Adaptive reuse offers real estate developers — and the communities they work in — a host of benefits. It preserves existing architecture while making use of new energy-efficient materials, reduces pollution and waste, and transforms vacant, abandoned or deteriorated properties into opportunities.
That is the approach developers Clay Adkisson and Austen Helfrich are taking. They are interested in what is left behind when big cities develop — especially cities like their native Nashville, Tennessee, which has experienced explosive growth over the last decade. Adkisson has a background in architecture and urban design; Helfrich’s focus is finance and development. Together they are delivering quality affordable housing in response to Nashville’s rental housing crisis.
Their focus is North Nashville, a historically Black neighborhood that is also strategically located at a confluence of highways. Seventy-five years ago, it was a transit corridor dotted with mid-century motels — but development has brought displacement, and the abundant motels have fallen into disrepair.
Rendering of the transformed King's Inn Motel in Nashville, TN.
Enter Adkisson and Helfrich.
“We wanted to be part of the solution, working with the local community on transformative development,” says Adkisson. They have two projects under construction in this area, with a third on the way.
A former Super 8, now dubbed The Wilder, has been transformed into 97 studio apartments with a $3.3 million loan from BlueHub Loan Fund and additional financing from other sources. Forty percent of the units will be deed-restricted to individuals earning at or below 75% of the area median income (AMI). The adaption required creativity. The old motel lobby has become a co-working space for tenants; the commercial laundry now houses both washer and dryers and a dog spa; there is a Peloton studio and a swimming pool. Adkisson notes, “We are focused on going beyond what people think of when they think of affordable housing.” That is true for cosmetic finishes bespoke cabinets, Murphy beds, luxury conveniences — and upgraded essentials like a new watermain that brings fresh water into the building.
Directly adjacent, the team has purchased and is renovating the King’s Inn Motel with a $6.67 million loan from BlueHub Loan Fund and local CDFI, The Housing Fund; it will provide 55 units of workforce housing with 25% of the units deed-restricted to individuals earning at or below 50% of AMI.
Adkisson and Helfrich have additional projects in predevelopment across the street. “We’re building a community within the community,” Helfrich says. “We gave the mayor’s office a tour recently, and they asked, ‘How did you make this happen? We have been trying for 10 years.’” The answer is that the team works closely with the community. “The community’s leaders are excited that we are transitioning transient properties into permanent housing for Nashvillians. We aren’t moving out any existing residents. We are just adding to the total housing stock.”
“If you can help community leaders breathe new life into existing assets without disrupting the fabric of the neighborhood, that is a win.” He continues, “Those considerations drive the scale and location of the projects we seek. And it’s why we focus on adaptive reuse.”
“BlueHub really supercharges the sort of hyper-local development that we are interested in. BlueHub brings critical institutional expertise and access to capital — and they immediately get the vision. They see what a project can mean for a neighborhood.”
Clay Adkisson | Partner, Openworks, LLC Design & Development
Like many growing cities, Nashville has done a tremendous job of building new high-end properties — but workforce housing has been squeezed. Rents at The Wilder and King’s Inn will be 25% to 30% lower than current rents for comparable apartments, and both will accept Section 8 Housing Choice Vouchers, enabling tenants to pay 30% of their income for rent and utilities.
Adkisson observes, “Housing itself is only part of the problem. There are a lot of other pieces that go into making housing equitable: proximity to educational resources, to childcare, to groceries. If it takes you an hour and a half to get to the grocery store because the bus system is terrible or traffic’s a nightmare, then that’s no good.”
That’s what makes the North Nashville location so special.
Adkisson continues, “This neighborhood is located less than a mile from the heart of downtown, the epicenter of development in the city. It is proximate to two major transit arteries. There are three grocery stores within a mile.”
Of course, retrofitting a former motel has its challenges. “In The Wilder, the largest unit is 300 square feet,” says Adkisson, “so we have to be really thoughtful with our design to provide the most livability.”
They also found they needed a partner who understood their vision. “One of the biggest hurdles in adaptive reuse is finding good financial partners. A local Nashville lender is much more comfortable lending to a high-end ground-up development. When we told lenders that we wanted to turn a motel into apartments, the door would shut,” Adkisson says.
“BlueHub’s scale and experience was crucial; they were comfortable based on their adaptive reuse experience in other cities.” BlueHub Loan Fund brought more than money. “Having a well-organized, sophisticated partner who gets the vision is a massive benefit. You run into all kinds of issues when you start taking old buildings apart; BlueHub was able to help us figure out solutions.”
Sustainability was one area in which BlueHub’s backing was essential. Adkisson notes, “It’s the right thing to do for any type of housing — and it drives down utilities for our tenants — but it’s expensive. In affordable housing, there is not a lot of room to think about sustainability until you work with partners who believe in it.” For The Wilder and King’s Inn, the team was able to surpass local requirements, installing Energy Star rated appliances, tankless water heaters, low-flow water systems and energy monitoring sensors throughout. The Wilder’s stormwater mitigation and remediation even doubles as a cobblestoned poolside sundeck. That type of creative problem-solving is integral to successful adaptive reuse, whether in Nashville, Tennessee or Bessemer, Alabama.
A rendering of City Hall Lofts, a workforce housing development in Bessemer, AL.
In Bessemer, 15 miles southwest of Birmingham, the historic City Hall building is finding new life as City Hall Lofts, a 32-unit workforce housing development. The tenants are expected to be households earning below 80% of AMI. Interior renovations of the art deco building, with its original 1890s clock tower, will draw inspiration from the deco era, while incorporating modern conveniences, such as quartz countertops and luxury plank flooring, in-unit washers and dryers, an onsite fitness studio — and throughout, energy-efficient construction. A $505,000 predevelopment line of credit from BlueHub Loan Fund helped initiate this transformation from a deteriorating and vacant property to community asset.
Adaptive reuse has applications beyond housing. In Memphis, Tennessee, Memphis Merit Academy (MMA) is turning a former Kroger and shopping mall into a K-8 school and ecosystem of needs for students with sufficient vacant space to add a high school as their student population grows. The school selected the Parkway Village neighborhood for their new campus because local families needed a higher-quality school option; nine of the 13 local schools are in the bottom 10% for the state. MMA will be the area’s first local charter school. Dedicated to “educating scholars for success in high school, college and life,” MMA opened in 2019. It provides rigorous academics, high quality instruction and character development for all scholars, as well as the chance to participate in sports and activities such a majorette, basketball, cheer, chess and more. Graduates are expected to have a clear picture of what college success entails and the skills to build a high school transcript that will open college doors to them.
With $11 million in financing from BlueHub, MMA is transforming the mall space, creating an inner atrium, library and cafeteria, flanked by classrooms for 330 lower-school students on one side and 265 upper-school students on the other.
As with other adaptive reuse projects, MMA’s conversion demonstrates the benefits of looking creatively at an area’s existing assets to find solutions for shifting community needs. BlueHub Loan Fund stands ready to evolve in tandem.
A rendering of Memphis Merit Academy, a K-8 public charter school in Memphis, TN.
