If you think big development means working with a big bank, downtown Lafayette has a project you need to see.
Ever looked at a grand old municipal building and imagined what it might be like to live there? Dyke Nelson, founder and lead designer of Baton Rouge architectural firm DNA Workshop, does it all the time. As one of the South’s leading architectural firms specializing in adapting historic structures to serve contemporary applications, Nelson and his team are experts at navigating complex historic tax credits to breathe new life into old spaces.
Their latest project—a $20 million revitalization of the Lafayette Parish Courthouse complex—has transformed a 1960s eyesore into a vibrant mixed-use development in the heart of downtown Lafayette. In March, the 83,000-square-foot complex, which had stood vacant for more than 15 years, reopened as The Lofts at The Municipal, offering 69 amenity-rich residential units plus 15,000 square feet of commercial space.
Working closely with the project’s developers and using a financing “stack” headed by Bank of St. Francisville, Nelson and the DNA team have delivered a striking transformation. Their overhaul of the Municipal complex preserves remarkable architectural elements of the original structure, while also leveraging state and federal historic tax credit opportunities to maximize financial viability.
The result? A Lafayette landmark returned to commerce, an infusion of new residential energy into a downtown community, and architectural integrity preserved. When architectural vision, thoughtful development, and responsive banking all work together, this is what success looks like.
“A Good 1960s Building”
By the time the project got underway in 2018, Lafayette’s municipal complex was in deplorable condition. Nelson explained that when the city put out a request for proposals to redevelop the circa-1965 complex, they received twelve proposals ranging from high-rises to commercial properties. Joining forces with developers Mike Frugé, EJ Krampe, and David Weinstein, Nelson and DNA submitted a proposal for a mixed-use, residential/commercial development that preserved many unique features of the original structure. “Our proposal won out because it was considered to be a good fit for the neighborhood and the downtown location,” Nelson said.
“The building was in the center of Lafayette, just sitting there as an eyesore,” said Georgia LaNasa, DNA’s lead architect on the project. “But from an architect’s point of view that makes for an interesting challenge because when you open an old building, you don’t know what you’re going to get.” The team was excited by what they got.
In the courthouse building, the west and north lobbies' original terrazzo flooring was salvageable. The federal courtroom featured a handsome, chevron-patterned marble and wood wall behind the judges' bench. The police headquarters had exterior walls built of curved granite and a monumental staircase finished with beautiful, metal handrailings. On the building’s north side was a box screen built of aluminum in a honeycomb beehive pattern, which ironically had been added because residents considered the original building ugly.
“It’s up to the architects to figure out how to use the historic features in the modern context,” explained Nelson. “That can be tricky, but it gives a competitive advantage in the market because the project is going to be unique from every other building.”
A Complex “Capital Stack”
Financing the $20 million Lafayette Parish Courthouse project required building a ‘capital stack’ that involved a construction lender, a bridge lender, and a third group that monetized federal and state tax credits, explained Douglas Dupont, Bank of St. Francisville’s Market President for Baton Rouge.
BSF served as the construction lender, contributing around $10 million in financing, placing a mortgage lien on the property and writing subordination agreements to prioritize the order in which debts would be repaid.
"A bank our size would rarely get involved in a project this complex,” Dupont noted. “But our involvement was based on the strength of the relationship with David [Weinstein] and Dyke [Nelson], whose history with us allowed us to be comfortable.”
Nelson agreed. “When it comes to financing complex development projects, not a lot of banks are willing to go outside their comfort zone,” he said. “But Bank of St. Francisville trusted that we’ve stood behind any project we’ve been involved with in the past. Our experience with navigating tax incentives was part of it. A large part of our equity in the deal was the historic tax credit piece, so the financing arrangement was important to get right.”
Preserving History to Maximize Value
Nelson explained that qualifying the project for maximum federal and state tax credits involved a lot of give-and-take.
“When it comes to the federal credits the National Park Service has very specific rules,” he said. “They want to keep as much of the original building as possible, but when you’re switching from courthouse to residential there’s going to be lots to adjust.”
DNA’s years of experience working with both federal agencies and the Louisiana Division of Historic Preservation enabled them to find compromises, such as designating the original federal courtroom and judges’ chambers to serve as publicly accessible commercial spaces, which will be available for rent.
As a community evolves, so do patterns of living and working for the people who call it home. When that happens, the roles played by historic public buildings need to change with them. Ultimately, Nelson explained, accommodating that change is what the federal and state historic tax credit programs are all about.
“Sure, working with historic structures can be a challenge, but when you redevelop a historic building to serve a new purpose you get something that’s more unique, and you get a higher quality product on the back end,” he said. “From an environmental standpoint, from a community standpoint, it’s costly to start from scratch. And at the end of the day, you’re preserving something of value to the community. The embodied energy of an existing building is tremendous.”
Federal and state historic tax credits can be used for buildings 50 years or older. To learn more about how your bank can help finance an adaptive reuse project, contact us to make an appointment.