Affordable Housing Pays Big Dividends for All
Wolverine Building Group
Founded in Grand Rapids, Michigan, in 1939 as a tile installation subcontractor, Wolverine Building Group (Wolverine) has grown into a large general contractor with national reach. The company’s diverse portfolio includes multifamily housing and mixed-use projects, historic renovations, and office and retail buildings.
Wolverine’s expertise in the affordable housing arena stems in part from its work on historic renovation projects. Those projects frequently utilize federal tax credits under the national Historic Preservation Fund. “Understanding how government programs use tax credits for historic renovation work gives Wolverine a leg up when it comes to understanding other federal tax credit programs, such as the Low-Income Housing Tax Credit (LIHTC) program,” says Aaron Jonker, President at Wolverine Building Group. Jonker specializes in ground-up, multi-unit construction and complex historic renovations involving city, state and federal historic tax credit compliance, as well as LIHTC and requirements from myriad of other funding sources.
“We believe that affordable housing benefits everyone,” adds Jonker. “It provides stable housing, adds jobs to the local economy, and builds community. In addition, it is a solid business practice because the development cycle ebbs and flows differently than other construction cycles.”
Without stable housing, people often cannot find employment, lack easy access to social services, and have trouble participating in the community at large. In addition, as cities experience gentrification—as Grand Rapids is experiencing now—many people with moderate-to-low incomes get pushed further and further from centers of employment, and are faced with difficult commutes that add further challenges.
LIHTC-funded housing is built to the same standards as market rate housing; the primary difference is that the former frequently has ADA requirements, including the installation of ramps, wheelchair-accessible spaces and elevators (with senior and disabled populations in mind). Also, affordable housing is often designed to accommodate families, so a higher proportion of units have two or three bedrooms and other family-friendly amenities, such as play areas.
Renovation Efforts Save Housing Options
Apple Blossom Apartments, developed by The Hovey Companies of Dewitt, Michigan, is a prime example of a restoration/renovation and repurposing project that transformed a historic, century-old school into 22 affordable, multi-bedroom units. Wolverine renovated the 37,000-square-foot building as a sustainable project to reduce life-cycle costs and negative environmental impacts, and to provide healthier living spaces for residents. It is a certified Enterprise Green Community.
Another one of Wolverine’s numerous affordable housing projects is Heather Gardens in Kalamazoo, Michigan. The first phase entailed a complete renovation of several buildings that were originally built as part of a Housing and Urban Development project. It was co-developed by Brinshore Development LLC of Northbrook, Illinois and the LIFT Foundation, a nonprofit housing provider based in Kalamazoo. The second phase is scheduled to start this fall. In addition to upgrading much-needed affordable housing, this undertaking will help to stabilize the community and create numerous jobs in the area.
In 2014, Wolverine finished renovating the historic Stuyvesant Apartments. The building—originally constructed as a residential home in 1889—was remodeled into a multi-unit living facility in 1926. “When the building was purchased by The Eagle Point Companies of South Portland, Maine, we were hired to complete an extensive restoration,” says Jonker. “It is now an affordable housing community with 87 one- and two-bedroom units. The extensive restoration was phased to minimize the impact to residents, most of whom are now back in their original homes.”
The complex funding of this project required the Wolverine team to work with multiple financing partners, including: Red Stone Equity Partners, Founders Bank & Trust, Michigan State Housing Development Authority, the Dept. of Housing & Urban Development, and the city of Grand Rapids. The project includes a 9 percent LIHTC, a property tax PILOT (payment in lieu of taxes), and a project-based Section 8 subsidy. Wolverine’s in-depth knowledge of complex funding requirements gives the company a competitive edge in successfully completing affordable housing projects of this nature.
Jonker adds: “Renovations included site improvements, the addition of barrier-free units, and exterior changes to improve accessibility. With an emphasis on energy efficiency, all units have ENERGY STAR-rated appliances; new electrical, mechanical and plumbing; new cabinets, countertops and fixtures; and all new finishes. The apartment complex also has a community room and a recycling center, and is certified as an Enterprise Green Community.”
New Construction with Tax Credit Financing
Wolverine works with a number of developers who build new buildings and are equally committed to providing affordable housing options to their communities. One such partnership example involves Medallion Management Inc. of Kalamazoo, part of a family of companies “serving the needs of families.” Wolverine worked with Medallion Management on the first two phases—and is currently planning the third—of the Silver Star Apartments, the first LIHTC-funded development in Michigan to provide permanent supportive housing to previously homeless veterans.
During the initial phases of the Silver Star Apartments project, Wolverine built housing on the Battle Creek VA Medical Center’s campus to accommodate 175 veterans. The first phase involved the construction of 75 one-bedroom units and the second phase added 100 units; all units were reserved by the time the location opened. The Silver Star complex also includes office spaces with social services located on site to assist residents.
“An interesting result of this new housing is that one of the original residents has become the social services coordinator for the entire project,” says Jonker. “He went from being a homeless veteran to acquiring a stable job, and is now helping other formerly homeless veterans. It makes our company as the builder feel very gratified to play a small part in this kind of success.”
Another benefit to the community was the hiring of local firms—especially minority-owned—to complete the project. A letter of appreciation to the Wolverine team from Medallion Management’s Owner, Marv Veltkamp, states: “This project presented a number of logistical challenges, not least of which was completing ground-up construction work around a busy, fully occupied facility. Silver Star phase two was completed safely and on budget, with minimal impact to the residents and staff on site. The project also created local jobs. A critical component to the success of phase two was the involvement of minority-owned trade contractors. Wolverine’s team greeted this requirement with enthusiasm and ultimately exceeded our original goal of 14.6 percent minority-utilization hours, bringing the total to nearly 22 percent.”
A Personal Commitment
Jonker has served on the Michigan State Historic Preservation Network Board and is active with the Michigan Housing Council, the nation’s longest-serving statewide association of affordable housing professionals. As part of a larger commitment to support affordable housing developments, he and several developers, along with a group from the Michigan State Housing Development Authority, went to Washington, D.C., to meet with Michigan congressional delegates to discuss the LIHTC program and its benefits to the community, the residents it serves, and the jobs it creates.
Another aspect of Wolverine’s commitment to building strong communities is the company’s recent “Take Action Day,” building a new rope swing for Camp Roger, a local nonprofit kid’s camp located in Belding, Michigan. The camp is open to children, families and organizations throughout the entire year, serving more than 11,000 students annually in an outdoor education program. The camp hosts many churches and organizations through site rentals, and hosts special events and conferences.
“We believe that affordable housing benefits everyone, it provides stable housing, adds jobs to the local economy, and builds community.” Aaron Jonker, President, Wolverine Building Group
Looking Ahead
Jonker and Curt Mulder currently serve as Presidents of Wolverine, and will become the fifth-generation Owners of the now 77-year-old company in January 2018 when Chairmen Mike Kelly and Dick VanderZyden transfer ownership to Jonker and Mulder.
Multifamily developments account for approximately 66 percent of Wolverine’s business—and affordable housing projects comprise approximately 25 percent of that. Jonker concludes: “Throughout this upcoming ownership transition we will continue to focus on our pursuit of projects and developments that enhance the communities that they serve, including the construction of quality, affordable workforce housing. That includes working with developers who ask us to work with them on affordable housing in other states throughout the Midwest and nationwide.”