This story originally appeared in the November 2015 edition of Georgia's Cities.
When Monroe attorney Paul Rosenthal heard the turn-of-the-century cotton mill in the city, which shuttered in 2006, would be purchased and demolished for materials, he jumped into action and purchased the 250,000 square foot, 10-plus-acre property in 2008.
“The purchaser was going to demolish it brick by brick, timber by timber,” he recalled. “The main reason why I purchased the mill was to keep that from happening. Our plan was to buy, stabilize, rehabilitate, restore and put it back to use. We wanted it to be restored for the community to use and not be torn down.”
A near 15-year resident of Monroe and the city attorney, Rosenthal had long dabbled in real estate and historic preservation.
“The mill is the biggest project I have ever taken on,” he said. “When I bought it I didn’t have a complete picture of what I wanted to do, but I had an idea how I wanted to restore, redevelop and repurpose it.”
Rosenthal also didn’t know that within a few months of purchasing the mill, the recession would hit, tightening financial resources and sending the world into economic decline.
“We started the rehabilitation and repurposing efforts right in the middle of the crash,” he said. “We got our teeth knocked in for a while. The timing was very rough for us. The market crashed 90 to 120 days after we bought the mill.”
Rosenthal and partners held on and started to see the light at the end of the tunnel.
“We started renting it out in 2010 and we have been bringing more parts of it online as we go,” he said. Today the first floor of the property is 97 percent occupied.
Rosenthal initially envisioned the mill’s engine room as special events space. Today the Engine Room hosts weddings and special events throughout the year and serves as one of Monroe Cotton Mill’s successful anchors. Two antique malls also anchor the property and other tenants include a fitness studio, a church and the Walton Tribune newspaper, among others.
“We find that the mixed use of retail, service and special events use is perfect for the community and the property,” Rosenthal explained. “We hope to soon have some sort of restaurant on the property. We eventually want to add loft and residential units on the second floor where there is 70,000-square-feet of space and have a full circle of mixed use.” Rosenthal anticipates improving the second floor and adding 40-60 studio to three bedroom units over the next five years.
While cash flow is good on the property, the project is not yet profitable. Rosenthal is taking the long view.
“We are more than $4 million in,” he said. “We are teetering on the brink of getting back to break even of market value. It is a long term project but I think it is a great project. The average investor would not take on our project. We didn’t do this just for the return. We did it for the community and to protect the land. We dumped a whole lot more money into it than we ever thought we would, but we are proud of the project.”
Rosenthal was able to take advantage of historic rehabilitation tax credits from the Georgia Historic Preservation Division and the National Park Service; the project however, didn’t qualify for much other special financing because at the time of purchase and redevelopment, it was not in the Downtown Development Authority’s boundaries.
“One thing that our experience really did show us is that the world of grants and creative mechanisms for wholly private projects is severely limited,” he said. “If you do a public/private partnership and bring the city or DDA on board, the world of available tools greatly expands. That’s the one piece of advice I would give to other historic developers is do it as a public private partnership.”
Rosenthal points out that the city has been as supportive as it can be of the project, putting the property into the DDA boundaries at his request and participating in cross-promotional activities.
“We hold several community events like Movies at the Mill and Food Truck Fridays with lunch and dinner on the front lawn,” he said, adding, “our redevelopment of the mill has been a catalyst—a spark to the revitalization of the downtown core, particularly in the mill district. It is encouraging younger families and the creative class to come back to the downtown core.”
Monroe Economic Development Specialist Sadie Krawczyk called Rosenthal a pioneer of Monroe downtown development.
“After seeing the economic catalyst that a revised mill could be, the city expanded their Downtown Development Authority boundaries to include the Mill District and developed a Mill District master plan for the area, which has guided private and public investment since that time,” Krawczyk explained. “Since the Monroe Cotton Mill’s redevelopment, we have seen housing revitalization around the mill, numerous new businesses locating in and nearby the property, and the establishment of Monroe as a wedding destination. I believe Paul’s example has also encouraged others to take on large redevelopment projects in downtown. We are grateful for his commitment to a vision even before others could see it as possible.”