March 12, 2015
Tax Credit Investment by National New Markets Fund Will Help Transform Vacant Downtown Landmark into Mixed-Use Development
BIRMINGHAM, Ala., Mar 05, 2015 (BUSINESS WIRE) — Pizitz, LLC has secured $23 million in New Markets Tax Credit (NMTC) allocation from National New Markets Fund, LLC to help finance the mixed-use redevelopment of the Pizitz Building – a designated historic landmark in downtown Birmingham, Alabama that has been vacant for nearly 30 years.
The building was constructed in 1923 and served as the flagship for the regional Pizitz department store chain until it was shuttered in 1988, following sale of the family-owned retailer to McRae’s. The beloved architectural icon is located in the heart of Birmingham’s City Center, which like many downtown business districts is undergoing a revival. The area is classified as a severely distressed census tract and a “food desert” (area without ready access to fresh, healthy and affordable food) by the USDA.
The $23 million in NMTC financing is part of an ambitious $66 million redevelopment of the building, which has earned Historic Preservation Certification status from the U.S. National Park Service. When the project is complete in Fall 2016, the Pizitz Building will be transformed into a catalyst for the continued revitalization of downtown Birmingham.
The ground floor will serve as home to the new Birmingham Public Urban Market – a year-round, open-air market with stalls leased individually to locally owned and operated food-related businesses. Vendors will sell fresh produce and prepared foods with locally-sourced ingredients. The market will also include an event space for community gatherings and teaching demonstrations.
The mezzanine level will be home to beta, a contemporary shared workspace that combines traditional office necessities with a flexible environment that accommodates individuals, entrepreneurs and small businesses – from non-profits to tech start-ups. beta launched its first such workspace in 2011 in New Orleans, and operates an additional location in Roswell, New Mexico.
The remaining floors of the 251,210 square-foot, seven-story building will provide 143 residential units, with 20 percent set aside for affordable housing. Environmental sustainability is a priority, with a focus on achieving LEED (Leadership in Energy and Environmental Design) Certification.
The project has strong support from Birmingham Mayor William Bell, who has identified the Pizitz Building as a strategic catalyst for continued downtown growth. Other recent large-scale projects in the downtown area include the McWane Science Center expansion, Railroad Park, Regions Field Minor League Baseball Stadium, Uptown Entertainment District and the Lyric Theater.
Also supporting the project are REV Birmingham (the local economic development organization) and the Community Foundation of Greater Birmingham. They are among the local organizations that back the project for its capacity to bring sustainable businesses to Downtown Birmingham and create an environment where people want to live, work, shop and play.
In addition to the $23 Million in New Markets Tax Credits, the project also secured $27 million from the HUD 220 Senior Debt program and Federal and State Historic tax credits, as well as local funding through the HUD 108 program, a City Streetscape Grant and a Construction Sales Tax Abatement. U.S. Bank served as the tax credit investor.
“NMTCs are the funding lynchpin required to revitalize Birmingham’s landmark Pizitz building,” said National New Markets Fund Co-Founder and President Deborah La Franchi. “This long-awaited project marks a significant milestone in the effort to revitalize downtown into an economically and culturally vibrant resource for all the citizens of Birmingham.”
To read the full MarketWatch article click here.
