Kentucky Reuse Project Has Big Impact in Small Town


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Just down the road from the birthplace of Abraham Lincoln, a small community fights to retain its character and identity. Like our former president, the local community is resilient and unwavering in its ideals as it pushes on toward the future. So maybe the grand comparisons end there, but the town of Buffalo in LaRue County, Ky., is fighting for its future. In rural Kentucky, school consolidation has become a fact of life. While the central cities of many counties continue to slowly grow, the surrounding communities are aging and disappearing from the map. For the past 20 years or so, it has become commonplace for the state and counties to build larger centralized schools, and pull up roots from the smaller towns and communities where local schools once thrived. It is often a heart-wrenching and controversial decision as it leaves smaller towns with large, abandoned school buildings in their core.

Many who work in the preservation field on a national level would immediately recognize the potential of the situation; however, this drama unfolds in a county of just over 14,000 in population, with a median income of around $32,000, and in a town with under 1,500 in population. The economics of preservation are challenging in places like these, and the odds of successful preservation are low. In spite of the odds, this is the success story of the Buffalo School.

In the spring of 2008, Amy Sparrow Potts, the Rural Heritage Program director for Preservation Kentucky, was working in Hodgenville, LaRue County, Ky. One of her missions was to help explore disposition strategies with the LaRue County Board of Education and the LaRue County Economic Development Office for the two recently vacated and prominent rural schools in LaRue County. Her mission led her to contact AU Associates, Inc., a Lexington, Ky., developer specializing in adaptive use of historic properties. After visiting the Buffalo School property and meeting with community leaders, AU Associates believed that the building had enough historic significance and charm to be potentially preserved as affordable housing for seniors; however, there were doubts about the size of the market and the financial feasibility of such a small project.

By summer of that year, Preservation Kentucky and AU Associates looked to the National Trust for Historic Preservation for help. There were two pressing issues: how to list the building in the National Register of Historic Places (to qualify for historic rehab tax credits) and how to understand the housing market in such a small community. The National Trust responded by granting funds to commission both the National Register nomination and the market study. The market study concluded that there was a market for up to 20 affordable senior apartments if rents were kept low and if the new housing was superior to its local-market competition.

National Register Listing

AU Associates hired Erin Riney, a native Kentuckian and professor of English, to tackle the National Register nomination. Riney was able to establish that this place was the centerpiece of a “school town” and that much local activity centered on the use of this site for educational and community functions.

Through first-hand interviews with many of the original families who settled in Buffalo, as well as research into the history of the Buffalo School, she documented that the Buffalo School site had served educational purposes for more than 130 years. Key events included the creation of a small college on the site in 1874, the repurposing of the site in the 1890s for a K-12 school, the construction in 1936 by the WPA of the current school building along with the ceding of control for the school from Buffalo to LaRue County, desegregation of the school in 1967, and the closure of the school due to consolidation in 2007. Further, the original gym, which is more than 30 years older than the school building, has always served as the backbone of community activity: athletic and otherwise. In the 1990s when the school board became unable to properly care for the old gym, private citizens pitched in to donate materials and labor to keep the gym in good repair and usable for the community.

This research established that the school could certainly be listed in the National Register under Criterion A, as a building that can be associated with events that have made a significant contribution to the broad patterns of the history of the area. Indeed, when consolidation came calling in 2007, many feared that this would mark the end of the community, leaving not only the largest and most central building in town vacant but marking the end for many in town who no longer had a reason to stay.

Adaptive Use Plan

With an action plan in place, it was up to AU Associates to make a case for the adaptive use of the school to community leaders, the Board of Education, and the Town of Buffalo. Rightly so, neighborhood residents were skeptical at first that such a miracle would come without any strings attached—and the strings they were most worried about were crime and vandalism if the building remained vacant for long, and the prospect that the project could deteriorate into slum housing if done poorly.

