Franklin Hotel Restoration Sure Bet for State, Federal Tax Credits
Officials in Columbus reviewing tax credit applications; owner confident project will get financial support
Restoring the Franklin Hotel to its full potential may turn out to be easier than it looks from a financial standpoint.
He left the capital feeling confident about the project's odds of getting state and federal support — so confident that he met with the project architect and builder Thursday about starting some work as early as next week.
Burbick said there is still a lot of red tape to cut through, but state officials assured him the restoration project's score of 80 on a 100 point rating scale means it will earn approval on both state and federal levels.
"We are guaranteed … assuming we follow all the rules," Burbick said. "Most of the projects that get approved are in the 60 to 70 point range."
Miles of red tape
The application process for state and federal tax credits is quite complex.
First, Burbick applied to get the building on the National Register of Historic Places, which is managed by the National Parks Service. That application took part in two phases. Burbick applied with the National Parks Service for a historic register listing, and Kent City Council established, through a Certified Local Government designation, a historic preservation district that at present only includes the old hotel.
"The last piece of that paper work was over-nighted to the state (Wednesday) night," Burbick said. "It will be on its way to Washington, D.C. (today). That essentially guarantees it will be on the register."
Burbick said they went both the traditional application route and used the historic preservation district just in case one avenue failed. So the project is virtually guaranteed to earn federal tax credits in the amount of about 20 percent of the entire restoration cost.
With the federal credits virtually guaranteed, the project is in the midst of the state credit application process.
"But the state is somewhat tied into the federal end, in that it’s actually federal money, but it’s administered through the state," Burbick said.
Officials with the state historic preservation office are reviewing the application, which at this point Burbick is confident is merely a formality. State authorities are expected to recommend federal authorities sign off on releasing a combination of state cash and tax credits for the restoration.
Combined, the state and federal tax credits amount to about 45 percent of the estimated $4 million project cost, Burbick said. As much as $2.5 million to $3 million will be applied to the credits, and up to $1 million to $1.25 million will be reimbursed in the form of credits and grants.
"Which, when I budgeted this thing originally, that was in the calculation as to what we were going to get," he said. "We haven’t gained anything. That’s exactly what we’ve expected to get."
Burbick will make his last submission for the state credits in about three weeks.
Tenants locked in
Burbick said he has commitments for every square foot in the five-story building. Those commitments helped earn the project's high score in the state's evaluation.
He declined to identify the tenants specifically, but Burbick laid out the floor plans as follows.
- Basement: a combination of retail and office space
- First floor, second floor mezzanine: an existing franchise restaurant relocation and expansion owned by Kent residents
- Third floor: office space for two different firms
- Fourth floor: five small rental apartments
- Fifth floor: two to three larger rental apartments
By the end of March, Burbick expects to have leases signed for the retail and commercial aspects. And he is personally committed to building the residential spaces on the top two floors.
"They're all essentially locked in," he said.
Visible changes coming soon
Initially, Burbick feared the tax credit applications would force delays on the restoration while he waited for final approvals. He learned Wednesday that's not the case.
As of Wednesday, the project's contractor can start work on four elements. Work can start on replacing the roof, repairing massive holes in a few of the main floors, cleaning interior debris and building retaining walls on the back parking lot.
"I wanted to start next week on some of these things because I want to get as far ahead as we can," Burbick said. "On other elements, because our point score is so high, the state is saying 'You don’t have to wait for federal approval because you’re going to be virtually guaranteed.'"
The rest of the work can start as early as mid May when officials in Columbus are expected to recommend the project and send the state application to Washington, D.C. for review.
Originally, it looked as if the first three floors could be open by this fall. That may drag a bit, Burbick said, but overall the restoration is moving ahead smoothly.
"It's going as well as can be expected," he said.
Click on the below links to take a "virtual tour" of the old hotel: