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History of the Lowney Chocolate Factory

The Lowney Chocolate Factory, located in Mansfield, Bristol County, Massachusettsnow owned by the Archer Daniels Midland Company (ADM)has been making chocolate and chocolate-based products since 1903, when chocolate manufacturer Walter Lowney moved the Lowney Chocolate Company from Boston to Mansfield, Massachusetts.

The Lowney Chocolate Company, Mansfield, MA (c.1903)

Lowney Chocolates passed through a series of owners and in 1997 was bought by ADM Cocoa, a division of agribusiness giant Archer Daniels Midland Co. Today, ADM Cocoa is among the worlds largest cocoa and chocolate manufacturers and grinds about 15 percent of the worlds cocoa crops. The Archer Daniels Midland Company (ADM) produces fine chocolates in Belgium, Germany, England, Canada and the United States, including, until 2009, Mansfield, Massachusetts. Lowney was attracted to Mansfield by inexpensive (compared to Boston) available land and proximity to the railroad. Mr. Lowney became a legendary local commercial and civic figure in Mansfield, donating land to worthy use, underwriting Mansfields water and sewer system and building the Tavern Hotela popular resort and business hotel and restaurant of the early twentieth century. II. Mansfield, Massachusetts

Mansfield is a town in Bristol County, Massachusetts, with a population of approximately 25,000. The town is in the south-southwest suburbs of Boston and is also close to Providence, Rhode Island. Mansfield's geographic location is 28 miles south of Boston, 14 miles west of Brockton, and 19 miles north of Providence, Rhode Island. It is bordered by Foxborough and Sharon to the north, Easton to the east, Norton to the south, and Plainville to the west. Mansfield was first settled in 1658 and was officially incorporated in 1775. It was named for William Murray, 1st Earl of Mansfield, a procolonial member of the House of Lords.
Mansfield Center Map (c.1875)

Today, the town is governed by an open town meeting, which in turn is led by a board of selectmen and town manager. Mansfield has its own school department consisting of five schools, governed by a superintendent of schools (whose office is located directly adjacent to the town hall) and a school committee. Mansfield is known for their outstanding high school sports such as 1.

football, soccer, baseball, basketball, lacrosse, track and field (Men), and Women's Indoor and Outdoor Track and Field teams have won multiple league, division, and all-state titles. III. The Mansfield Chocolate Works Development Plan

Mansfield Chocolate Works LLC (Developer) seeks to purchase the ADM Cocoa Factory, located at 150 Oakland Street in Mansfield, Massachusetts for the purpose of developing the property into (approximately) one hundred and twenty (120) market-rate loft apartments, commercial and retail space and low-impact industrial use Purchase price for buildings and the land (14.7+ acres) is under currently in negotiation between Developer and Archer Daniels Midland Company. The Developer will arrange for full project financing and provide design, construction, marketing and management services to develop the project. Full project costs (acquisition, hard, soft and The Mansfield Chocolate Works: Home Sweet Home financing) are approximately $36MM. The following financial components will constitute full project financing for the Mansfield Chocolate Works: investor/developer equity; FHA/HUD multi-family Section 220 construction and permanent (loan) financing; Federal and MA State Historic Tax Credits, and Transit-oriented development financial incentives as available to the project. The financing and pre-development activities will require at least nine months (9) to complete. Pre-development activities: 1) Obtain FHA/HUD Section 220 market multi-family/commercial financing of approximately $21MM, fully assumable, non-recourse loan. 2) Obtain Federal and MA State Historic Tax Credits worth approximately $10.7MM. 3) Coordinate all permitting and approvals, financing, design, economic incentives, construction, marketing and management activities. 4) Obtain other economic incentives available to project.

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II. Pre-Development Budget

Pre-Development Budget/Taunton Mills/12 Month Budget Cost Notes
$150,000 Appraisal, Market Study, Phase I Construction Cost Review, and Plans and Specs Review. Based on cost to prepare Part I and Part II MHC application and placing property as a contributing property in an historic district. Pre-Development marketing and planning. Overall oversight and coordination/ Development/Approvals and Permitting. Architectural design and civil, structural and environmental engineering for Section 220, HTC and marketing. Offer, P&S, approvals. HTCs, HDIP, etc. Love Funding/HUD Section 220

Item

HUD Section 220 Third Party Reports & Processing:

Historic Consultant

$40,000

Marketing Planning/Website Development & Operations

$30,000 $100,000

Design & Engineering Legal Accounting Acquisition; Pre-Construction and Contingency

