PATIENCE. THAT'S ONE OF THE RARE virtues developers such as Ron Vergnolle of PHC Communities (formerly Pierce Homes of Carolina) in Greenville, S.C., use to their advantage. After identifying a neighborhood in need of a major overhaul on the outskirts of town, he began the methodical process of gently relocating current tenants and discovering the best model for the optimal use of the land. At the same time, the designer of the proposed condo project, dubbed Oakhurst, met with local residents and came up with a new form of stacked condominiums called Homeplex.
“We had a higher-end property next door,” says Vergnolle, “so we really started buying up these rundown properties because of that. Over about eight months, we purchased several houses. We purchased four houses quickly, and then three months later, we took down four duplexes. Five months later, we bought another house, and we were ready to go.”
But rather than simply tossing the tenants out on the street, Vergnolle took a slow approach, in keeping with his company's community-minded practice of building about 80 percent of its product in a price range that's affordable for the workforce—firefighters, teachers, and the like.
“We fixed the existing homes up to a livable level,” he recalls, “then left the tenants in there for several months as we worked with the city to assist in finding them new homes. This was a very depressed area. Many of them were not paying rent at all. Fortunately, Greenville has a significant relocation program in place.”
Listening Skills That kind of soft touch not only serves Vergnolle's reputation well but also helps him breeze through the permitting and zoning process. Both the city and the neighbors were grateful to have him go to work on this part of town.
“I don't think we had a single NIMBY issue on this project,” he says. “The neighbors were overjoyed to have us come in and increase their property values.” In addition, Vergnolle says the mayor's office “was very cooperative on setbacks and zoning, especially because the design is in keeping with the old neighborhoods.”
But the other choice that disarmed potential criticism was Vergnolle's willingness to not just enter a dialogue with existing neighbors—almost any developer can dance around a charrette—but to actually take suggestions and comments seriously and respond to them with the site layout and the unit designs.
“We put a lot of time into planning,” he says. But, “we're not committed to those plans ... we'll sit down and take comments and change plans right away, even allowing homeowner associations to change the colors of siding on the homes or move the car wash somewhere else. We're flexible.”
The Right Look The key to this development, of course, lies in the creative Homeplex design, which resulted primarily from the work of designer Pat Dilger of Overstreet Studios, who handled both the individual floor plans and master planning as part of a joint venture with Johnston Design Group. Both companies have offices in Greenville.
“One of the reasons we took our time getting this project under way was that there was no product in the book we could use to redevelop it,” says Vergnolle. “And the property wasn't cheap to buy, so we needed about 15 units per acre to make our margins. As a result, we came up with Homeplex, which is a stacked condominium that looks like an older home. This way, we have 22 condos that look like 11 old homes, in keeping with a 1940s neighborhood.”
But rather than whittle away amenities and use cheaper materials, the Homeplex designs include many quality features and products such as 9-foot ceilings, prewiring with Category-5 wiring, solid core Masonite doors, and James Hardie fiber-cement siding. You also see exposed rafter tails, large porches, and traditional casings on window exteriors.
In addition, site planners gave careful thought to tree preservation. The old oaks (thus the name Oakhurst) on the property were thoughtfully integrated into the design and give the community a sense of place.
“These homes are all energy rated,” Vergnolle adds. “We want to be as good as anything you can buy in the suburbs. The way we do it is with [additional] density. We can offset costs and make the same profit margins as traditional single-family builders.”
He adds that the company broke ground on Oakhurst in July 2003 and delivered all of the units by February 2004, with staggered closings.
Economic Value What's especially encouraging about Vergnolle's humanistic approach to the business is that he manages to continue to grow the firm. PHC Communities was recently ranked by the South Carolina Chamber of Commerce as the sixth fastest-growing company in the state. Case in point: In a single 45-minute auction, all 22 units of the Oakhurst development sold at prices averaging around $105,000, with two units selling for about $150,000.
“We've been doing multifamily since 1999,” Vergnolle says, “but low interest rates have really enhanced the condo market. I get a lot of apartment renters who want to convert their rent to a mortgage and buy a condo.
“The Homeplex model is one that is very repeatable in an urban environment,” adds Vergnolle. “We just put under contract three more properties next door that will integrate with this one. And the city wants us to keep doing more.
“We're really focused on quality, not volume. We're more of a developer than a builder, and we delivered 125 units this year. We'd like to level off about there.”