Converting a Church to Multi-Family

[Philip McTighe]

Hello all,

I found a commercial property for sale in Frederick, Maryland. It is currently a empty synagogue and a historic building. I am completely uneducated when it comes to what is needed to be known about being able to convert this to multi-family units.

As noted, it is in a historic District so I am assuming like most historic districts, the outside would have to remain the same (which wouldnt be a problem). But the questions I have are in relation to knowing what to do and how to know before I buy if it can be converted. 

I reached out to the broker and she told me and showed me documents saying its a non-conforming DBO zoned commercial building. DBO meaning Downtown Commercial.

I am thinking there is a lot of zoning, permitting, general paperwork and government/historic paperwork and permissions to be given on this. 

Looking for general advise and guidance of anyone who has done this type of conversation in Frederick or in similar circumstances.

Thanks in advance!

[Phil G.]

No experience in MD, but I've done a couple of historic reuse projects here in Massachusetts.  There are lots of moving parts with this type of project.   There can be a lot of red tape, but they can be fun and rewarding projects.  I've looked at a couple of churches as potential projects, but the ones I looked at were difficult to make work architecturally.

Cities are often eager to work with developers in historic districts.  They don't want vacant buildings to fall in disrepair.  They will have some strict guidelines in terms of exterior preservation.  My projects were mill buildings so there wasn't any issues with what I did with the interior.  If there are historic features with the interior, that may complicate the process.

First thing I would check are zoning ordinances.  Permitted use in the zoning district.   Other zoning gotchas I've had to deal with are parking requirements.   There will most likely be an approval process, special permits, etc.  A pain to be sure, but if you're up for it, doable.

There can be benefits to this type of development.  If the historic district is recognized by the National Park Service or building is on the Registry of Historic Places, there may be historic preservation tax credits available to help fund the deal.  Federal tax credits for 20% of eligible project costs (excluding acquisition) are available for income producing buildings.  These tax credits can be sold (at a discount) to help raise capital.  This is a pretty complicated process in itself, so the project has to be big enough to be worth the cost/effort.  You can learn more about the program here:  

http://www.nps.gov/tps/tax-incentives.htm