$150,000 $50,000 $35,000 $425,000

TOTAL PRE-DEVELOPMENT BUDGET

$1,000,000

III. Development Team Russell G. Barnaby is a real estate developer with more than 25 years of progressive experience in real estate acquisition and development working for innovative companies such as Boston Capital Ventures, Conservation Tourism, Ltd., Grabowski and Poort Corre Corre Bay Resort, St. Eustatius, W.I. N.V. and State Financial Services. As an entrepreneur, Mr. Barnaby specialized in turn around and start-up ventures such as Wiltshire Holdings LLC, Simplicity International, Ltd. And Nature Capital Ltd., Mr. Barnaby has extensive experience in financial oversight and reporting; fundraising equity and debt capital for development and corporate expansion; investor relations; operations and strategic planning. He has achieved success at the highest levels of management and ownership in competitive enterprises. Barry Ganek, AIA, AIA LEED AP and GAI is the Principal of Ganek Architects of Carlisle, Massachusetts (http://www.ganekarchitects.com). Mr. Ganek has successfully provided the highest level of architectural design and service on a diversity of projects and locations for the past twenty-five (25) years. His cliental includes corporations, private developers, religious congregations and individuals. Mr. Ganek has a depth of experience and success in historic preservation and adaptive re-use projects. He has designed and managed for educational organizations, residential developers, health care entities and private institutional clients. The GAI team continues to solve the challenges of master plans, feasibility studies, renovations, additions, adaptive reuse and new construction projects.

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At Ganek Architects, Inc., great and enduring design is a passion. The firm takes pride in the ability to combine project requirements with creative imagination that result in successful projects. We design functional, inviting and beautiful spaces that inspire each and every person that enters them. Mr. Ganek strongly believes that real world practicality and thoughtful innovation go hand in hand. Our vision is matched only by our clients aspirations. Great design it is what we bring to our projects and present to our clients every day. Bob Palmer is an inspired media and Abbot Mill, Westford, Massachusetts marketing professional with twenty years of real estate development experience, real estate investment, development, and design and asset management. Mr. Palmer is a property owner in several communities, including Taunton, MA. He brings understanding of permitting and approvals processes in the local community. Tocci Building Companies, headquartered in Woburn, MA, has been constructing buildings throughout the Northeast for nearly a century. Our experience informs our three core offerings for clients within the built environment. Our innovative process delivers value for clients, regardless of service or delivery method. Since starting 1922, weve learned a thing or two about construction technology, delivery methods, and the expectations of other key stakeholders owners, architects, and subcontractors. Regardless of delivery method, Tocci consistently delivers projects using Virtual Construction (VDC). Design and
Capital Cove, Johnson & Wales University, Providence, RI

In 2008, Tocci built the first IPD project in the Northeast; since then, weve developed more IPD expertise and experience than any builder in the Northeast. IPD is a new contract form and design/construction process that enables all parties to work together in the spirit of cooperation, collaboration and mutual respect for the benefit of the project. Opportunities to succeed are directly tied to the performance of other project participants through shared risk and reward. A key feature of IPD is early and ongoing collaboration by everyone on the extended design team both in person and by using the digital model. Although members work together collaboratively, each is an independent contractor, individually responsible for directing and managing its own work within its area of responsibility and expertise. HallKeen Real Estate Services and Investment is a diversified real estate company based in Norwood, Massachusetts. Our prime focus is the acquisition, development and management of affordable, conventional, and mixed income housing; we also provide a broad range of commercial management services to our clients and the properties we own. HallKeens management skills are at the core of our 4.

business. In early 1991 three leading Boston area real estate professionals, Mr. John Hall, the late Mr. Robert Kuehn and Mr. Denison Hall formed a joint venture to acquire McNeil Management Inc., a company with over 20 years of experience managing affordable housing. HallKeen built upon the McNeil base in the 1990s and has now established a strong reputation for effectively managing and responsibly owning affordable housing and commercial real estate.
Ames Privilege, Chicopee, Massachusetts

