartment amenities include garbage disposals, dishwashers, and washer and dryer hook-ups.
Besides the PHFA tax credits, project funding includes nearly $3.2 million from the Pittsburgh Cultural Trust, $2.3 million in loans from the city’s Urban Redevelopment Authority, $2.3 million in historic tax credits, $2.3 million in loans from the Strategic Investment Fund and $750,000 in loans from the county’s economic development department.
Trek already has been doing preliminary demolition work within the building. Construction should be in full bloom next year, with apartments ready for occupancy in early 2009.
The Century Building conversion is considered another key addition to the thriving Cultural District. It’s expected to complement the Cultural Trust’s half-billion-dollar RiverParc project, the first phase of which involves the construction of some 700 units of housing on the Allegheny River at Eighth Street, at a cost of $90 million.
Allegheny County Chief Executive Dan Onorato said Downtown will be “the place for the next decade or two where activity” will be growing. He said the county is committed to making sure the Golden Triangle, as the hub of the region, continues to move forward.
“We’re on a roll. You can easily fall off that roll if you don’t pay attention to what we have here and the assets that we have. So Downtown Pittsburgh’s going to remain a focus for the next several years for all of us involved here,” he said.
First published on September 13, 2007 at 12:00 am
Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262. -
A historic moment for Highland Park
By Bill Zlatos
TRIBUNE-REVIEW
Wednesday, September 12, 2007Highland Park, the East End neighborhood known for its stained glass and woodwork crafted by immigrant artisans, has been placed on the National Register of Historic Places.
“It’s a way to market the neighborhood, to attract people interested in historic buildings and to encourage people to maintain those buildings,” said Mike Eversmeyer, a Highland Park resident and architect.Eversmeyer on Tuesday confirmed the neighborhood’s listing as the Highland Park Residential Historic District. The Highland Park Community Development Corp. hired him to submit the nomination to the State Historic Preservation Board and the National Register of Historic Places.
The neighborhood joins 18 other districts in the city and sites in Aspinwall, Harrison, Homestead, Munhall, Plum, Ross, Thornburg and West Mifflin on the National Register.
“The neighborhood has long been respected by Pittsburgh residents and has a feeling as a special place when you walk those streets lined with houses of turn-of-the-century style,” said Arthur Ziegler, president of the Pittsburgh History & Landmarks Foundation.
He said residents of Highland Park are not the only ones who should applaud its status.The designation helps businesses obtain federal money and prevents federal money from being used to tear down buildings without an extensive review.
Eversmeyer said the listing should spur investment, especially in the Bryant Street commercial district and in its southwest corner, an area plagued by apartment buildings owned by absentee landlords.
He said homeowners could benefit, too, if the state Legislature provides tax incentives for people in residential historic districts.
“If you’re trying to sell investors on coming into a neighborhood, then having a tax credit as a carrot makes a lot of sense,” he said.
The neighborhood is a blend of Victorian, Tudor and Arts and Crafts homes with some modern-style houses. It is home to the Pittsburgh Zoo & PPG Aquarium, one of the city’s larger parks and two reservoirs.
Kelly Meade, a Highland Park resident for 30 years, has worked as a real estate agent for Howard Hanna, specializing in that neighborhood for 25 years. She said the historic designation should give the neighborhood’s housing market a boost.
“For those who have a special interest in a historic home, it certainly will give more credence to the neighborhood,” she said.
Bill Zlatos can be reached at bzlatos@tribweb.com or 412-320-7828.
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Highland Park granted federal historic status
Wednesday, September 12, 2007
By Diana Nelson Jones, Pittsburgh Post-Gazette
Pittsburgh Post-GazetteThe National Register of Historic Places has granted Highland Park federal historic status, a designation with few protections but much prestige among preservationists.
Mike Eversmeyer, an architect and former head of the city’s Historic Review Commission, completed the nomination from research begun almost a decade ago by the neighborhood’s community development corporation, or CDC.
The work included surveying and documenting the histories of more than 1,300 structures.
“We based our nomination on the significance of the architecture, a coherent concentration of buildings from the late 19th to early 20th century,” Mr. Eversmeyer said. “It was a model street car suburb.”
The parameters of the historic district run roughly from Stanton Avenue on the south to the park on the east and north, with Chislett Street serving as the western boundary. It cuts slightly into East Liberty at one point because the buildings between Stanton and Hays and Negley Avenue and Chislett were of the same signature as Highland Park’s, said Mr. Eversmeyer.
