Thirty months, eight phases, 703 units, 3,000 residents, 79 acres, and $36 million. That's what is involved in what will be the nation's largest green renovation of an affordable housing development once it's complete in April 2013.

With a companywide green mission in hand, The Wallick Cos., a Columbus, Ohio-based owner, developer, and manager of affordable housing, is transforming the 893 units at Fay Apartments in Cincinnati into 703 energy-efficient and modernized units at the renamed Villages at Roll Hill.

Wallick CEO Tom Feusse says the combination of the Department of Housing and Urban Development (HUD) and state and local agencies pushing green initiatives, the cost savings for the owner in the long term, and the company's ownership's views on green are coming together as the philosophy for the company.

“While our industry's regulators are pushing green, it's the conviction of our owners to do what we can to benefit our environment, regardless of our business activities, that really drives us.

Fortunately we're in a business where our choices can have a significant impact,” Feusse says.

Wallick manages about 180 communities, half as general partner, and many of the projects in the company's portfolio are 25 to 50 years old and in need of capital investment.

“A lot of the properties are in the 30-year range, and we've been able to maintain them over that time,” says Phil Brown, senior vice president of Wallick-Hendy Properties, the Wallick division doing the renovations. “This is our one shot to get new 30-year uses out of these properties."

The company has a master green plan to rehab the portfolio over the next 10 years and aims to do about 10 rehabs a year. About 500 to 600 units have had green renovations completed, says Feusse, and another 1,000 units are under construction at press time with more in the pipeline.

In the projects that have been completed, Wallick has seen significant savings from the addition of green products, like low-flow toilets and high-efficiency furnaces.

And these savings are helping the company to lower operating costs, which is coming at a critical time, says Dave Hendy, managing director of Wallick- Hendy Development. With increased pressure on rents and incomes to operate these properties going forward, it's important they don't run into cash-flow problems, he adds.

The former Fay Apartments

The average size for a project in Wallick's portfolio is 70 units, so the renovation of the former Fay Apartments stands out for the developer.

The Fay Apartments was originally built in the early 1960s as 1,020 units of market-rate housing. But the original developer got into trouble and defaulted in the late 1960s. Built under one of the old Federal Housing Administration (FHA) insurance programs, HUD took the property back and operated it through a series of managers for many years.

With its location near the University of Cincinnati and area hospitals, the property remained market rate, with football players, nurses, graduate students, and other professionals as residents.

In 1980, HUD sold the property to the city of Cincinnati, which at the time had the desire to convert it to a nonprofit cooperative to provide homeownership opportunities for low- and moderateincome residents. When that didn't pan out, the city put out an RFP for someone to buy and renovate the property. Stern- Hendy, which later merged with The Wallick Cos., acquired the project in 1985 and did a moderate renovation at that time.

Hendy says the property was doing fine in the early years of the acquisition, but about five years ago, the company knew it had to do a major renovation to preserve it.

Originally the plan involved low-income housing tax credits (LIHTCs) and some credit-enhanced FHA financing, but in the middle of the economic turmoil about three years ago, the project lost its LIHTC investor, and the financing plan had to go back to square one.

“Right in the middle of Fay when it all blew up, I had a concern we had a property that was dying. Although we're not doing everything we had wanted, we're dramatically upgrading the property in appearance and functionality,” says Hendy. “I believe we'll be giving people a very nice place to live."

The team worked out another plan and received support from two of the project's previous owners. Using HUD's Mark-to-Market program, they were able to close the deal in late September, with a $31.6 million loan from HUD's Office of Affordable Housing Preservation, a $3.2 million loan from the city of Cincinnati, and $1.5 million in equity from Fay, L.P. The renovations are estimated at $37,000 per unit. Mark-to-Market is a federal program that reduces rents to market levels on multifamily properties with expiring housing subsidies and restructures existing debt to levels supportable by these rents.

“It's a very significant step forward in HUD's initiative to not just improve the energy efficiency of the property, but the quality of life of the residents,” says Harry West, head of HUD's Office of Affordable Housing Preservation in Chicago.

A new life

The Villages at Roll Hill will see many changes over the course of the 30-month renovation, which started in October.

Residents will be relocated in eight phases, with each phase taking three to four months. The first phase was just being completed at press time.

“There are a number of positive aspects to this development. The first is that it preserves a substantial portion of our affordable housing stock here within the city,” says Michael Cervay, director of community development for the city of Cincinnati. “Not only are we preserving what we already have, but we're upgrading it and also lowering density, which has often been a criticism with developments like this."

Unit density is dropping by 190 units, but this is allowing the developer to add more three-bedroom units, which is reflective of the market, adds Cervay. The new unit breakdown when complete will be 52 one-bedroom units; 504 twobedroom units; and 147 three-bedroom units, which is an increase of 25 percent.

Instead of a lot of flashy new green technology, the developer is sticking with the tried-and-true green elements that the team knows will work.

“We find the biggest payback on green is in the plumbing because we have experienced such large reductions on water and sewer bills [on previous green rehabs,]" Hendy says.