Leslie Donovan has over 25 years of experience in historic preservation planning, giving her a thorough knowledge of all aspects of preservation consulting including certified rehabilitation, environmental review, preservation planning, historical documentation and research. As the Project Director for the National Trust's Mill Works Project, Leslie compiled case studies, wrote The Mill Works Handbook (1983) and organized The Mill Works conference. Upon completion of the project, Leslie continued to focus on the rehabilitation and reuse of historic structures working with two real estate firms. As president of Bay State/Bostonian Group, she evaluated real estate investment and development opportunities and consulted on historic rehabilitation projects. Attorney Thomas Percy, founder of Percy Law Group, is the founding member of the Percy Law Group, with offices in Taunton, New Bedford, Plymouth, Stoughton, Plainville, Milton and Fall River, Massachusetts and in Cranston, Rhode Island. He established the practice with an emphasis on providing the highest quality of legal services to individuals and companies, always with a focus on superior service and results. Mr. Percy has always believed that effective lawyers achieve the best possible result for their individual or business clients, and do so in a responsive manner for a fair and reasonable fee. Mr. Percy was born in Braintree, Massachusetts. He is married to Donna Sotomayor Percy, has two children Elizabeth and John, and resides in Rehoboth, Massachusetts. He is a cum laude graduate of Boston University and The Washington College of Law and he has published several works. His practice focuses on real estate and business matters of all varieties and levels of complexity. He regularly lectures on various matters pertaining to his practice areas. VI. Financing Components The sources of project funding include equity, construction loan (HUD Section 220), Federal and MA Historic Tax Credits, and other economic incentive as available. HUD 220 Multi-Family Loans Summary Mortgage Insurance for Rental Housing for Urban Renewal and Concentrated Development Areas: Section 220 insures loans for multifamily housing/commercial projects in urban renewal areas, code 5.
Sears Building, Boston, Massachusetts

enforcement areas, and other areas where local governments have undertaken designated revitalization activities. Purpose Section 220 insures lenders against loss on mortgage defaults. Section 220 provides good quality rental housing in urban areas that have been targeted for overall revitalization. Section 220 insures mortgages on new or rehabilitated housing located in designated urban renewal areas, and in areas with concentrated programs of code enforcement, and neighborhood development. Eligible Activities Insured mortgages may be used to finance construction or rehabilitation of detached, semi-detached, row, walk-up, or elevator type rental housing or to finance the purchase of properties which have been rehabilitated by a local public agency. Properties must consist of two or more units and must be located in an urban renewal area, in an urban development project, code enforcement program area, urban area receiving rehabilitation assistance as a result of natural disaster, or area where concentrated housing, physical development, or public service activities are being carried out in a coordinated manner.

Lowney Chocolate Works, Mansfield, Massachusetts

The program has statutory mortgage limits, which may vary according to the size of the unit, the type of structure, and the location of the project. There are also loan-to replacement cost and debt service limitations. The maximum amount of the mortgage loan may not exceed 90 percent of the estimated replacement cost for new construction. For substantial rehabilitation projects, the maximum mortgage amount is 90 percent of the estimated cost of repair and rehabilitation and the estimated value of the property before the repair and rehabilitation project. The maximum mortgage term is 40 years, or not in excess of three-fourths of the remaining economic life of the project, whichever is less. Contractors for new construction or substantial rehabilitation projects must comply with prevailing wage standards under the Davis-Bacon Act. Eligible Borrowers Eligible mortgagors include private profit motivated entities, public bodies, and others who meet HUD requirements for mortgagors. Eligible Customers All families are eligible to occupy a dwelling in a structure where the mortgage is insured under the program, subject to normal tenant selection.

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Many types of mortgagors can apply for this insurance, including builder-sellers, investor-sponsors, and general mortgagors. The only restrictions on the type of families that are eligible to live in the resulting buildings are those of normal tenant selection. There are no income limits, and no provision that mandates Section 8 housing for the poor. Projects can be Interior, ADM Cocoa Factory, Mansfield, Massachusetts specifically designed for the elderly or the disabled, but dont have to be. Loan applicants generally work with a Multifamily Accelerated Processing (MAP) approved lender. The applicant and lender will create and submit the required documents in the pre-application stage. After the review by HUD, the borrower will be issued a letter of invitation if the presentation passes muster. It should be noted that the word Accelerated does not mean that this process will be fast. In fact, it will take many months. However, on the plus side, Section 220 loans are fixed, amortizing over 40 years, are non-recourse and assumable (sellable). These benefits can make it worthwhile to pursue such a program. After receiving the go-ahead from HUD, the lender then submits the Firm Commitment application which includes a full underwriting package. The regional HUD Multifamily Hub or Program Center will then consider the market analysis, zoning, architectural merits, and capabilities of the borrowers team and availability of community resources. If all these pieces suggest an acceptable level of risk, HUD will then issue a commitment to the lender for mortgage insurance. Historic Tax Credits The Federal Historical Preservation Tax Incentive Programthe twenty percent (20%) federal tax credit and the up to 20% Massachusetts state tax creditwas started in 1976. The National Park Service (NPS) has administered the program in partnership with the Internal Revenue Service (IRS) and with State Historic Preservation Offices (SHPOs). To date tens of thousands of rehabilitation projects have been approved, representing billions of dollars in private investment. One of the federal governments most successful and cost-effective community revitalization programs, the Preservation Tax Incentives reward private investment in rehabilitating historic properties such as offices, rental housing, and retail stores. Abandoned or under-used schools, warehouses, factories, churches, retail stores, apartments, hotels, houses, and offices in many cities have been restored to life in a manner that retains their historic character. The Preservation Tax Incentives have also helped to create moderate and low-income housing in historic buildings.
ADM Cocoa Factoryat Night

