Samer Hanini of Hanini Group | Peoples Bank Building in Passaic | Preserving History
Courtesy of Hanini Group
Samer Hanini on Peoples Bank Building
The second guest on the American Building series is Samer Hanini. Samer is the founder and managing partner of the Hanini Group, a development company with an affiliated architecture firm, Brick Design, and a construction management firm, Hanini Construction. We are talking about the Peoples Bank Building, his recently completed 120,000-square-foot mixed-use building in downtown Passaic, New Jersey. This historic landmark was built in 1931. After standing empty for nearly 30 years, it was completely renovated to include both retail and office. For this project, Samer and his team served as developer and designer as well as construction manager.
“I don’t think we would be able to be who we are today without learning from our mistakes. There is no quick way around development. You can’t just wake up one day and say, ‘I want to develop.’ What we’ve learned in the past is what is making us today.”
Courtesy of Hanini Group
A Risky Leap into Development
Samer knew that he wanted to make a name for himself in real estate after graduating from NJIT in 1990, but with a limited budget and even less experience, buying property near New York city was going to be difficult. When a series of historic building shells in Newark New Jersey came up for auction, Samer jumped at the chance. The only problem was he would have to purchase the property without ever setting foot in the building. His brother, Thafer, and a friend scraped together the cash they needed for 10% down and made the purchase. 30 years later, he still points to these early days of trial and error as examples of how his company has worked against the odds to deliver high quality assets that transform the communities they inhabit.
Courtesy of Hanini Group
Courtesy of Hanini Group
Making the Numbers Work for Historic Rehabilitation
Working in cities throughout New Jersey that were once industrial hubs has allowed Hanini Group to build an expertise in historic rehabilitations. Samer explains that a critical element to his success has been to get creative about financing by using federal, state, and local tax incentives. The construction costs in New Jersey are similar to those of New York City, but the rental rates are almost a third of what you could get in the city. Cost is the primary reason so many historic buildings in New Jersey sit empty for decades. Taking full advantage of every tax incentive, grant, and government programs is the only way to get the balance sheet of a historical rehabilitation in that area to work, Sameer explains. There is no better example of Hanini Group’s creative financing than with The Peoples Bank Building in Passaic New Jersey.
Working Around the Challenges of a Historic Building
The 12-story Peoples Bank Building was constructed in the depths of the Great Depression. In subsequent years, it bore witness to Passaic’s rise as an industrial city. It was and still is the tallest building in the city and can be seen from miles away. Samer saw an opportunity to breathe new life into this historic landmark and the neighborhood surrounding it. After sitting empty for two decades, however, the building had its own challenges. Samer explains that there was ten feet of water in the basement when he purchased the building, because it is built on stream. Determining how to keep the historic integrity of the building while making it suitable for modern tenants was also a feat.
Courtesy of Hanini Group
A New Era of Development for Passaic
Five years later, residents of Passaic once again see the lights of their favorite local landmark shining through the day and night, and the historic clock on the front of the building is operational. Many believe this is essentially the beginning of a new era of development for Passaic. As the largest project in his portfolio, Samer is proud of the community-minded approach he took to the entire building process. Just like his first development in Newark, he now has another example that he can point in the future of just what his passionate team can accomplish with the right combination of clever financial maneuvering and respect for the unique past of every building.
Episode Timestamps
1:27 – Could you talk more about your very first project as a developer and why you decided to make that leap?
6:13 – You mentioned that historic redevelopment projects are a pretty hairy process as it is. What would you say are some of the skills that are necessary to succeed in that particular subset of redevelopment as opposed to new construction?
9:42 – What were your first impressions of the Peoples Bank Building when you went to visit?
13:39 – Could you talk about some of the damage and architectural issues that you needed to address because of the abandonment?
19:43 – What was the thought process that you went through in terms of understanding what you could get for the returns from a project like this and all the financing structures that occurred within it?
24:54 – Could you explain in particular the benefits of Urban Enterprise Zone (UEZ)? What were the requirements for you to pursue that program?
28:23 – There are historic tax credits (HTCs), as well as new market tax credits. Could you explain what both of them are and what their benefits are?
35:04 – Where do you think the line is drawn between incentives that are a necessity versus incentives that can work their way towards a windfall for a developer?
42:19 – Could you talk about how you divided responsibilities amongst the various team members at your company?
45:34 – Do you see a visible change in the physical environment by having the Peoples Bank Building be occupied as opposed to being empty?
51:24 – When you were starting out, did you have any particular role models or mentors that helped you build all the knowledge that you have now?
53:34 – Given your background in architecture, how “hands on and sleeves rolled up” are you in the design process?
About your host:
Atif Qadir is the Founder & CEO of Commonplace, a technology company making it easy for commercial real estate professionals to find and use the $100B of real estate incentives given out every year in the US.
His work has been covered by Technology Review, The Real Deal, Commercial Observer, and Propmodo. He’s also a frequent speaker on the future of buildings and cities on popular industry podcasts and at conferences, including this past year at the Commercial Observer National DEI Conference, Yale AREA Conference, Columbia Real Estate Symposium, Open Data Week NYC and Austin Design Week.
About Commonplace
Commonplace is a founding sponsor of American Building. It is a 100% minority-owned, real estate technology company founded in 2020 to make financing social impact development projects across the US easier. It is funded by venture capital investors Hometeam Ventures, Park West Asset Management, New York Ventures and Shadow Ventures.
About Michael Graves
The world-famous design firm Michael Graves is also a founding sponsor of American Building. Its namesake, the iconoclastic designer Michael Graves, FAIA was a fierce advocate for people-centric design. His work defines a generation of American architecture and includes the Portland Building, the Humana Building and the Denver Public Library. The 1st season of American Building was filmed live at The Warehouse, his historic home in Princeton, New Jersey:
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