“I think it’s something for Pittsburgh to be very proud of,” said Arthur Ziegler, president of the Pittsburgh History & Landmarks Foundation. “It gives national status to the neighborhood, and it will protect it from federally funded programs that could harm historic buildings.” Any such programs would be reviewed by state preservation officials, he said.
He said Highland Park’s housing collage ranges from late Victorian to early Modern, covering Edwardian, Tudor Revival and Arts and Crafts.
“The neighborhood has a feeling of architectural continuity,” he said.
Amy Enrico, owner of Tazza d’Oro coffeehouse on Highland Avenue, said, “I’m grateful for all the time they have put in. This is an incentive for all of us to preserve the architecture and stories of all the neighbors who came before us.”
The national designation does not prohibit individual owners from altering properties or require them to restore them, but it does make the district eligible for preservation funding and tax credits. City-designated historic districts are more restricted, with oversight from the planning department and Historic Review Commission on any proposed change to properties.
Several areas of Pittsburgh have federal and city historic status. One does not preclude the other, and the two do not always follow the same boundaries, said Mr. Ziegler.
“No one has spoken about interest in going for city historic designation” for Highland Park, Mr. Eversmeyer said.
David Hance, president of the Highland Park CDC. credited then-city councilman, now state Sen. Jim Ferlo for funding the research. The designation, he said, “tells us that what we see everyday where we live is notable, and it’s one more tool we have” to encourage quality development.
First published on September 12, 2007 at 2:52 am
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Preservation group moves beyond county lines
By Ron DaParma
TRIBUNE-REVIEW
Sunday, September 9, 2007The Pittsburgh History & Landmarks Foundation is best known for its preservation efforts of historic properties throughout Allegheny County.
However, the South Side-based agency has been extending its reach beyond its home county in recent years, including with its latest project in Beaver County — an effort to bring “residential reinvestment” to areas near business districts in nine communities.
The foundation is the lead consultant on the project focusing on Aliquippa, Ambridge, Beaver, Bridgewater, Freedom, Midland, Monaca, New Brighton and Rochester.
“The idea is to work with the local officials and independent local organizations to identify new projects for each of the communities that in general terms fall into the guidelines of the state’s Elm Street program,” said Eugene Matta, the foundation’s director of real estate and special development programs.
Elm Street is a program established by Gov. Ed Rendell’s administration that this year is making available $7 million statewide to improve residential streets near Main Street business districts.
It provides seed money to be matched by funds raised from other sources to make the improvements a reality.
Though not an official Elm Street program, the foundation describes it as an “Elm Street-like” program.
While it will not necessarily be securing funds under that program, it will be seeking support from state and private sources.
The foundation is working under a consultant contract it signed several weeks ago with the Community Development Program of Beaver County, paid for with $50,000 from the state Department of Community and Economic Development.
Also on board is Town Center Associates, an organization serving as “sub-consultant.”
“TCA is headquartered in Beaver County and knows that county well,” said Arthur P. Ziegler Jr., PH&LF president.
“It’s president, Mark Peluso, already has done quite a bit of work in the community,” said Matta.
Examples of the projects funded under the Elm Street program include improvements to building exteriors, streets, new street lighting and trees, sidewalks or other “pedestrian-oriented features,” Matta said.
Other activities include improvements of mixed-use buildings in residential areas, acquisition of properties, demolition and reclamation projects, code violation repairs, emergency housing repairs, addition of home security items, parks and playgrounds and water and sewer connections.
The consultants have held one meeting with community leaders to discuss how to proceed with the program, and a second meeting is scheduled Tuesday.
“We suggested to community representatives that sometime in October we would like to have at least four projects they feel are worth considering,” Matta said. “Then somewhere between October and November, we should be able to start work on applications for funding.”
Over the past year, the foundation has secured five grants totaling nearly $800,00 under the DCED funding process.
Its efforts include helping to attract $2 million in investments in Wikinsburg to rehabilitate four properties in the historic Hamnett Place neighborhood.
It is working as manager of the Main Street program in Vandergrift, Armstrong County, and it received a $7,500 grant from National City Corp. to help form a Main Street project for Freeport, Leechburg, Apollo.
Preservation of historic farms also has been a focus. The organization is involved in a survey of farm properties in Green and Washington counties, Matta said.
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Private-public partnership resurrects old Bedford getaway
By Jack Markowitz
FOR THE TRIBUNE-REVIEW
Sunday, September 9, 2007They’re using the word “miracle” around Bedford these days.
