I’m currently in the process of concluding work with a historic reuse team focused on next steps for the H.D. Hudson Manufacturing Building in Hastings, Minnesota. The City-owned Hudson Building is of substantial size, and offers open floor plans and high ceilings – a blank, solid canvas. The Hudson was featured as a “hot property” recently in the Minneapolis Star Tribune.
From a finance perspective, the chief hurdle for historic reuse is reconciling long-term lease rates or purchase prices, with a rehabilitation investment that may include remediation, demolition, site costs, and a collection of items that can petrify typical investors: HVAC, roofs, stormwater management, vertical circulation, accessibility improvements. My role on the team, led by Will Stark of Stark Preservation Planning, has been to:
- Evaluate and quantify the long-term financial gap between the value of the building’s net income and its required investment
- Identify funding sources and mechanisms that private and public parties could employ to make reuse of the building feasible in a financial sense
- Inform scenarios for the City’s next steps with the building, with financial analysis. Cost, speed, and scale of reuse each impact the financial outlook for its future
- Narrate findings related to the downtown marketplace and project finance, to citizens, the City Council, and other stakeholders.
Historic structures offer uncommon attributes for the very reason that their construction occurred in a different marketplace. In the late 1800s when the Hudson Company put up the Hastings facility, materials including stone and lumber were available at lower real cost than today. The proximity of the building to the Mississippi River distinguishes the building regionally, in part because regulations have evolved to protect the river from development impacts. The reuse or demolition of the structure will, either way, continue to influence the health of downtown Hastings.