Renovation vs. New Construction

• INTRODUCTION AND OVERVIEW
• GET TO WORK
• FORMING A TEAM
• ON LOCATION
• • Preparing for the Site Search
  • Renovation vs. New Construction
  • Where to Look for Leads on Spaces
  • Before You Sign on the Dotted Line
  • Designing the Space You Need
• FINANCE

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Photo courtesy of Open Book.

Benefits of Renovation

In terms of configuring a space, new construction certainly provides more flexibility than renovation. But while new construction offers greater control in certain respects, there are key benefits in renovating existing properties. Abandoned warehouses and factories in post-industrial districts; storefronts and commercial buildings in struggling communities; former school buildings, churches, theatres. These are all potential candidates for conversion to live-work and studio space. In general, underused properties in underserved communities hold particular appeal for ASD projects for the following reasons:

Low acquisition cost

These properties may be priced below market rate because their unique building characters simply do not command a large market. In some instances, however, they may be located in brown field ares threatened by potential contamination.

Space character

These re-purposed buildings offer high ceilings, large open spaces, wide doors, and are flexible for space reconfiguration. These very characteristics are often ideal for art production.

Funding opportunities

A great many artists’ space projects are financed by Federal or State Historical Tax Credits while others benefit greatly from New Market Tax Credits, Community Development Block Grants, location in an Empowerment Zone. In each instance these opportunities are only targeted towards underserved and struggling communities.

Drawbacks of Renovation

That said, the benefits of renovations can also be accompanied by major pitfalls:

Zoning issues

Often zoned as commercial or industrial properties, spaces like warehouses and storefronts may be ideal for studio space conversion, but may face restrictions in the process of developing them for some uses, for example live/work spaces. Consult an architect or zoning officer for details. 

Environmental concerns

Although brown field sites come with lower prices, prudent budgeting should account for the high costs that can be associated with site clean up before it can be re-purposed. Before acquiring a brownfiled site, environmental studies by an environmental engineer are essential.

Higher renovation costs for historical buildings

Although old buildings usually are less expensive, additional costs might be needed for structural reinforcement, infrastructure upgrading, etc.  Preservation of historical elements are fundamental requirements for Historical Tax Credits, and should be accounted for in the projected expenses of the project as well. An architect or building inspector can help you estimate the associated costs.

Difficulty in securing loans

Conventional lenders are less willing to give out loans to properties in areas with high abandonment, which is often the case in underserved communities.  Check your ability to securing funding or seek help from financial institutions devoted to community development.

Sources

Developing Affordable Space for Artists:  A Summary of LISC Funded Projects. December 2004.  Community Partners Consultants, Inc. Date of Access: Oct 30, 2009. http://www.artistlink.org/file/Developing%20Affordable%20Space%20for%20Artists.pdf

Kartes, Cheryl. Creating Space: A Guide to Real Estate Development for Artists. New York: American Council for the Arts, 1993.

Walker, Chris. Artist Space Development: Financing. Washington D.C.: Urban Institute, 2007.