New York's Cooperative and Condominium Community

Habitat Magazine October 2020 free digital issue

HABITAT

ARCHIVE ARTICLE

Taking the Long View

The professionals profiled here went into business when the co-op conversion frenzy was in its infancy – and condos were a rarity. These professionals survived and thrived because they learned the ropes through trial and error, they changed with the times, and they were always guided by the conviction that a quick fix is never a substitute for taking the long view.

 

Pamela DeLorme

President, Delkap Management

Management Executive

 

Forty years ago, Pamela DeLorme was just starting out as a fresh-faced young property manager, eager to learn the ropes. The problem was, so were co-op boards.

“The board members had no idea about what it was like to be on a board,” she recalls. “The challenge was to work with them so they could familiarize themselves with the bylaws and declarations, to actually do the function of the board and their requirements under those bylaws.”

As for her own first years, she says, “I think it’s just a case of somebody new to the industry getting used to what’s required of a managing agent out of the gate. In other words, learning about the property, what is required, and the demands of the people – and learning how to deal with the different personalities of the different boards and the different properties.”

Over the years, things have improved and the challenges have changed. “The people know more about [co-ops and condos] than they did 40 years ago,” DeLorme says. “Now it’s devising budgets that are suitable for the buildings without having to raise maintenance to exorbitant amounts. The challenge is to keep maintenance low while effectively managing the properties. Conversely, the buildings that were brand-new in 1975 are now that much older. Therefore, you have to maintain the buildings in a different way than you did years ago.”

Many boards are more knowledgeable – but some are not. No longer the novice manager, DeLorme frequently has to educate boards about funding for repairs by using a bank loan, a mortgage, or an assessment. “Then you have to get them to understand the mechanics of passing those expenses on to the shareholders or unit-owners,” she says. “It’s more challenging because there is so much more involvement now.” In addition, “I’ve taken over several fiscallychallenged cooperatives and developed plans to avoid bankruptcy.”

What’s DeLorme’s strategy for dealing with irate board members, shareholders, and unit-owners? “Honesty is a big thing,” she says. “You have to be honest with them and tell it like it is. Trying to sugarcoat something is not the way to handle it. They’re not going to all agree with you. Some of them feel that they have all the answers and that you don’t know what you’re doing. When you’re faced with that, then let the rest of the board vote on the way they want something to be addressed. If it fails, it fails. Then you move on.

“Through experience, we know what works and what doesn’t. Whether the board wants to accept that is up to them. We serve at their pleasure. You have to listen to them as much as you want them to listen to you. A lot of that comes over time. It’s hard. You have to be willing to learn, to take criticism, and to have patience.”

 

Steve Wagner

Attorney/Partner, Wagner Berkow

As a new attorney representing newly converted co-ops, Steve Wagner’s first big challenge was to figure out what was going on. “It was the go-go days of co-oping and condo-ing,” he recalls. “The regulations were relatively new and subject to challenges by landlord/sponsor groups.”

There were many in the industry who looked down on lawyers who represented co-ops, Wagner recalls, and he was often amazed at what he and his colleagues encountered. Some landlords’ tactics easily qualified them as “goons,” in Wagner’s view.

“There were landlords that harassed tenants who were not regulated,” he says. “The housing court was relatively new, and there were very few areas of co-op and condo law that had been explored by the courts or developed. You had to have a broad understanding of the housing laws, of the attorney general’s regulations, of corporate law. It was very difficult to figure out what a court might do with all of that in a particular situation.”

Over the years, the goon squads have been replaced by other challenges: hoarding, bedbugs, roaches, secondhand smoke, illegal sublets – the list goes on. Though the problems may have evolved, Wagner’s strategy has remained remarkably consistent. “When somebody is requesting something,” he says, “I recommend that my clients try to get to yes instead of no. I find that trying to meet people halfway and explaining things clearly is always helpful. Sit down and have a drink; talk about things. I find that when you do that, it lowers the temperature and allows people to speak more freely, or perhaps to try and understand a little better.”

It comes down to managing expectations. “If somebody’s upset, I try to explain what’s going on,” he says. “People get upset very often because they don’t understand, they’re angry or frustrated, or their expectations have been completely out of line. I always listen carefully.”

And Wagner’s life lessons from nearly 40 years in the business? “You really have to like what you do, and it won’t be work. There have been many times when I thought that I could make a lot more money in another field. But I enjoy what I do, so I just keep trucking along.”

 

Ed Mackoul

President & CEO,   Mackoul & Associates Insurance Broker

When Ed Mackoul first started working as an insurance broker, it was a bit like learning how to swim by being tossed into a pool. “We were a very small agency at that point, run by my father with maybe two or three employees,” Mackoul says. “He’d provide guidance to me, but there really wasn’t any kind of sales manager or anyone who could attend appointments with me or provide classes.”

And now? “Our producers these days receive classes we provide internally on various topics such as understanding coverages and building relationships, handling different difficult clients, things like that,” Mackoul says. “There’s also external classes that they can attend. We send them to producer school and support them if they want to further their education by obtaining designations in the insurance field. We simply didn’t have that” back then, he says. “We were too small of an agency at that point.”

