The Shuman Development Group will get $8.25 million in federal new markets tax credits to convert the former Abraham Lincoln hotel into a mixed-used apartment and retail building called Lincoln Towers.
Built in 1930, the historic, 18-story hotel and parking garage in downtown Reading has been undergoing an $11 million renovation since it was closed in November.
The hotel’s restaurant, bar and 10,000-square-foot Presidential Ballroom have continued to remain to open.
The building, which has commanding views of the city, is being renovated into 98 market-rate one- and two-bedroom apartments, 10 retail spaces and an adjacent 310-space parking garage.
Alan Shuman, president of the Shuman Development Group, bought the Abraham Lincoln for $5.5 million in 2014.
Community First Funding, a nonprofit economic development group, awarded Shuman a new markets tax credit, which is a $3 billion U.S. Treasury Department program that awards private investors tax incentives for redevelopment projects in low-income areas.
New market tax credits provide about 25 percent equity into the project over seven years.
“It helps the developers since they don’t have to borrow as much money to make the project economically work,” said Daniel Betancourt, president and CEO of Community First Funding, which is based in Lancaster.
It is the third new markets tax credit awarded to Shuman, which received $6.75 million for his renovation of the Big Mill Apartments in 2014 and $6 million for the former Exide building in 2015, both in Reading.
Betancourt said this morning it awarded the Lincoln Towers project the tax credit “because it preserves an important property in downtown Reading and it makes it economically viable.”
Betancourt said Lincoln Towers will contribute a sense of vibrancy to the neighborhood because people will be living there, shopping and walking around at night, which provide a sense of security.
Betancourt said Lincoln Towers, at Fifth and Washington streets, ties into the development on Front Street, which is two blocks away. The area is home to the GoggleWorks, an artists’ incubator; a movie theater; and a Reading Area Community College branch.
The Community First Fund has awarded $40 million of $45 million in federal funding it received in November to stimulate development in low-income areas in central and eastern Pennsylvania.
Projects must be in communities that have at least a 20 percent poverty rate in order to qualify. Reading has a poverty rate of about 30 percent to 40 percent, Betancourt said.
30 North Fourth St. LP, an affiliate of Ashley Development Corp. of Bethlehem, recently received a $5 million new markets tax credit for its renovation of the former Express-Times building into the Easton Arts Academy Elementary Charter School in Easton.
New market tax credits provide about 25 percent equity into the project over seven years.
Betancourt said Shuman has committed to set aside 20 percent of the units at Lincoln Towers for people making 80 percent of the median income in Reading, which is about $40,000 for a family of four.
