The Erickson Fritz Apartments - How We Did It
The Nuts and Bolts

Site Control - The first step of project development is typically securing site control. The Bill Naito Company contacted IHI about the Erickson and Fritz Buildings after we completed our renovation of the Rich Building, which we also purchased from the Bill Naito Company. That transaction created a good working relationship between our two companies - the Naito's liked IHI's work and the fact that we were bringing mixed-income housing to the Old Town neighborhood. In November, 2012 IHI entered into a Lease and Purchase and Sale Agreement for the Erickson and Fritz Buildings, which were sold as a package because they adjoin at the center of the block and share building systems. We began our due diligence and applied to the City of Portland for development funding in early 2013. We were awarded funding by the City, so "went hard" on our purchase agreement and began "leasing" the Erickson and Fritz Buildings for $10,000/month until January 31, 2014, when we acquired them for $2.2 Million.

Funding - Affordable housing development involves piecing together many different funding sources. The City of Portland awarded IHI funds on the condition that we apply to Oregon's Housing and Community Services Department for an allocation of federal 9% Low Income Housing Tax Credits and grant funds. Unfortunately we were not awarded funding by the State in 2013, but the City of Portland was so committed to bringing mixed-income housing to Old Town that it agreed to increase its funding award. This allowed IHI to change the deal structure and continue with the project! Rather than using 9% LIHTCs, we are using 4% LIHTCs and bonds to finance the creation of 62 new apartments. 4% LIHTCs are similar to 9% LIHTCs but provide much less equity, which is why we needed additional City funds. IHI also worked with the State to secure Oregon Affordable Housing Tax Credits that buy down our mortgage rate, and our investor partner, Raymond James Tax Credit Funds, to increase their equity investment so the deal still works. In addition, because both the Erickson and Fritz Buildings are contributing historic structures within a historic district, we are able to access federal Historic Tax Credits. It takes a lot of committed funders to bring a project like this together!

Design - IHI worked with two architects on this development. It was a little unconventional, but we wanted to involve both LRS Architects and ORANGEWALLStudios Architecture + Planning so LRS designed the Erickson and ORANGEWALL designed the Fritz Building. LRS worked with IHI on the Broadway Vantage Apartments and has a lot of experience with historic buildings. ORANGEWALL worked with IHI on the Modern Rich Apartments, which was a model for the Erickson/Fritz, and knew exactly what IHI wanted to see. IHI wanted to bring the expertise and skill of both teams to this project, so we expanded our design team to include two architects. You won't notice substantial changes to the exterior of either building because both facades are historic. But we made amazing changes inside the structures to create 62 apartments out of a nightclub and an empty building shell!

The Erickson and Fritz join in the middle of the block and share building systems. Both buildings were vacant and their interiors largely unfinished, which provided IHI a great opportunity to build "new" housing units with full seismic upgrades and all the amenities of modern construction while preserving the historic exteriors of these two buildings. IHI's development team and architects used a similar design strategy to the one we used at the Modern Rich Apartments - we punched existing light wells through to the ground floor and replaced an historic skylight to create four covered atriums. These atriums have dual purposes. First, they provide outdoor space for residents that bring additional light into the interior portions of the buildings and create access for first floor units. Second, they form concrete cores that run from foundation to roofline, seismically reinforcing the buildings. The atriums allowed us to maximize limited building space and create 62 studio and one-bedroom units.

Seismic Upgrades - Most visitors and residents won't notice the seismic reinforcement that went into the buildings, but making these unreinforced masonry buildings structurally safe was one of the most significant pieces of this project. With the guidance of our structural engineers, Froelich Engineers, we used concrete sheer walls as our primary seismic structure, like we did at the Modern Rich. This keeps the seismic strengthening on the interior of the buildings rather than on the exterior (as compared to X-braces, which are commonly used on building exteriors). This is important because we needed to preserve the historic appearance of the exterior to be eligible for historic tax credits. In addition to the concrete cores, we installed a continuous plywood diaphragm on the 2nd and 3rd floors and tied the floors and roof to the concrete core and the exterior walls in order to increase the buildings' sheer strength as part of our full seismic upgrade.

Construction - IHI involves its contractors early in the development process to tell us how much it will cost to build what is being designed, and also to suggest design changes that will result in a better structure and save money. The General Contractor for the Erickson/Fritz project was Silco Commercial Construction, who was also IHI's general contractor for the Modern Rich Building. IHI, our architects, and Silco started predevelopment work together in April 2013. Silco began demolition in June 2014 and completed the project in July, 2015. Silco is a great partner for historic rehabilitation work because they understand old buildings and have decades of hands-on experience that they bring to the complex task of restoring them to their glory.

Who Lives Here? - Many of the new apartments at the Erickson Fritz house working people who want to live near jobs and schools. With the influx of employers and educational institutions in Old Town, there is significant pent up demand for housing in the neighborhood. We also house many people with very low incomes, including formerly homeless veterans. And 10 of the units have no income limits at all. IHI's goal was to create a truly mixed-income development that contributes to the revitalization of Old Town and provides affordable housing options for people who want to live in downtown Portland. We did it!

The Final Word - On July 23, 2015 IHI celebrated the completion of its $15.9 million restoration of the historic Erickson Saloon and Fritz Hotel Buildings and the creation of 62 new apartment homes. To mark the occasion, the Erickson Fritz Apartments hosted a progressive party where guests enjoyed diverse culinary offerings from local Old Town restaurants while touring newly constructed apartments, each set up to showcase one of Old Town's coolest and most exciting establishments. Party-goers also experienced the unveiling of specially commissioned art installations that explore the legacy of these storied buildings.

Here are links to media coverage and photo galleries of the completed project:

And here are some links to other photo galleries and media coverage of the project in progress: