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Two condos spent $20 million to restore their façades. Then Sandy struck.
Lido Beach Towers and Greenwich Club Residences both did façade work that partially protected them from Hurricane Sandy.
Lido Beach Towers in Long Island and Greenwich Club Residences in Manhattan would not normally have much in common. One is a beachfront condo with a colorful, decades-long past; the other is a luxury condo in the Financial District. Now they share a common experience: they both did façade work that partially protected them from Hurricane Sandy.
Lido Beach Towers
Lido Beach Towers has had many chapters in its storied history, but none as devastating as the one written by Sandy, which rendered the Long Island property indefinitely uninhabitable. This latest episode didn’t start when the storm made landfall; it started a decade earlier when the condo board made a controversial decision that ultimately spared this historic property from even more harm.
On October 29, Sandy bore down on the Lido, unleashing its wrath on this 184-unit complex. The first floor was overwhelmed by a 15-foot storm surge and five feet of sand. The water reached the ceiling tiles. All the mechanical equipment housed on the ground floor was destroyed, along with numerous ground-floor apartments.
But the upper levels, including windows, balconies, and the façade, were largely spared despite the building’s beachfront location. Although no one can live in the six-story condo because it lacks heat and running water, all of the apartments above the ground floor are sound. The condo board points to a decision it made in 2002 to overhaul its façade as the reason that the vast majority of residences did not suffer damage. The $18 million project had the unintended consequence of making the exterior sturdy enough to withstand the might of a hurricane.
“Lido Beach turned out to be very lucky,” says board president Gary Weiss, who was president during the five-year-long restoration project. “We never realized that we had built a hurricane-proof building.”
The property opened just before the stock market crash of 1929 as a beachfront resort called the Lido Beach Hotel. In its heyday, the Moorish-style property, with its iconic bubblegum pink façade, was a vacation spot for the rich and famous. It boasted swimming pools, tennis courts, a restaurant with a retracting roof, and lush gardens. Entertainers like Milton Berle and Robert Goulet played in the ballroom. By the 1980s, it had converted to a condominium and was renamed Lido Beach Towers.
But years of neglect wreaked havoc on the building’s façade. Consequently, a decade ago, the board began a five-year, $18 million project to restore the building’s roof, windows, balconies, doors, air conditioning sleeves, and famous pink hue. At the time, residents were horrified by the ballooning price tag and stunned by how much the building had deteriorated over the years. Residents paid for the work through individual apartment assessments spread out over five years. Virtually nothing happened without a fight – even selecting a new shade of pink was controversial.
Once the work was done, however, residents were happy with their restored gem. Set on 13.5 acres, the Lido had its own private beach, a barbecue pit, five tennis courts, and glorious landscaping.
No one anticipated that all the work would also provide the building with a vital shield against the wind and water when a hurricane hit. Although the façade is still undergoing laboratory testing, it appears that the only damage incurred was from flying objects that hurtled into the building during the storm. As part of the restoration, the original stucco façade was covered with a synthetic replacement called Exterior Insulation and Finish System, or EIFS, which proved to be wind- and water-resistant.
“The façade performed remarkably well,” says Jordan Ruzz, a consulting engineer who worked on the original restoration and is now helping with the recovery process.
The road to recovery for the Lido will be a long one. The losses include a number of hot-water heaters, water tanks, and pumping systems; four elevators, their banks, and all their controls; all of the electrical switching gear and metering centers; air-conditioning equipment for the common areas; communication equipment and telephone wiring; and all cosmetic finishes. When the storm surge retreated, it left behind sand up to the building’s doorstep, covering the 13.5-acre grounds.
“I’m usually good with words, but this is something indescribable. This is uncharted territory,” says Weiss. “It looked like a bombed-out war zone.”
It took nearly three weeks to pump out the water and sand. Then the building had to be sanitized. The entire 40,000-square-foot first floor was stripped down to the studs. The board is still tallying up the losses and hashing out what damages will be covered by which of the three insurance policies – flood, wind, and excess. Ultimately, some of the costs will be borne by residents, as some repairs, such as sand removal, landscaping, and building a new fence, may not be covered by insurance.
Guarding Against the Future
The board is considering ways to rebuild that will protect the property against damage from future storms. But that is no easy feat for a seaside property, which needs protection from both seawater and groundwater. Moving critical equipment up from the ground floor means finding space to house it elsewhere, and that is not always possible. The elevator equipment, for example, is too heavy to be housed on the roof. Taking a larger step like building a sea wall would be enormously expensive and still not protect the property from rising groundwater.
“Unfortunately, retrofitting a building built in the 1920s to withstand flooding is not an easy thing to do,” says Ruzz. “It’s possible to protect the building; I just don’t know if it’s economically feasible.”
