Pumping new life into classic buildings

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At age 39, real estate developer John Billone Jr. has spearheaded the renaissance of some of Rochester’s signature buildings, such as the former Academy of the Sacred Heart, now Chapel Hill Apartments on Prince Street, and the Medical Arts Building on Alexander Street.
Billone says he steered the revitalization of these buildings by combining his vision with some serious devotion, two things he undoubtedly learned from his father, John Sr., and the adjunct development work he did while running his 40-year-old plumbing business.
Like his son, Billone Sr. started young. He began renovating apartments at age 19; it has been his passion ever since.
“The projects are like children,” Billone Sr. said. “You love them all, and you treat them all the same, whether they’re big or small.”
He is retired now, but his “other children”-John, Joseph, Thomas and Christine-now are the custodians of more than 20 properties, or 385 apartment units, in a portfolio owned by Flower City Management Corp.
Billone is managing partner at the property development and management company he has led since the late 1990s. Since then, Billone has become a considerable player in downtown’s development.
Flower City Management employs 20 staffers locally. While the company does not disclose revenue figures, Billone says revenue at the company has grown 64 percent from 2000 to 2004.
“John represents a group of next-generation developers, people in their 20s and 30s, who are taking over the family
real estate businesses. He has chosen very challenging projects, where the answers are not easy,” says Heidi Zimmer-Meyer, president of Rochester Downtown Development Corp., where Billone is a board member.
One example Zimmer-Meyer cites is the Tudors, Billone’s plan to build six private carriage-style homes behind the Tudor-style mansion at 1475 East Ave. The project marks his foray into developing properties for sale.
After more than a year of opposition, development of the 1.5-acre project was approved in August by two city boards: the Planning Commission and the Preservation Board.
Flower City Development LLC now is formalizing the budget for the Tudors, but the estimated cost is $2.5 million to $3 million. Billone plans to break ground next spring.
He has been working in real estate on and off since he graduated from Alfred University, after having first studied engineering at Clarkson University in Potsdam.
He earned associate degrees in applied sciences in engineering and in business. Shortly after college, Billone earned his real estate license. Then, in 1990, he got his master plumbing license.
After graduation, he worked for a year as an estimator at a local heating ventilation and air-conditioning company before joining his family’s business.
Soon after, Billone and his brothers bought a local Mr. Rooter Corp. franchise, which the three owned and ran for 10 years before selling the business to their brother-in-law.
“While we were doing all of this, my dad would still dabble or work on small renovation projects, whether it was a two-family or three-family (house), so we still had some of that we were doing on the side,” he explained.
When the brothers sold their franchise, Billone went to work at Flower City Management full time, while his brothers formed Billone Mechanical Contractors Inc.

Big projects

It was at that point, in the late 1990s, that Billone began negotiating larger projects. The first was Chapel Hill Apartments, spread over four acres on Prince Street.
Built in the 1850s by an order of French nuns-the Society of the Sacred Heart-the 50,000-square-foot structure served as a private elementary and secondary Catholic school until it closed in the late 1960s.
The school was a small institution with 280 students. In 1968, the school had a faculty of 15 teachers and 11 sisters.
Today, the estate has been renovated to hold 61 custom-built, high-end loft apartments that include fireplaces, hardwood floors and exposed brick.
Billone was 36 when he oversaw the $4.5 million project and the $200,000 renovation of the academy’s chapel.
“It was pretty much a run-down boarding house, and we gutted it,” Billone said. “It was just an unbelievable project.”
Once, during a tour of the facility his father gave to friends, Billone remembers one man telling his father he was nuts to get involved in such a boondoggle.
Billone remembers his own surprise at the realization that not everyone shared his father’s vision for the building.
To Billone, the building’s potential was undeniable.
“It was a monster project, but to us it was so clear what the potential was,” Billone remembers. “When you have that type of vision, you do what it takes to get there. It doesn’t matter what other people say.”
Billone was right. Nine months after the building was finished, all 61 units were rented.
But the building’s chapel was another story. When the company started the project, Billone did not know what to do with the unusual space.
“The chapel is just remarkable. It’s literally a space that you drive by all the time and have no idea the value this place has, and the stained glass is priceless,” he said.
For that space, the Billones tried to imagine a museum, a coffee shop or architect’s office, but instead they decided to maintain the chapel, and use it to host non-denominational wedding ceremonies.
“It didn’t start out like that,” Billone said. “We didn’t know what we wanted to do with the chapel. We just knew it was a really nice, really unique space, and finally the decision was made to keep it a chapel, and we kind of went into the wedding business.”
Today, Flower City has two employees for that business. They meet with couples and facilitate the weddings.
“Last year, we had 70 weddings there,” Billone said. “And this was an afterthought!”