The interiors and exteriors will see improvements, including kitchen and bathroom modernizations. Green elements include energy-efficient windows and doors; environmentally friendly carpet and paint; low-flow toilets, showerheads, and faucets in the bathrooms and the kitchens; LED lightbulbs in the light fixtures; and new HVAC systems, which will be a major change for residents during the humid summers since the property previously did not have air conditioning. The exteriors also will get facelifts, with new siding and roof replacements and the addition of new front porches.

The developer also has created a green and operating maintenance plan for residents and the maintenance staff.

Brown says the residents and on-site staff will be educated on why the green improvements have been made, how they work, and how maintaining them will aid their health and budgets. “We're taking a holistic approach so everyone involved helps to maintain the property as green over time,” he adds.

Wallick is seeking Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council for the Villages at Roll Hill, which adds another incentive for the development.

“It really shows a LEED development is marketable in this region, and so City Council has passed an ordinance to create a tax abatement program for both commercial and residential developments that are LEED-certified that hasn't otherwise been available,” says Cervay. “By this project moving forward, it demonstrates project feasibility."

In addition to the green elements, 17 buildings will be demolished to add more green space, landscaping, trees, and playgrounds.

Other improvements include upgrades to improve public safety, according to Cervay, including the addition of cameras, increased on-site security staff, perimeter fencing, window guards on firstfloor windows, exterior lighting, steel-entry doors that swing out rather than in, and a license plate reader at the entryway that will be connected to the district police station.

“Residents are very enthusiastic and supportive about the improvements coming into their community. There's been nothing but positive feedback," says Cervay.

Purchasing power Aiding the renovation of the Villages at Roll Hill and the rest of the portfolio is another large green endeavor Wallick is undertaking. In 2010, the company created its Evergreen Materials program— a formal process for determining product standards and green buying requirements.

Instead of letting construction and maintenance teams buy different products and materials, the company brought in a full-time purchasing staff about a year ago to leverage buying power and control specifications—all environmentally friendly—across the portfolio.

Materials sourced through the Evergreen Materials program include: PLUMBING Water-saving toilets and faucets and Energy Star-qualified water heaters; HVAC High-efficiency, Energy Starqualified furnaces and air conditioners; FLOORING Carpet and vinyl flooring made from recycled/recyclable materials with low VOC emissions; PAINT Low VOC emitting; CABINETS AND COUNTERTOPS Manufactured without added formaldehyde; APPLIANCES Old appliances are diverted from landfills and replaced with Energy Star models; LIGHTING Energy Star fixtures; WINDOWS Energy Star qualified; DOORS Wood doors made without added formaldehyde, using recycled content and Energy Star qualified; and SHINGLES Contain recycled materials and manufacturer has recycling program for old shingles that are removed.

“It's helping us with all of the projects with pricing, but also in terms of lead time from starting to closing construction," Feusse says.

The time it used to take to make a slew of decisions at closing time, from countertop and cabinet choices to carpet and paint colors, is now gone. “That's saving us money because time costs money," Feusse says.

He also adds the program will make maintaining inventory and staff training more efficient.

Wallick's commitment to green is not just seen in its affordable housing developments, but also at headquarters. The company recycles and uses electronic filing instead of printing when possible, and all new company cars are hybrids.

“Even what we've learned [in green building] is an ever-evolving situation," says Brown. “Once you can get your arms around green, you can see the benefits."


The Wallick Cos. is already seeing savings with two of its renovations that were completed in fall 2009—Fostoria Townhomes, a 60-unit family project in Fostoria, Ohio, and St. Aloysius, a 48-unit seniors project in Covington, Ky. By adding low-flush toilets and low-flow faucets in the kitchens and the bathrooms, Fostoria has seen more than $15,000 in water and sewer savings, and St. Aloysius has seen a 30 percent reduction in water and sewer costs.

The renovation of Ronez Manor, a 179-unit townhome project in Springfield, Ohio, included upgrading the HVAC systems, installing new plumbing fixtures, adding more insulation, and placing monitors to track temperature, humidity and water, and gas and electric usage. The $1.4 million renovation was completed at the end of 2010.

The $1.2 million, 66-unit Walter G. Sellers project in Xenia, Ohio, is utilizing funding from the Department of Housing and Urban Development's Green Retrofit Program. In addition to new plumbing fixtures, more insulation, and tracking monitors, it also will include new energy-efficient windows, doors, and light fixtures in all units and the common areas when it is completed this spring.

Also set for completion this spring is the 60-unit seniors project Almond Village in Dayton, Ohio. This $3.1 million project, which utilizes low-income housing tax credits, Tax Credit Exchange Program funds, and Ohio HOME funds, will include the removal of all baseboard heaters and through-wall air conditioners to upgrade to a high-efficiency central HVAC system and Energy Star heat pump; the upgrading of all water heaters to high-efficiency models; Energy Star-rated appliances, including dishwashers, refrigerators, exhaust fans, and ceiling fans; Energy Star lighting; Energy Star-rated windows and exterior doors; and low-flow fixtures in the bathrooms and the kitchens.