In the meantime, residents are still waiting to come home. Weiss hopes that they will be able to move back by June. For now, they are dispersed, staying with friends, in hotels, in rentals, or in housing provided by the Federal Emergency Management Agency (FEMA). Weiss rented an apartment nearby. Despite not being able to live in their homes, residents are still required to pay maintenance fees, a fact that has caused tension.
“That is one of the difficult emotional areas – when people are asked to pay maintenance and they’re not living there,” says Weiss. “It’s unfortunate for all of us, but the reality is the building still has its expenses.”
Greenwich Club Residences
The Lido isn’t the only property that was protected by its façade when Sandy struck. In Manhattan, Greenwich Club Residences, a luxury condo in the financial district, was nearly finished with an over $1 million façade restoration project when Sandy made landfall. That project, a Local Law 11 improvement, ultimately proved to be a shield against the storm.
“There is no doubt that we would have had water infiltration had we not fixed our façade,” says Robin Klasewitz, the property’s general manager.
Nevertheless, the 452-unit building, at 88 Greenwich Street, sustained several million dollars in damage when its basement flooded with three million gallons of water, the equivalent of five or six Olympic-sized pools. It was rendered uninhabitable for four weeks, and would have been uninhabitable for far longer if the fire department hadn’t allowed the condo to place a fire warden in the building while it replaced a three-ton fire pump that was destroyed.
Despite the enormous losses, no individual units were damaged because no water seeped into the façade and the windows did not break. When residents finally returned home, their apartments and most of the common areas were in flawless condition.
“The building is magnificent. If you walked in there now, you would never know that anything happened,” says Klasewitz.
In 2006, Buttonwood Real Estate (a company headed by Andrew Heiberger, the founder of Citi Habitats) and Thor Equities converted the 37-story building into a luxury condo, installing a gym in the basement, a lavish billiard room, top-shelf finishes, and a stunning lobby.
When the Hudson River surged into the basement, it destroyed the building’s gym, electrical equipment, fire pump and controls, domestic water pump, compactors, and pits for all nine elevators. The tenant storage lockers were destroyed, as were the staff locker rooms. A 10,000-gallon oil tank was ripped from its footings, floating up and careening into the ceiling. The billiard room sustained minor damage but has since been reopened.
The building’s management company, Cooper Square Realty, expects that the myriad insurance policies, including flood and wind insurance, will cover the damages.
In the face of climate change, the condo board is considering relocating some of its critical equipment, like its electrical panels, to the 13th floor, where the boilers are already housed. Although insurance covers the replacement of any lost equipment, it does not cover relocating it; if the board chooses to do that, the cost would come out of reserves. The board is also considering installing a cogeneration system or a generator, projects with potential $1 million price tags. At this point, the board has not raised maintenance fees and has hefty funds in its reserves. But the gym will be rebuilt in the same location, as there is no other place to put it.
Unlike the residents at the Lido, Greenwich Club unit-owners received a reprieve on their maintenance fees while they were displaced because of a provision written into the building’s bylaws; these fees were then reimbursed by the building’s insurance. One resident, however, lodged a $35 million lawsuit against the condo board, management company, and two staff members for damages. Neither the board nor management would comment on the ongoing litigation, but Cooper Square shared letters of gratitude written by other residents.
“People understand that this was an act of God,” says Greenwich board president Patrick Redmond. “People are generally happy to be home and are anxious to get back to normal as much as possible.”
==HABITAT SIDEBAR 1==
No building can ever be fully prepared for a colossal storm of the magnitude of Hurricane Sandy. But there are steps condo and co-op boards can take before a storm hits to lessen the damage done to the building and the residents.
Preventive Maintenance Is Good Medicine. During a major storm, wind, rain, floodwaters, and debris will find the weak spots in a building and expose them. A well-maintained building, however, will have better luck fighting off the forces of nature than one in poor repair.
Maintenance isn’t cheap, particularly for repairs to façades, ductwork, plumbing, drainage, and rooftops, but straining the reserve fund before the storm to pay for preventive work can save a building in the long run.
The $18 million that Lido Beach Towers spent on a new façade turned it into a windproof and waterproof shield against Sandy. It provided the upper floors with vital protection. Board president Gary Weiss feels certain that if it hadn’t been for all the preventive maintenance performed on the façade, individual units on upper floors would have sustained substantial damage. “The building was restored so well that it literally became hurricane-proof from the second floor up,” Weiss says.
Read the Fine Print. Long before a disaster strikes, board members should read through their insurance policies carefully so they understand the fine print and know exactly what is and is not covered. Insurance policies are often confusing and the coverage terms can be vague. For the buildings damaged in the storm, figuring out what was covered by which policy often took weeks, if not months. The more a board knows beforehand, the better prepared it can be, and it can take steps ahead of time to expand coverage. When disaster strikes, quickly enlist the help of a public adjuster, who can help navigate the treacherous waters of multiple insurance policies.