In a mark of Kentucky stick-to-itiveness, the Board of Education, the developer, the local press, and any interested county citizens were given a personal tour of a similar property AU Associates had created in Glasgow, Ky., about an hour from Buffalo. Surely, it was quite a sight to see the group of adults on the school bus rolling through the Kentucky hills in the early evening, many of whom had not been on a yellow bus in more than 50 years! The tour proved so overwhelmingly successful that the neighborhood residents and community leaders became the biggest cheerleaders of the project. Positive letters to the editor about it flooded the local newspaper.

In October of 2008, an application for funding was submitted to the Kentucky Housing Corporation for a 19-unit affordable, seniors housing development that would utilize both State and Federal Historic Tax Credits, Low-Income Housing Tax Credits, and HOME financing.

Pressing On

And there’s the happy ending, right? Not quite. The application ended up unfunded, lingering as the first application on the wait list for low-income housing tax credits. It had just missed being funded by less than five points. At this point, and during the largest recession since the Great Depression, many were unsure if the project would continue, especially since the equity market for the purchase of the combination of historic and low-income credits was at rock bottom. Nevertheless, the neighborhood and community encouraged the developer to press on and continue to seek funding.

The developer had secured a local bank, First Federal Bank of Elizabethtown, to purchase the credits and the bank did not waiver during the economic crisis. As other projects that had been funded struggled to get underway, AU Associates pressed Kentucky Housing to fund this project which was shovel-ready and could begin immediately.

In November of 2009, AU Associates was successful. In fact, Buffalo School Apartments was so ready to proceed that within 14 months of the award, the project was completed and placed in service ahead of schedule. HOME funds had been replaced with federal economic stimulus funds in the project because of its shovel-readiness and the desire of the state government to unveil stimulus projects that were visible at the local level. In February 2011, AU Associates and its related contractor, AU Construction, were ready to unveil the finished product to the community.

Happy Ending/New Beginning

The grand opening, held in the old gymnasium, attracted almost 200 people and was an emotional ceremony filled with recollections of the past, an appreciation of the present restoration of the beautiful building, and hope for the future of the town of Buffalo.

Many of the grand opening guests, young and old, took pride in the finished product and appreciated the treatment of historic details, which included exposing the hardwood floors that had been covered up for decades and the original high ceilings that feature some beautiful arches. Newly installed amenities include traditional maple cabinetry by MasterBuilt Cabinets (which manufactured the cabinets only a mile from the site), Energy Star appliances, under-cabinet lighting, and washers and dryers in each unit. There is a furnished community room as well as a landscaped courtyard with grills, a gazebo, art easels, benches, and picnic tables that provide gathering spaces.

At just over $2.8 million dollars in total development costs, the complete renovation and restoration of Buffalo School produced 11 one-bedroom and 8 two-bedroom apartments for low-income seniors. With tenant-paid rents starting at $325 per month, the combination of historic and low-income tax credits, and $350,000 in stimulus funding, this project is mortgage free and designed to be extremely affordable to the rural, senior population it serves.

Financially, it does not make a lot of sense to do such a small project in a rural area. The efficiencies of scale are just not there. However, in most of Kentucky, a large-scale development is not possible. These small projects are the lifeblood of affordable housing in rural areas and provide quality housing to those in need. AU Associates deals routinely in these hard-to-fund small projects by focusing on keeping debt low, operating reserves high, and the community involved. A newly built 19-unit townhouse development certainly would not have attracted the attention and nostalgia that this historic school conversion has generated. This nostalgia is tangible. Community involvement means fewer turnovers and fewer vacancies.

Among the attendees at the grand opening were Buffalo School’s principals for its last 37 years along with many of the teachers and students who walked the halls. Now many of them could once again call Buffalo School home.

Much credit for this project is due to Amy Sparrow Potts with Preservation Kentucky, Bob Sims with LaRue County Economic Development, LaRue County Judge/Executive Tommy Turner and the Superintendent of LaRue County Schools Sam Sanders for being key players in helping Buffalo School Apartments become a reality. Their vision in finding AU Associates, welcoming them to their community, and supporting them throughout this project made this a tremendously rewarding and successful experience for all involved.