The Alexander Company has earned national recognition over the past 35 years for its work in historic preservation, urban revitalization, adaptive reuse and urban infill development. Given its vast experience, The Alexander Company has the flexibility to work on anything from a school to a prison – and a former prison in northern Virginia was its latest project.
The Lorton prison complex, which housed inmates in the District of Columbia from 1916 through 2001, was being redeveloped into a new mixed-use community called Liberty Crest. Upon completion, the community would feature 165 apartments, 157 townhouses, 24 single-family homes and more than 110,000 square feet of shops, restaurants and offices.
Due to the size and complexity of this rehabilitation project, in addition to the uniqueness of the location, The Alexander Company needed to identify a variety of funding sources that would help finance the project’s first phase of development, which consisted of redeveloping 165 apartments along with commercial space in the former chapel and power plant.
Baker Tilly solution
The project finance team within Baker Tilly worked closely with The Alexander Company to prepare a comprehensive financing package that would assist in funding the first phase of the project, including working with state and federal stakeholders to obtain available Historic Tax Credits for the development of the historic prison. Our team provided the following services:
- Financial projections
- Agreed Upon Procedures – Preliminary and Final 95-5 test (good cost/bad cost analysis)
- Consulting on preliminary estimates of eligible basis and qualified rehabilitation expenditures (QREs)
- Historic QRE cost certification
- Low-income housing tax credit cost certification through the Virginia Housing Development Authority
- 50 percent test for tax-exempt bond financing
Baker Tilly’s financial modeling and project structuring assisted The Alexander Company in securing more than $21.4 million in state and federal Historic Tax Credit equity for the first phase of the project’s development. In addition, $3.4 million was raised through low-income housing tax credit equity. As a result, the project’s first phase was fully funded and was recently completed, with apartments ready for immediate move-in. With the first phase complete and the project becoming a reality, developers and county officials are hopeful that the new community will bring new life to an area that has been virtually empty for years.
“It was important for us to find somebody who had the skill and expertise to ensure the necessary level of historic tax credits and low-income housing tax credits that would be available to our investors for financing much of the project. The specialization Baker Tilly brought to the table to assist in securing these credits helped eliminate financial gaps in our funding and really got the project off the ground.”
- Jonathan Beck, Development Project Manager
The Alexander Company, Inc.
After - Liberty Crest
Photos taken by Spielmann Studio
Before - Lorton Prison
Photos taken by Alan Gilbert Photography
For more information on this topic, or to learn how Baker Tilly project finance specialists can help, contact our team.