Managing the Maintenance Fee. The maintenance fee is a controversial issue. While some say that maintenance must be paid even if the building is uninhabitable, some courts have allowed a maintenance rebate when an apartment is uninhabitable. But if a building is going to have a fighting chance of coming back, it must try to maintain that revenue stream to pay such expenses as the mortgage, insurance premiums, and taxes. Therefore, make sure residents understand that maintenance fees are vital to the building’s ability to operate – even if it isn’t habitable.
Consider an insurance policy that covers maintenance costs for displaced residents. But make sure board members fully understand when it can be tapped.
At Greenwich Club Residences, residents were given a reprieve when the condo board realized that its insurance policy would reimburse the building for maintenance fees while residents were evacuated. With the help of a public adjuster, the board was able to get the insurance company to agree to cover the cost. “That was a huge win,” recalls board president Patrick Redmond. –RK
==HABITAT SIDEBAR 2==
West Village Houses
At a recent meeting at his office, Anton Cirulli (right), managing director of Lawrence Properties, turned to Jim Bozart and quipped: “Of course, we couldn’t have started handling your property in the new year; no, we had to start early.”
It’s lucky for the West Village Houses (below) that they did; Bozart, the board president, says that the co-op got its money’s worth from the newly hired firm. Soon after taking over as managing agent on the 42-building 420-apartment complex in lower Manhattan, the management company had to cope with the devastating effects of Hurricane Sandy, which knocked out power and flooded the basement and ground-floor apartments, leaving 33 families homeless. “Almost 10 percent of our apartments have been destroyed by the storm,” says Bozart. “There’s been extreme dislocation, lots of suffering, most of the people are not back in those units. They’ve been gutted.” In the following excerpts, Cirulli and Bozart talk with Habitat editorial director Tom Soter about their experiences.
This was a major catastrophe. What was the impact on your company?
CIRULLI We brought down our director of operations, and we brought down a construction manager. We had three more people on top of the two that are normally stationed down there. So we increased our presence by at least 125 to 130 percent. Most of our people were working, for at least the first six to seven weeks [after the storm], 12-hour days, 13- to 14-hour days, seven days a week, until I got the remedial company to get in there and rip out the sheetrock.
Time was of the essence – the possibility of mold was a substantial concern, and we were afraid if we didn’t address it, the mold would grow and expand to the upper floors. After you have a flood of this nature, if it isn’t under control right away you are going to have a ton of odors, sickening odors. The super was excellent in putting heaters and air purifiers into the apartments so we minimized the dust, we minimized the air pollution, we minimized the mold smell.
We also had hired a public [insurance] adjuster to come in to start that process.
We also brought in extra security because all of a sudden we found [some] very energetic people [were taking] stuff that people left outside the apartments that they might otherwise have kept, like metal furniture. They were these metal scavengers trying to pick up stuff.
It was a war zone, it was like some of the stuff I saw many years ago in my service in the army. It was a disaster, a monumental disaster.
Did your experience as a colonel in the military help?
CIRULLI Absolutely, absolutely because no one was prepared for this. This was like a bomb hitting the property. There is no preparation for a bomb. I have been in real estate management for 35 years, and when I first saw this, I said, “My God, this is overpowering – how do we get these people home? How do we get insurance adjustors? How do we get this kick-started? Where do we go? Where do you go?” This wasn’t a Joe Schmo construction thing to get the remedial work, this was, you know, so –
BOZART And this was occurring at a time when the system was overwhelmed. You know, insurance companies that have a hundred claims a day suddenly had 20,000 claims and that just was impossible to handle. So, it required great expertise, patience, and good relations to get these people to come and pay attention to you, because they were so overwhelmed. This is so overwhelming today, it hasn’t cleared yet. And it’s true of all of the agencies and insurance companies and other parties that are involved in this: contractors are overwhelmed, trying to get bids from people, trying to get insurance adjustors get things settled. Everything is backlogged because the entire system is overwhelmed by this very, very incredible disaster.
Simultaneously, Lawrence Properties was dealing with storm problems at other buildings?
CIRULLI It wasn’t isolated. This was the biggest place, because this was 33 [damaged] units and required more attention than the other buildings.
You are spending an extra amount of time at the West Village Houses?
So how does that affect your buildings that were not seriously damaged?
CIRULLI It means that I put in 10-hour days, and we’re putting in substantially more on Saturdays than we normally do. The people with me – the director of operations, the construction manager, the property manager – are putting in a substantial number of hours now, although that will slow down shortly. But we like what we are doing because it’s personal. This is rewarding because it’s about helping people in distress.
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