It’s a nod to the revival — after 22 years of near-death experience — of the Bedford Springs Resort, the venerable vacation spot with gleaming front porches that seem to go forever and a history that stretches back 203 years.Presidents slept there. But a glorious past can carry a hotel only so far if everything else is falling apart. The “Springs’ ” new owners, a half-dozen sophisticated investors from out of state, have bet $120 million that this piece of the past has a future.
They see a very modern aggravation — airport delays and hassles — nudging upscale Easterners to do their vacations and conferences, weddings and weekends, closer to home. Within two or three hours’ easy driving from Pittsburgh, Baltimore, Washington and Philadelphia, in fact.
In that market area of millions, Bedford Springs means to compete with the best. Namely, the Greenbrier in West Virginia, the Homestead in Virginia and other high-prestige — and high priced — watering places for the well-heeled and the politically and corporately influential.
So look for weekday room rates of $249 a night and up ($350 on weekends), golf rounds at $105 for hotel guests, $115 for drive-ins ($70 after 3 p.m.), and sumptuous but pricey breakfast, lunch and dinner menus. Not to mention concierges, valet parking, masseuses and white-gloved bellmen.
None of which would have been possible without the help of taxpayers.
Some $40 million in state and federal help has lifted the grand dame of Keystone State travel destinations to its legs again. “The hotel is probably better than it has ever been,” said Arthur P. Ziegler Jr., president of Pittsburgh History and Landmarks Foundation, which helped in the rescue.
“She sat there empty and forlorn for 22 years,” says Bedford historian-architect Bill Defibaugh. “I expected every day to get a call, ‘They’re tearing her down.’ ”
It all goes to show what money can do. Plus vision, patience, taste and, well, tax dollars.
Here’s one item. To give a new generation of guests an unspoiled view — and no noise, fumes or trucks, across elegant lawns and gardens — a half-mile of U.S. Route 220 was relocated behind the hotel. The traffic is now in a deep, $11 million highway cut that never would have happened without friends in Harrisburg and Washington.
Still, someone had to bring money. His own.
Meet Mark Langdale, 53, of Dallas. He’s the U.S. ambassador to Costa Rica, a friend and appointee of President Bush, and a real estate investor. From afar, he spotted a then-dying, dust-gathering hotel a decade ago. And never let up gathering partners, political allies and financial tools.
Pittsburgh History and Landmarks (which saved Station Square in its home city decades ago) threw a big life ring. It acquired the hotel’s outside. Right — just the outside.
That’s the historic facade of tall columns, old glass and white porches — the building’s skin. History and Landmarks legally owns all that by way of an “easement,” a legal contract by which the historic look of a National Historic Landmark should never be lost.
By giving up the easement, Langdale and his group, Bedford Resort Partners, acquired a $23 million federal income-tax credit aimed at historic preservation. Then they sold that as a market investment to Chevron, the California oil giant, to put into the reconstruction. As many as 400 skilled tradespeople have reworked the property for almost two years.
Result: The hotel, some of it dating from 1804, is practically new inside — in a stronger outside. The four-story architectural wedding cake lies four miles south of the Pennsylvania Turnpike’s Bedford interchange, just outside the 3,500-population county seat.
“Basically, we took the hotel back to the structure,” says Keith Evans, managing partner of Bedford Resort Partners, who oversaw the big fix. An associate jokes: “Keith said, ‘Take it upside down and everything that falls is gone. So we have new walls, new floors, ceilings, heating, plumbing and air-conditioning.”
Evans said it’s fair to say the place was “gutted.” To make larger guest rooms, now 216 of them (vs. 721 at the giant Greenbrier and 486 at the Homestead), walls were knocked down and about 60 old rooms sacrificed. Deteriorated timber was replaced by steel beams. Great white outdoor columns were sent to Altoona and Scranton for $75,000 rebuilds. But century-old, wavy window glass was kept; 19th century brides etched initials in it with their wedding diamonds.
“This ceiling was just hanging down,” said Cheryl Funk, marketing director, of the top-floor ballroom (capacity 300) three floors up from a soaring lobby of angled stairs and footbridges. Five restaurants, a huge kitchen (and several satellite kitchens), an antique-rich library, porches with painted rocking chairs — What would a grand old hotel be without them? — and long vistas of furniture and decor keep visitors walking and gawking.