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Federal historic preservation tax incentives are available for any qualified project that the Secretary of the Interior designates as a certified rehabilitation of a certified historic structure. A certified historic structure is defined as a building that is listed in the National Register of Historic Places, either individually or as a contributing building in a National Register historic district, or as a contributing building within a local historic district that has been certified by the Department of the Interior. Buildings in historic districts must be certified or approved by NPS as contributing to the district as part of the Historic Preservation Certification Application. Only certified historic structures qualify for the credits. The structure must be a buildingnot a bridge, ship, or a railroad car, for example. The National Park Service must approve, or certify all rehabilitation projects seeking the 20% tax credit. A certified rehabilitation is a rehabilitation of a certified historic structure that is approved by the NPS as being consistent with the historic character of the property and, where applicable, the district in which it is located. Historic buildings are physical records of past inhabitants. People make changes to buildings over time to fit new uses and needs. The historic character results from the combination of the character-defining features that have established the appearance of the building as it has evolved over time. Character-defining aspects of the building that need to be identified and evaluated may include form and detailing of exterior materials, such as masonry, wood, and metal; exterior features such as roofs, porches, and windows; materials, such as plaster and wood; finished and unfinished interior spaces; and interior features, such as moldings and stairways, room configuration, and spatial relationships, as well as structural systems.

The Tavern Hotel, Mansfield, Massachusetts

In a project such as the development of the 200,000 sq. ft. (after out buildings are removed) Mansfield Chocolate Factory in Mansfield, Massachusetts, it is assumed that total projects costsacquisition, hard construction costs, permitting and approvals, F,F&E and soft coststo be approximately $150/square foot or about $32MM. Federal tax credits (20% of qualified restoration expenses) and maximum Massachusetts state tax credits (up to 20% of qualified restoration expenses) should yield approximately $9.0 - $10MM of net proceeds to ownership. The Mansfield Chocolate Works and the National Register of Historic Places It has yet to be determined if The Mansfield Chocolate Works (i.e. the Lowney Chocolate Works) is listed in the National Register of Historic Places. Further investigation with qualified Historic Consultant will clarify status. If property is listed, developer will pursue state and federal tax credits. If property is not listed, developer will apply for listing and, subsequently, application for state and federal tax credits

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Federal Historic Rehabilitation Tax Credits The federal historic rehabilitation tax credits are available for income-producing buildings which are listed in the National Register of Historic Places and which are substantially rehabilitated according to the Secretary of the Interiors Standards for Rehabilitation. Under this program, 20 percent of the total costs of rehabilitation are returned to the owner in the form of a dollar-per-dollar credit on federal income tax credits. To obtain the federal and state tax credits for the project, a three-part Historic Preservation Certification Application (HPCA), together with project plans and photographs, is submitted to the Massachusetts Historic Commission (MHC) and the National Park Service (NPS). The MHC has a review and comment role in the process, but the NPS has the final decision making authority regarding certification of the completed rehabilitation. Successful certification of the completed project, and obtaining the subsequent tax benefits, is dependent upon rehabilitation work that meets the Secretary of the Interiors Standards for Rehabilitation. Massachusetts Historic Rehabilitation Tax Credit Program The Massachusetts Historic Rehabilitation Tax Credit (MAHRTC) is available on a competitive basis for income-producing buildings which are determined a qualified historic structure by the MHC and which are substantially rehabilitated and determined a certified rehabilitation by the MHC. Under the Massachusetts tax credit program, up to 20% of the total qualified rehabilitation expenditures is returned to the owner in the form of a dollar-per-dollar credit on state income taxes. The three-part MAHRTC application, together with the additional supporting information required for the competitive process and photographic documentation, is submitted to the MHC to qualify for consideration in application rounds. Successful certification of the completed project by the MHC and securing the subsequent tax benefits is dependent upon rehabilitation work that meets the Secretary of the Interiors Standards for Rehabilitation.

Mansfield Chocolate Works at Sunrise

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