BNAS Housing Disposition

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BNAS Housing Disposition Redevelopment Plan

• Presented to
• MaineHousing 2009 Affordable Housing Conference

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BNAS Housing Goals

• Stabilize local housing markets
• Attract young families- support local school
  system, social economic diversity, etc.
• Limit fiscal impact to host communities
• Support MRRA business development
• Achieve longstanding affordable housing objectives

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The Challenge

• 2,100/- families exiting market
• 606/- home owners
• 1459/- renters
• Current apartment vacancy 8-10
• 702 former military housing units introduced to
  private market
• Generally limited population growth

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Market Impact Area

• Impact from York to Penobscot Counties
• Concentration ?
• Rental Housing
• Bath/Brunswick
• Vacancies increase by up to 30

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BNAS Portfolio- Assets

• 702 units in 7 neighbor-hoods, 882,154 sq. ft.
• Low density/clustered
• Generally above market size/quality
• Smart growth location/site plans
• Potential condo conversion

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BNAS Housing- Liabilities

• Uniformity of design
• 30/- functional obsolescence
• Ground lease
• Substandard utilities
• Potential Imbalance
• Supply-3/4BR townhomes
• Demand- More spacious 2BR flats/cottages

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Current Ownership
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Strategic Implications Ground Lease
Critical point of leverage/community concern (if
goals not aligned)

• Lessor
• Land value impaired by 1/yr lease 45 yrs. NPV?
• Potential disincentive to maintain leasehold
• Inadequate revenue to support asset mgt
• Limited control

• Lessee
• Barrier to capital access
• Risk of renewal incentive to reinvest?
• Obligation to improve infrastructure?
• Barrier to condo conversion

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Goal Achieve Market Equilibrium

• Tap New Demand
• First time home buyers
• Affordable rentals
• New BNAS Employees
• Commuters
• Retirees 2nd homes

• Rationalize Supply
• Demolish obsolescent bldgs
• BNAS housing
• BHA units (transfer)
• TDR blighted units

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Market Goals- Soft(en) Landing
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Design Objectives

• Revitalize Build on excellent site plan, common
  areas, curvilinear street pattern
• Connect Vehicular, bike and pedestrian
  connections create community and a better
  quality of place
• Personalize Diversity personalized
  architecture, individualized yards and unit
  plans

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Building on Design Assets
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Illustration McKeen Street

• Private lots
• Intergenerational
• FTHB
• Retirees
• Street/trail connections
• Mixed use
• Façade landscape

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Design Improvements

• Selective replacement siding/roofing/shutters
• Private lots/fencing/landscaping
• Reduce BRs increase common living areas
• Add windows/sliders new entryways
• Buyer allowance for personalized improvements
• Separation of utilities
• Implement green design improvements (LEED
  Neighborhood designation?)

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Market Niche by Neighborhood
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Tiered Pricing Strategy
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Development Structure
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Recommendation 1 Site Control

• Economic development conveyance of land
• Negotiate
• Acquisition Leasehold improvements or
• Joint Venture/revised ground lease with Purchaser
• Ground lease, utilities, access to capital as
  leverage

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Recommendation 2 Ownership

• Eliminate bifurcation of interest in
  land/leasehold
• Allow for conversion to condominium ownership
  mixed income/mixed tenure
• Achieve control through restrictive covenants
  shared appreciation docs

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Recommendation 3 Marketing

• Two tiered marketing campaign
• Regional
• First time home buyers
• Commuters/new base employees
• Elimination of obsolescent MF
• National
• Retirees 2nd home buyers
• Balance affordability, diversity and market
  valuations through mixed income/tenure plan

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Recommendation 4 Design

• Adopt/Implement Great American Neighborhood
  Design standard
• Personalize sub-neighborhoods by market
• Improve connectivity
• Substitute new market image by strategic
  improvements (i.e. Green Building, etc.)

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Recommendation 5 Asset Mgt

• Insist on top tier asset mgt plan
• Plan for extended (5yr.) vacancy/absorption
• Resist unilateral focus on cost control
• Phase redevelopment to maximize efficiencies

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Risk Short-Term Profit Maximization

• Race to bottom fill units at any price
• Unilateral focus cost reduction limit security,
  mgt/maintenance
• Adverse relationship land leasehold.
• Potential cascading market effects