It often starts with a leak. Or an on-again-off-again boiler. Or a high energy bill. In short, the process starts with a problem requiring extensive repairs or replacement. And that can be a major challenge itself. In fact, the amount of money, time, coordination, and risk in a major capital improvement program can stop many a brave board from proceeding. Or at least slow them down.
And the larger the co-op or condo, the more complex the challenges. There are bid specifications to be written and then analyzed, contractors to be vetted and chosen, and expensive contracts to sign. Once that is done, there are the logistics to work out: sometimes equipment has to be built on the spot, and other times there are difficulties just getting it through the door, transporting it into the basement, or moving it up to the roof. Then, there is the question of access and scheduling: various contractors have to be worked into the overall timetable, residents usually have to be relocated while work is being done, and, of course, they have to agree to let workers into their apartments.
When the work involves many different trades, the time required to manage it all can be overwhelming, even for the most hands-on board and manager. Rather than cut corners and risk burnout, many boards are turning to a relatively new breed of professional: the construction manager. This adds dollars to the bottom line, but when juggling projects, access, liability, and resident concerns, it often is the smartest way to go.
Take Plaza 400, for instance. Designed by architects at Philip Birnbaum & Associates and built in 1968, the 591-unit building on East 56th Street was originally a rental and became a co-op during the conversion boom of the 1980s. It is self-managed, with a 24-hour doorman and concierge, as well as a seasonal rooftop heated pool, a common sundeck with views of the Manhattan skyline, a skytop lounge, and a fitness center. There is also a children’s playroom, a bike room, and a 24-hour attended parking garage.
Plaza 400, which successfully completed not one but three capital improvement projects, is a textbook case of what steps need to be taken when doing major overhauls to your building’s infrastructure.
The Construction Manager
Plaza 400 needed to replace oil tanks and heating systems, as well as complete a conversion to dual-fuel capability for its boiler. Typically, Nora Weeks, the in-house executive manager of the 40-story co-op, would have supervised all the work, assisted by the superintendent.
But this wasn’t a typical job. Plaza 400 was going to replace three 16-foot-long boilers, two 20,000-gallon oil tanks, and reline the chimney flue. That’s a lot to supervise.
“We needed someone who could monitor this closely,” explains Weeks, who says she was eager to be a partner in the plans but, with her daily work responsibilities, couldn’t devote the time necessary to be the job’s sole supervisor.
The co-op hired Mark A. Powasnik, an engineer with WSP, a consulting company with offices in New York, to design the specs needed for the plan. The board realized that it was not in Powasnik’s job description to organize, supervise, and generally manage the many workers who would be employed on these tasks. Therefore, the co-op looked for a construction manager, somebody with expertise in handling construction plans, reviewing bids, hiring contractors, and securing the permits needed from the New York City Department of Buildings.
“We wanted someone who had done this [type of] project before and was familiar with Manhattan buildings,” recalls Ana Giglio, the president. “Manhattan is a different beast [from] the other four boroughs. And [we wanted] someone who had worked with luxury co-ops and condos since that is different than dealing with rentals.”
The 11-member board interviewed several candidates – engineers on the board recommended a few – before finally hiring Doug Weinstein as its construction manager in 2013. As a vice president with Akam Associates’ Project Management Group, the division that deals with capital plans, he was well versed in the intricacies of heating plant and chiller replacements in aging New York City buildings.
“He was here to oversee what was going on downstairs frequently, to make sure that everything was in code and per the specifications the engineer had produced,” Weeks says.
Weeks, Weinstein, and two engineers who sat on the board prepared and got contractors to submit bids and then analyzed them based on price, length of time estimated to complete the project, and experience. The team also checked references and reviewed projects the contractors had completed. Each candidate was brought in to answer questions and make what is called “a final and best price” offer before a choice was made.
