Anyone who has served on a co-op board will tell you it can be torture to get members to agree on the time of day. Surely trying to get two seven-member boards to work smoothly together on major capital improvements would be a fair approximation of co-op hell, right?
Wrong, say board members at Bay Country Owners and Bell Owners,
co-ops in Bayside, Queens, that have been working in surprising harmony since they converted under a non-eviction plan in 1985.
“The story here is that two boards can work together,” says Bell Owners board president Deborah O’Rell, 52, who runs a radio marketing firm in Manhattan.
Ellen Rosa, a computer projects manager who has been Bay Country’s board president for the past ten years, adds: “I think the reason the two boards have worked so well together is we always felt we were one unit.”
It’s easy to see why. The co-ops are virtual mirror images of one another. Each consists of a pair of seven-story brick buildings, built in 1963, that house a total of 120 units. They’re perched between Bell Boulevard and Little Neck Bay.
But the glue that has held the neighboring co-ops together over the past two decades is not geography. It’s people and history. After the buildings converted, following a protracted four-year negotiation with the sponsor, the first boards received some valuable advice from their accountant, Norman Prisand. He told them: “Prioritize. Try to do health and safety improvements first, then energy conservation, then beautification.”
Prisand, who is still the accountant for both co-ops, now says with satisfaction: “They have followed that advice. And they’re doing something else that’s pretty unique. The two co-ops have instituted a policy of having a line item in their annual budgets to replenish their reserves. This sets aside money for major capital improvements. It’s very rare in a free-market co-op. It’s conservative, cautious, and prudent.”
Last year, each co-op budgeted a $33,000 infusion to its reserve fund; this year, the figure will rise to about $44,000.
Another boon to the bottom lines is that a transfer fee, or flip tax, was written into the original co-op agreements. Today, every time a shareholder sells, he must return ten percent of the profit to the co-op.
No amount of farsightedness and cooperation could avert the problems that seem to besiege every co-op board. An incompetent superintendent, an unresponsive management company, an inept on-site manager, and shoddy repairs to boilers and elevators – these were just a few of the headaches that plagued earlier boards.
But the boards stuck together. Today, they share many expenses – salaries for supers, landscaping, snow removal, legal fees, management costs, supplies, and some major capital improvements. They also try to share inconveniences.
“When we repaved the parking lots, for instance, we did one at Bay Country, then one at Bell, then one at Bay Country, then one at Bell,” says O’Rell of the Bell board. “We tried to share the burden as much as possible. We try to keep things equal.”
That’s not to say that both co-ops are always on the same footing. Life isn’t fair. The two Bell Owners buildings face Little Neck Bay, and exposure to the elements has traditionally meant slightly higher energy costs. Six years ago, the wind and salty air were punishing the brickwork so aggressively that an unanticipated repointing job had to be undertaken. The price tag was a stiff $150,000 – which, despite conservative, cautious, and prudent planning, put a deep dent in the co-op’s cash reserve and forced the board to swallow some distasteful medicine.
This year, the board levied a ten percent increase in maintenance payments as a way of replenishing a cash reserve that had been depleted not only by the unscheduled brickwork but also by rising taxes and energy costs. To soften the sting, the Bell board did not impose an assessment to replenish the reserve, which enabled shareholders to receive full city and state tax deductions.
“That really was a hit,” O’Rell says of the maintenance increase. “But we said, ‘Let’s do it one time instead of dragging it out for everybody.’ Next year, there’ll be a nice low, single-digit increase, and our reserve will be back up around $100,000.”
The sailing has not always been smooth. “It’s had its good moments and its strained moments,” says Jim Goldstick, a principal in Mark Greenberg Real Estate, which has managed the co-ops since 2003. “If the two co-ops have different agendas, if one is satisfied and one is not, it can be strained. Those are the peculiarities of this kind of setup. The boards are getting along very well” – diplomatic pause – “this year.”
Goldstick recently circulated a survey that asked two questions: Are you happy? What are your priorities for capital improvements?
“The feedback was over 90 percent positive,” Goldstick says with satisfaction, but priorities were not identical. The majority of shareholders in both co-ops agreed that exterior brick repointing and parking lot repaving were the number one and number two priorities. Both jobs have been completed.
But the shareholders in Bay Country listed elevators and roofs as their third and fourth priorities, while their neighbors at Bell Owners said it was roofs first, then elevators.
Henry Krell, a longtime Bell Owners board member, doesn’t expect this to be a major conflict. “Both [roofs and elevators] are important for all four buildings,” he says. “We may do [the jobs] separately, but the contracts will be let out for all the buildings at once.”
Krell has lived at Bell Owners since 1980, when the property was still a rental. Then, as now, the residents were solidly middle-class working people. Apartments now sell from $200,000 up to more than $400,000, a healthy though not stratospheric increase from the old days.
While the two co-ops are, legally, separate entities, Krell says living there feels like being part of one big family – largely because of the way the two boards have cooperated over the past two decades.
“If you had two co-op boards who didn’t talk, it would be a weird place to live,” Krell says. “But it’s not like that. It’s a very congenial place.”