Medical Arts Building

Three years ago, the company turned its attention to other “monster” projects, including the 11-story, 71,000-square-foot Medical Arts Building.
Built in 1929, the Art Deco-style building served as a center for health care providers.
Over the years, the building lost many tenants and many of its unique Art Deco characteristics: black decorative details and angular and geometric shapes.
In a $4 million project, the Billones set about converting the commercial building into mixed-use space by changing the top several floors into 31 high-end apartments.
Many units include outside terraces, decks or greenhouses.
The biggest challenge of the project was converting the building into a sustainable design.
Billone set out to register the building for LEED certification in April 2004.
LEED, which refers to Leadership in Energy and Environmental Design, is the common standard in green building, also known as sustainable design. It provides a framework for assessing building performance and is based on standards meant to maximize sustainability in design with improved water savings, energy efficiency, materials selection and indoor environmental quality.
The certification is awarded by the U.S. Green Building Council, a non-profit coalition representing the building industry. Billone is a member of the organization.
Only two buildings in New York have obtained the certification. Six buildings in Rochester, including the Medical Arts Building, are registered and awaiting certification.
As part of Billone’s goal to make the project a green building, the roofing system was designed to manage rainwater and reduce air-conditioning requirements.
Day lighting was maximized in office areas to reduce electricity use, with 20 percent of the roof surface designed to naturally cool the surface in the summer and insulate it in winter.
But the most substantial investment Billone made in the conversion was the installation of a geothermal heating, venting and air-conditioning system, designed to operate under the parking lot.
It involved dotting the lot with 72 holes, each 240 feet deep, in which a closed-loop system of pipes carries heated or cooled water throughout the building.
The system is 75 percent more efficient than gas furnaces and 40 percent more efficient than modern oil furnaces. It has a return on investment of some five years.
But the $25,000 investment was a big commitment for the company.
“We actually took out a four-inch gas main out of our building, and I’m thinking ‘What are we doing? We’re pulling out the fuel that heats our building.’ And at that point there was no turning back,” Billone recalls.
“We had had no contingency plan. It was like geothermal or nothing. But we went through last winter with it, and now we’ll go through this winter with it, and it’s phenomenal,” he says.
The system is but one part of the certification, he adds. Other green aspects of the building include recycled marble, a recycled parking lot and environmentally certified adhesives for such things as glue for the carpeting.
“It’s a process,” Billone says. “I was asked this morning if I would go through it again. My initial response was that I would definitely do geothermal; that was a no-brainer for us.
“I don’t look at my heating expense as a major item on my P&L statement, whereas in the past it was $5,000 a month to heat that building. Just write that check to RG&E. Now, we don’t. We took it right out, so it’s been a good experience.”
And the building itself has been a success with renters. Flower City rented 30 of the buildings’ 31 units within four months after hitting the market in March.
“So I have one vacancy. In our market, in our town, that’s pretty remarkable. We’re very, very excited about that,” he says.

