Call it a financial redesign for the Rego Park co-op. Literally and figuratively.
Three years ago, the board members at 65-70 Booth Street in Rego Park had to take a difficult step. They raised the maintenance for the first time since the building had gone co-op in 1986. Today, the shareholders are facing another maintenance hike, this time to meet the cost of higher property taxes and fuel prices that all New Yorkers are confronting.
But while the co-op has had to make some tough decisions to keep the 42-unit building solvent, the board members have not been idle. For nearly a year, they have been discussing ways to raise more money without digging into the pockets of the shareholders. Now, after two engineering studies, the board members believe they have hit upon the best of all possible plans: turning their basement into professional offices and getting cash for what was once empty space.
“Originally, we were looking at a concept of utilizing the space in the rear of the building and converting that into a parking lot,” explains board president Dan Futterman, after an engineering report revealed that the building’s footprint could accommodate only six cars – hardly enough space to make the renovation worthwhile. Even though the parking lot idea didn’t work out, by exploring the option, the board members were alerted to a potential problem: a buckling wall in the basement. A light bulb went on in Futterman’s mind.
The buckling, non-load bearing wall, built off the service entrance, was deteriorating and needed to be replaced, they were told. “So in light of that, we came up with the idea of possibly utilizing the space, making it into a professional space – something that could be rented out and provide income,” says Futterman.
After an initial engineer’s survey revealed that the 900-square-foot area could be made into a doctor’s office area without a zoning variance – though the Certificate of Occupancy had to be changed – the board put the matter to the shareholders for discussion. They liked it. At the annual meeting this past June, nearly 80 percent of the 42 unit-owners showed up. “Everyone is pretty happy with the idea,” reports Irwin Cohen, president of A. Michael Tyler Realty, which has managed the Booth Street co-op for more than a dozen years.
So far, the board has paid $4,500 in engineering reports – $1,500 for a report on the potential parking lot; another $3,000 on the cost of renovating the basement into commercial space. “We just got a very basic, raw layout,” says Futterman of the proposed conversion plan in the basement. “We need to finalize the plan, and we need to have an engineer’s and an architect’s designs” before any construction can go forward.
Now that they have the shareholders’ approval, Cohen and Futterman estimate that the renovation work will start in the next 9 to 12 months, depending on how long it takes to draft the bid for the work, issue a request for proposals, and sort through the responses and select a construction company. Still, everything seems to be falling into place. To pay for the basement renovation, the board will be selling the second of two units formerly owned by the corporation. And while a full renovation of the basement, complete with a new entrance and exit, and relandscaped garden in the front of the building, will cost about $100,000, the co-op expects to recoup its money quickly by charging $2,200 to $2,800 a month rental for the office space.
Part of the job of being a board member is always looking for ways to reduce costs, points out Futterman. “If you can’t reduce costs, you have to go the other way and improve your revenue flow. The rental office will be a totally new source of income for the building,” and, hopefully, help keep maintenance down. So far, nearly all the shareholders seem to be behind the plan. “Anything that will keep them from having to bear additional expenses, to cover the full brunt of those increases, they are all for. There have been no complaints.”