Once the contractors were chosen, the construction manager had to determine the schedule for the work and the workers. For instance, when the boilers were being replaced, contractors waited to bring in the middle boiler so they would have room to wheel in more equipment. “Otherwise,” Giglio notes, “we’d have to take down walls. It was time and cost saving. This is why you have people there to advise you.”
When work began, it was crucial to have Weeks and the building superintendent on top of the plans. “We inspected everything together, we walked to the site together, reviewed spreadsheets together, and discussed all changes with the board that had to be made by the engineers. We were belts and suspenders. It worked best for the building that way,” explains Weeks.
The board wanted the superintendent to be on-site and kept up-to-speed on everything. “It was really the super who was dealing with this project every day. He was in constant contact with Doug. Doug knew the project but no one knows the building better than the super. In order for this to go smoothly, everyone had to be involved,” says Giglio.
Shortly after Weinstein was hired, the chillers broke. Their repair had been a project the board had planned to do in the future. Suddenly, it had to be done now.
“The original bid was for boilers, oil tank [replacement], and relining of the chimney flue,” Giglio says. “Since Doug was managing those projects, we added the chillers onto his contract.” Instead of having Weeks or a new contractor work on the chillers, she explains, “it made sense to have one individual managing the project so there would be no miscommunication. Two individuals would have been difficult.”
Building It On Site
The pressure was on: the work had to be completed by May 2014, giving them about a year to complete all the plans so that residents had working air-conditioners available for the summer season. Plus, the coolers had to be designed and built custom-made, a 16-week process. “The chilling equipment wasn’t sitting in a yard somewhere. It had to be built. We had to figure out lead time and work backward,” observes Weinstein.
Replacing the three heavy boilers was also tricky. They were located in the basement, meaning the work area had to be accessed from the parking garage, not the street. Before they could even bring in material, however, they needed to make sure the ramps could hold the weight of the new equipment as well as the cranes that would deliver it. And they also needed to coordinate when the garage would close so the job could proceed.
All the work was done in a 2,600-square-foot area. The 16-foot-long boilers were built on site, each one taking about two weeks to construct. The two 20,000-gallon oil tanks were removed and replaced with one brand-new 20-ton tank (20,000 gallons).
While relining the chimney, the contractor was able to do the work without shutting down heat and hot water to the building. “There were definitely concerns about logistics,” observes Weinstein. “You want to manage a project like this so the building residents are never without service.”
Weeks gave residents regular updates. “The construction manager leaves when the project ends but the building manager stays after the work is done, so the more involved you are in the process, the better,” she notes.
“Every time something is going on that affects the residents, a communication has to go out. There were times when heat was at a minimum when we were transitioning from one system to another. The engineer and construction manager would tell us when the information was due. I’d transcribe all the information and let the residents know,” recalls Weeks.
While the workers did not need access to any apartments, they did need to alert homeowners when the garage and service entrance would be closed. It was shut down twice, both times on a Saturday to minimize the inconvenience. At one point, there were 20 people, including welders, as well as cranes at the site to bring in the boilers and chillers. The street had to be closed off one Saturday for equipment delivery.
Weeks presented regular updates to board members on the schedule, as well: “It was an engineering feat. All of the notifications about what was going on came from my office.”
Keeping Them Involved
“Our shareholders are quite involved in the day-to-day happenings in our building. We had to keep them abreast of everything,” says Weeks. Weinstein was invited to board meetings to answer questions about the latest developments. “It was good to do that because there were questions he was really best able to answer. Sometimes we are reading reports with a great deal of technical information and we need clarification to arrive at a decision,” says Giglio.
In the end, there were no cost overruns or delays – common problems in capital plans. The cost of the chillers came in at what was earmarked. The building spent about $3 million on the project, money taken from its reserve fund.
Giglio, for one, is satisfied, and offers this advice: “There are very bright individuals on the board but when it came to the truly technical aspects of the project, we [had to] rely on experienced professionals to guide us with the decisions,” she observes. “It is crucial that we hire individuals with vast experience so that we can arrive at an informed decision.”