Richard Scorce, Board Vice President, Chatham Green, Manhattan
You’ll never win. We have the proxies.”
After those words were uttered by the board president at the 2005 annual meeting of my cooperative, they became a rallying cry at Chatham Green. For years, a small group of shareholders was part of a shareholder association and kept vainly pressing an entrenched board for more “transparency.” But those words solidified the shareholders group and resulted in a huge increase in membership. This was the groundwork for the complete replacement of the board of directors, accomplished over the next three years.
Chatham Green is a 420-unit redevelopment built in the 1960s that initially attracted civil servants and city employees who found its downtown New York City location ideal. Also, many people from the surrounding areas looking to upgrade their standard of living moved in. Because things were so comfortable and affordable, however, complacency soon took hold. Shareholders did not get involved with or run for the board and, as a result, the same members stayed in power, year after year. I guess it’s human nature. Things must deteriorate until you can no longer look the other way.”
In 1993, the board hired the property manager away from the management company to be the co-op’s own in-house agent, reporting only to the board. In time, though, the relationship became too comfortable and there was no line dividing management and board. There were many questions and few answers. Shareholders were demanding change.
It was impossible for individuals running alone to be elected. Therefore, our shareholder association ran slates of three candidates over the next three years, developed a ground force of people to spread our message, held our own meetings, and distributed a newsletter. And we managed “to get the proxies.”
Our work was just getting started. Within a matter of weeks, the property manager and assistant property manager both resigned. As a result, this “new board” got a “crash course” in managing the building. It was a baptism of fire which made us better board members. While we were interviewing and evaluating management companies, many of us spent time manning the management office. During those three months, I saw more parts of the building than I had seen in my previous 30 years living at Chatham Green. Our meetings often lasted until midnight.
We had to handle day-to-day operations and emergencies while balancing our own lives and searching for a new management company. I think this has made our “hands on” board more informed and better qualified to plan for the future while avoiding the mistakes of the past.
There were many potholes along the way. The files on the office computer had been deleted; shareholder files were missing and/or incomplete, misfiled, and outdated. The prior management company was dragging its heels providing documents and files. We also retained new legal counsel because the prevailing feeling of the board and shareholders was that our legal counsel was too closely aligned with the “old regime.”
Shareholders who were either intimidated or fearful came forward and a feeling of community started to develop. We saw increased attendance at our monthly shareholder meetings; greater interest in joining committees and getting involved in building and neighborhood concerns; and more expressions of a desire to run for the board. We are in the process of developing a web page and we publish a newsletter. There is greater transparency. We have revised house rules and will start updating our bylaws. We tackled the task of having too many parking permits and not enough spaces in the parking area. We felt that our complex cannot operate in a cocoon and have developed alliances with adjoining buildings and community organizations.
There are several huge undertakings on the horizon. The physical plant is 45 years old and we will need new elevators, lobby renovations, and general maintenance of the property. Hopefully, the financial burden of these repairs will be borne by increases in rental rates on our commercial properties. In the past, we were hampered by the 80/20 tax considerations and commercial tenants received below market rents and long leases. This will change as the leases come up for renewal.