More than a half-dozen presidents have visited the place, including Pennsylvania’s own James Buchanan, who used it as a summer White House before the Civil War. Others on the register included Dwight Eisenhower and Ronald Reagan (while California governor).
The first post-revival wedding was in late August with 225 guests. Extra help was sent in by Texas-based Benchmark Hospitality International, contract operator of this resort and more than 30 others. The first new guests in a generation arrived July 12 without any “grand opening.” It seemed more important to get 275 resort employees up to speed for a “world-class destination luxury resort.” That’s the goal, not an easy one.
The Greenbrier, in White Sulphur Springs, W.Va., and the Homestead, in Hot Springs, Va., plus Nemacolin Woodlands in Fayette County and the Hotel Hershey near Harrisburg are viewed as the elite competition for individuals, corporate meetings, special events and, hopefully, congressional and other government retreats.
“The luxury segment is one part of our industry that’s continued to grow,” said Todd Gillespie, Bedford Springs’ vice president of marketing and sales. He said four groups already are signed for 2008 — and one as far out as 2011.
No numbers are being released, but “we’re very optimistic about the early results,” Evans says. “Bookings have been very good.”
Word-of-mouth from the hard-to-please can be elusive. An early guest from Rochester, N.Y., told a reporter the new staff isn’t four-star yet. “It’s beautiful around here, but they’ve got to get the kinks out,” she said.
But Helen Ferry, Dorothy Ritchey and Marcia Davis, all from small Bedford area towns, thought the restoration exciting and the food “delicious.” They bused in on a senior citizens weekday tour with buffet lunch (fare: $26.50). “Before they started working on it,” Ferry says, “you’d come up here and think somebody dropped a bomb.”
A new “spa” wing has been built for body-pamperers, with guest rooms topping $300 a night. The outdoor-pool complex overlooks a first-rate view: the restored 18-hole golf course that occupies a valley between hills veined with hiking trails. Bringing the 6,785-yard golf course back to the 1924 Donald Ross design was an $8.5 million labor. Look for serpentine bunkers, tufted hillocks, wetlands, wildflowers and meandering Shober’s Run.
Restoration work in the hotel aims for the high-ceilinged look of the resort’s pre-World War I heyday around 1905. But underpinning the charm are amenities geared to at least a half-decade in the future, Gillespie said: elegantly tiled bathrooms, iPod docking stations and high-definition flat-screen TVs behind the doors of antique-looking chests.
And, of course, year-round occupancy. The old hotel closed in winters.
Historian Defibaugh, whose antique photos decorate the long corridors, said Bedford folks never quite lost hope after the hotel’s depressing 1986 shutdown. “Developers came in with high hopes but very little money,” he said.
Wonderful what a major investment will do, though. Along Pitt Street, downtown Bedford’s main stem, merchants see signs of contagious rebirth. “I know three businesses that say they would not have opened had it not been for the Springs,” says Kim Foreman, owner of the Green Harvest Co., a cafe and bakery.
“I’m planning a third fitting room, the weekends have become so busy,” says Elaine Housel, owner of Elaine’s Wearable Art, a clothing and jewelry retailer. “Women on vacation can only sit around for so long. They’re coming to town to shop.”
There are reports of higher home prices around Bedford, but Todd May, at Johnson Real Estate, cites a “certain amount of speculation on business properties in town,” retirement-home buying by Baltimoreans, who like the lower housing costs across the Pennsylvania border, and some new industries opening.
Sharyn Maust, managing editor of the Bedford Gazette, says of the hotel’s revival: “Obviously it’s great, but I like old buildings.” Some of her readers have written angry letters, disapproving of public funds going to entertain wealthy out-of-towners. “In effect they’re saying ‘I’ll never see any benefit from this,’ ” Maust says.
At this point, the resort is no bonanza for local and school tax collectors. It’s cocooned in its own state-delineated “Keystone Opportunity Zone.”
That’s a sweetener for investors. It was laid out when the idled hotel was desperately seeking a savior in 2001. Thanks to the Opportunity Zone, no real estate or personal property tax has to be paid for 10 years, through 2010. The hit wouldn’t be heavy in any case. Annual real estate tax only would be about $32,000. That’s on a laughably low assessed value of $394,000 and “fair market value” of $2.3 million. Considering all that’s been invested, a future shock seems inevitable.
