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Expecting the Unexpected

Chuck Wall, board president

The Alexandria House, Manhattan

 

 

Chuck Wall never expected to become a publisher. He says he “sort of fell into it” after graduating from Columbia University in 1970. For most of the past 40 years until he retired in 2015, he worked at McGraw Hill, overseeing the publication of books that help students prepare for standardized tests.

Wall also never expected to become some kind of real estate expert. But when he graduated from Columbia, he decided he didn’t want to leave the Upper West Side; so he stayed there and eventually moved into the 74-unit Alexandria House, a gut-renovated co-op at 250 West 103rd Street. Because he “was interested in making sure that everything went smoothly in the building,” about five years after moving in, he signed up for board duty, first as the treasurer, then two years later, as president. “I was interested in the financials of the building. Obviously, I’m interested in protecting my investment. I found it a challenge, and I found it interesting,” he recalls.

Now, twenty-five years later, he is still on the board, but admits he knows a lot more now than he did back then. “There were a lot of things about the building that were still in kind of shakedown mode when I started,” he says. “It was interesting because everybody was new. Almost nobody had lived in a co?op before. Everything about it was new for everybody on the board and all the residents. I joined because I was interested in the finances. After all these years I know more about the physical plant of the building than I ever thought I would.”

Mortgage coming due leads to opportunity. His education paid off big time in the last three years when the Alexandria House faced a series of problems and projects that tested the mettle of the five-person board. That story starts with a fairly routine event in the life of most co-ops: the board’s previous mortgage was coming due. With an eye toward future capital projects, the board refinanced its mortgage for $2.5 million (of which $1.75 million went to pay down the first mortgage and the balance went into the reserves). The building also took out a half-a-million-dollar line of credit.

 

Lobby renovation halted by fire. Not too long afterward, the co-op got hit with a one-two punch that could easily have sent them reeling. A freak electrical fire broke out in a ground-floor apartment. Firefighters hosed the apartment down but, because it adjoined the lobby, the entire entrance area was wrecked. “The firefighters pumped water into the apartment and up into the ceilings. There was water everywhere; it even came down through the light fixtures,” recalls Wall. Such damage would have been bad under any circumstances, but it was worse because, in the last three months, the lobby had just been redesigned, and at considerable expense. Disturbed but not defeated, the board repaired and renovated the lobby (again) primarily with money from its insurance policy and some from the reserves.

 

Façade repairs needed. After an inspection of the nearly 100-year-old building’s façade as part of Local Law 11 requirements in 2012, the board hired a contractor to perform the necessary repair work. “It wasn’t starting expensive but it finished expensive,” notes the co-op’s attorney, James Samson, a partner at Samson Fink & Dubow.

“There were cracks in the façade that had to be repaired,” explains Wall. “Once the contractor got up there, he saw that there were more things to repair than were initially indicated.” And more things meant more expense. But the co-op was prepared, having a reserve fund sufficient for the task.

Decades-old windows replaced. Assisted by its longtime management firm, Orsid Realty, the board then undertook a long-deferred project: replacing the property’s 650 windows, which dated from 1982. “The windows were in bad shape,” explains Wall. “The shareholders had been asking for them to be replaced at every annual meeting, but we never felt comfortable doing it because it was so expensive.”

Once the job was underway, the contractor, Kelly Windows, encountered trouble and delays caused by the nearly 30 specially reinforced and building code-required “lot line” windows. The drywall surrounding them had to be completely replaced – “which was a difficulty and a cost that we had not foreseen,” Wall says. “It caused delays and greatly complicated the project.”

 

Landmarks commission involved. Then there was the historical accuracy question. Located in a landmarked district, “they got all tied up with the Landmarks Preservation Commission,” Samson notes. It took many months to get approval from the commission for the window work.

 

Roof replacement needed. The window job done, the board turned to its roof. Over the years, the building had leaks in the top-floor apartments. “And serious leaks developed while we were doing the windows,” observes Wall. Adds Samson: “The roof had become porous, and water leaked. Sometimes when we really had major rainstorms, it went down a couple of floors.”

It soon became clear that the entire roof had to be replaced. That meant removing and storing an elaborate roof garden before any work could be done. That work was scheduled to be finished in July 2015. The board used funds from its line of credit to pay for that job, and now plans to assess the shareholders at a future date to replenish the reserves.

 

Be sensitive to the residents. “You have to have a real sensitivity to people and realize that everybody in the building is going to have a different take on nearly everything,” says Wall. “It’s an exercise in compromising and trying to see things the way other people see them. But we were actually lucky [with] these projects. There was not a great deal of controversy. Everyone recognized what had to be done.”

In the end, the true test for boards is not what the challenges are, but how they face them. For as Wall notes: “You have to be prepared. You have to expect the unexpected.” He pauses and then adds with the sort of ironic understatement that probably helped the board and building survive: “I’d say we’ve had a very busy few years.”

 

 

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