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Transparency between shareholders and the board will make any project go smoothly.
AUTHORMichael J. Wolfe, President, Midboro Management
PAGE #p. 66
When adding or changing amenities, boards should keep shareholders informed at every step.
We’re adding a roof terrace to a 30-unit co-op on the Upper East Side, built in the early 1900s. The hurdle we’re facing is that we have to replace the entire structural deck because the concrete deck won’t support the furniture and the pavers. We are also raising the elevator bulkhead one story, to allow people to exit on the roof terrace from the elevator. We’re adding a staircase to the roof deck, we’re eliminating the water tank, and we’re putting in booster pumps.
Since this was such a large expenditure – over $2 million – the board felt it was prudent to take a poll, which is really not a vote. A poll is more to see about the interest in the building. They did the poll, and it turned out the majority of shareholders were in favor of the project and the assessment, which was between $60,000 and $100,000 per apartment. Almost everyone paid either in the first month, or within the first couple of months. The hurdles were the presentation, the engineering, the logistics, and the coordination of the trades.
We recommend that all of our clients present information on something that’s an amenity, or an elective, to the shareholders. If at the end of the day some of them don’t like it, you’ve done your job by presenting it, and by explaining the thought process and the benefit to the community. The key is transparency, which means that although the board does have the power and the right to do things within a building, there are elective items that have an effect on the shareholders – typically in their wallets – that should be presented in a way that gives as much information as possible. You want as many people happy as possible.