In the South Wedge

One of Billone’s ongoing projects is in the South Wedge.
He wants to build residential and retail locations on two acres of vacant land at 390 South Ave., formerly occupied by the Downtown Motor Lodge, and on adjacent properties at 420 and 426 South Ave.
The motor lodge was demolished in October 2003. The company still is working on plans for the property, Billone said.
Zimmer-Meyer praises Billone for the time he has taken to involve community members there as he considers planning.
He serves on the advisory board of the South Wedge Planning Committee.
“His focus and dedication to creating community building projects that stabilize neighborhoods and celebrate unique historical assets is particularly notable. An example of that is his effort in the South Wedge to involve the community in the design and planning of the Downtown Motor Lodge, not only early in the process but of his own volition,” she says.
“This kind of high-involvement development is much more complicated and challenging but yields stronger projects with high levels of neighborhood support.”
Billone said just tearing down the Motor Lodge stirred some excitement for the South Wedge neighborhood.
“I mean, we didn’t even put anything up yet, and we have some property values going up,” he says.
“When people see private dollars being invested, they start to believe. You go through the Sagamore, or talk to the people at Christa, and they’re getting $400,000, $500,000, $600,000, and it’s like, ‘Wow, somebody believes in it.'”
Last month, Flower City and Billone’s brothers’ company, Billone Mechanical, began moving out of the Medical Arts Building, where they have been located the last four years.
The businesses are moving to South Clinton Avenue to a larger location to accommodate the plumbing operation.
Combined, the operations employ 50 staffers, 20 of whom work for Flower City Management and Flower City Development. One of them is Billone’s mother, Sandra, who serves as the company’s lead rental agent.
Even Billone’s sister Christine works part time for the company.
“I guess it’s pretty unique that all of the siblings and parents get along and work together every day,” Billone says.
Billone is responsible for managing development, property acquisitions, budgets and financing.
“Each of us does our own thing, which is probably why we get along so well, because if there was overlap there would probably be some clashing,” he says.
Billone Sr. calls his children responsible, dedicated and very hardworking.
He says Billone, growing up, schooled himself well by paying close attention to how the business works, but what makes him proudest of his son is personal, not business.
“It’s a pleasure to see him grow into a great father, a good husband-a great guy,” he says.

Off the job

Billone has two children Danielle, 15, and John Claude, 13.
At 22, Billone married his high school sweetheart, Liza.
The family lives in Mendon. His brothers live in Victor and his sister and parents live in Greece.
While Billone and his wife were in their twenties, Liza lost her brother. Billone says the event had a lasting impact on him. It changed the way he managed his life and his time at work.
At the time, he was working 70 to 80 hours a week and was not spending enough time with his family.
So he began a pastime the family loves-camping.
“The best thing I ever did was buy a camper,” he says.
Billone likes to hunt and ski, but camping for him is what brings his family together.
“Being around a campfire, there’s nothing like that,” he says.
People around Billone call him honest and down-to-earth. John Shortino, who graduated with Billone from Spencerport High School in 1984, calls him a great friend.
Shortino too runs his own business-Superior Technology Inc., a tool and die company based in Spencerport.
He describes a time when he was working on a renovation project at home and Billone pitched in to help.
“He made phone calls to contacts he knows, tracked down all the information I needed, came to my house to help out,” Shortino says. “He went above and beyond what I could have expected from him, and he’s like that.”
As for business, Billone said over the next 10 years, he wants to expand Flower City Management’s portfolio to 500 to 1,000 units, focusing mainly on mixed-use buildings. But also he plans to do more for-sale projects, like the Tudors on East Avenue.
Each of the six freestanding houses he
has planned for that property includes a two-car garage. The houses will be priced from $450,000 and up; in size, the houses range from 2,500 to 3,000 square feet.
As far as the Tudor-style mansion, Billone plans to convert the current 13 apartments and two carriage house apartments into condominiums.
“When you start approaching $1,000 a month in rent-and there’s a certain number of people who will rent (for that amount)-but there’s a certain amount of people who want to buy,” Billone says. “And we are getting more calls from people who want to move back into the city.”
As far as where he plans to focus his projects, he says that will primarily remain in the East End and South Wedge.
“I’ve looked at buildings in the St. Paul Quarter; I’ve looked at buildings in High Falls. I need to invest in areas that are solid. In other words, for us, the East End has always been a very solid location for us to invest.”
But wherever they go, the family is going to continue building apartments.
Billone Sr., who remains active in the business, says his goal is to make tenants feel comfortable and forget they are even in an apartment.
“We always go above and beyond,” he says. “We want people to feel at home.”
([email protected] / 585-546-8303)

11/11/05 (C) Rochester Business Journal