The resort’s new owners number six partners: Langdale, Evans and John Ferchill, head of the Ferchill Group, of Cleveland, and three of his associates. Ferchill is a veteran developer of historic properties, like 99 percent-occupied Heinz Lofts on Pittsburgh’s North Side.
Here’s how $120 million was put together, according to Timm Judson, chief investment officer of Felcher. Owners’ equity of $10 million; historic tax credit of $23 million, the History and Landmarks easement; $28 million in state grants under the Pennsylvania Redevelopment Assistance Capital Program; another $11 million in PennDOT funds for highway relocation; a $40 million senior mortgage held by Marshall Investment Group, of Minneapolis; and a $9 million second mortgage by Hudson Realty Capital, of New York.
Using public funds to subsidize private enterprises is a perennial issue for debate. State and federal laws favor it for historic property. But well-placed friends help.
Two lawmakers have long backed efforts to keep Bedford Springs alive: U.S. Rep. Bill Shuster, R-Everett (and his father, former Rep. Bud Shuster, a kingpin among public works promoters in Congress), and former state Sen. Robert Jubelirer, R-Altoona, who lost a re-election bid after helping to engineer an the since-rescinded legislative pay increase in 2005.
The Ferchill Group’s Judson says there’s no way the resort’s revival could have happened without the state’s $40 million-odd input (in grants and PennDOT funds), a third of the total cost.
Says Evans: “Many people tried for a long time to get it done and they couldn’t. The state had a great treasure that had not been open for 20 years, and it now has a viable new employer bringing in tourist dollars that did not exist before.”
Pittsburgh Landmarks’ Ziegler agrees — when it comes to the architecturally irreplaceable: “It’s so hard to do these buildings on a market basis,” he said. “As for subsidizing, it just couldn’t be done without it. And keep in mind, these owners have their own money in. They have a mortgage. I think it’s little short of a miracle.”
The competition
The Greenbrier, White Sulphur Springs, W. Va.
250 miles south of Pittsburgh and southwest of Washington, D.C.
• Acreage: 6,500.
• Opened: 1778.
• Rooms: 721, including suites, guest houses.
• Rates: Per night : traditional room, $379 to $489. Higher level rooms, suites: $529 to $900.
• Golf courses: Three, per player round: $195, after Oct. 21, $130.
• Fact bites: 26 presidents have visited. A $50 million renovation completed last April. 112,000-square-foot underground bunker can be toured. Built “top secret” for Congress in case of Cold War blowup, it was never used.
• Details: 1-800-624-6070, www.greenbrier.com.
The Homestead, Hot Springs, Va.
250 miles south of Pittsburgh, 210 miles west of Washington, D.C.
• Acreage: 3,000.
• Opened: 1766.
• Rooms: 483, including suites
• Rates: Per night, $225 to $450; with meal packages, $310-535; golf packages, $620 to $1,120.
• Golf courses: Three, rounds per player depending on course, $120 to $245.
• Fact bites: 23 presidents have visited. Golfer Sam Snead had early experience as a pro here. Spa massages at $150, $220 for 50-minute and 80-minute rubs respectively.
• Details: 1-800-838-1766, www.thehomestead.com.
Bedford Springs Resort, Bedford, Pa.
100 miles east of Pittsburgh, 135 miles northwest of Washington, D.C.
• Acreage: 2,200.
• Opened: 1804 (on spring property purchased 1796).
• Rooms: 216.
• Rates: Introductory rates per night: $249 up.
• Golf courses: One, 18-hole round per player, $115, $70 twilight (after 3 p.m.)
• Fact bites: Seven presidents (some say nine) have visited. A 36-star flag behind registration desk flew at Civil War’s end. Indoor pool in a classic 1905 Grecian “temple” is spring-fed, heated.
• Details: 1-866-623-8176, www.bedfordspringsresort.com.
Contractors
A partial list of Pennsylvania “midwives” to the rebirth of Bedford Springs:
Reynolds Construction Inc., Harrisburg, general contractor; Miller Electric Construction Inc., Allison Park, electrical systems; G.N. McCrossin Co., Bellefonte, heating, ventilating, air-conditioning, and foundation of the spa wing; Rob-Bern Associates Inc., West Mifflin, carpentry; W.G. Tomko & Sons Inc., Finleyville, plumbing; L.R. Constanzo Co., Scranton, windows and columns; Hemlock Hills Landscaping Co., Altoona, interior landscaping (flower boxes, potted trees etc.).
Jack Markowitz can be reached at jmarkowitz@tribweb.com.