After 20 years, though, the resources aren’t the only thing that’s changed. His biggest challenge today? “Probably learning to budget my time better,” he says. “When I first started out, my job was just to develop clients. Now, I’m the president of the company and my role is to focus on where the agency will be tomorrow, next year, and five years from now, so I don’t get out and develop or see clients as much. But I still have this large client base that will come to me and that I like staying in touch with. They’ve turned into friends. I had to learn to budget my time better because, if I were out on the road five days a week like I was 20 years ago, I’d be working 80-hour weeks, as I’m still involved in the marketing, planning and the financial aspects.”

There has been another big change: “Everything’s 24/7 now. Twenty years ago, even if work didn’t end at 5 o’clock, we weren’t receiving a ton of emails after hours. People didn’t expect an answer within two minutes. These days, everything is we need it now.”

The next generation may be contributing to the problem. “They’ve grown up with email and social media.” Mackoul says. “That can be a positive, since though they don’t have the [work] experience, they’re much quicker and much more fluid with technology. They are able to do things much, much quicker.” Which can present a new challenge: “Say we have a new underwriter. They tend to send emails. If they don’t get a response, they’ll send another email, and if they still don’t get response, they’ll send a third email. Someone with a little bit more experience would say, ‘I’m going to pick up the phone and call this company underwriter or this client.’ This younger generation, though much quicker and much more knowledgeable about technology, must learn to say, ‘Email isn’t working. I’m picking up the phone and making that call.’”

Mackoul has some other advice for the next generation of brokers: “Communicate often. Then, even if you don’t have the answer, respond. Provide an estimated time frame of when it’ll be done and let them know you’ll get back to them. If it’s not done in a promised time frame, reach out to them and say, ‘Hey, listen. This is taking a little bit longer than expected.’ Communication is certainly the key here.”

 

Carl Cesarano

Partner, Cesarano & Khan Certified Public Accountant

Carl Cesarano started out as a CPA in 1984 at Coopers & Lybrand (now PricewaterhouseCoopers), working with a number of Fortune 500 companies. In December 1989, he and M. Aleem Khan opened Cesarano & Khan, a small CPA firm dedicated to working with co-ops and condos. It was clear to Cesarano from the start that many boards had no idea what to do with him.

“There was an expectation gap,” Cesarano recalls. “When I started out auditing publicly traded companies and Fortune 500 companies, [an auditor would] go in and be given almost everything, all the financial statements, all the disclosures and supporting documentation, and they’re told, ‘Audit them.’” Sitting down with managing agents, though, was a different story. Managing agents would hand all of the raw financial data in the form of a management report (generally on a cash basis) and expect him to first put together the financial statements in accordance with Generally Accepted Accounting Principles or GAAP, and then begin to audit them.

“By and large, they looked at you as the accountant and also the auditor,” explains Cesarano. “You’re supposed to take these reports of this money coming in and where money was being spent, and you’re supposed to create the financial statements; you’re supposed to put the books and records into generally accepted accounting principles. So you’re basically saying, ‘Am I supposed to be auditing my own work?’ ”

Cesarano says that boards have become more sophisticated over the years, but some are still using bookkeepers and accountants provided by their management company. Many are also still using older software or platforms not designed for the industry.

But the next generation of accountants is finding out the hard way that some things never change. “They’re still taught in school that basically what you’re doing is a ‘risk-based audit,’ which asks, ‘What are their controls?’” Cesarano says. A risk-based audit customizes the audit based on those controls.

The responsibility for the reality check is now falling on more experienced shoulders. “The first thing I do,” says Cesarano, “when I sit down with [new accountants] is say, ‘We have to sharpen your bookkeeping skills, because you’re taking our accounting records from last year, and you’re going to have to do a certain amount of bookkeeping to convert these books [from cash-in, cash-out books to formal, auditable financials]. Then you have to audit those books.’ So there’s still a bit of an expectation gap. It’s really a roll-up-your-sleeves-and-get-your-hands-dirty kind of challenge.”

 

Julio Davila & Paul Tornabene

Superintendent & Assistant Superintendent, Cadman Towers

Julio Davila has been the super at Cadman Towers in Brooklyn for just eight years, but he’s been a member of the community for much longer. “I started off as a doorman in January of 1999,” he says, “and moved on to the maintenance department, and then became super.” Over the years, he’s seen the population of the building age and pass on, while new families and families with young children moved in.

Not everything has changed as clearly as the demographics have, though. Davila’s assistant super, Paul Tornabene, has worked at Cadman Towers since 1975, and according to Tornabene, “It’s actually been the same throughout the years. I’m the person that troubleshoots all kinds of different problems that we have. If we have a water leak, I’ll be the one to look for it and find the leak.”

Despite obvious advances – the boiler now has a heat timer controlled system, and the elevators have gone through several upgrades – much of Davila’s, Tornabene’s, and the staff’s day-to-day responsibilities remain similar to what they were decades ago. “In the morning, we check all the mechanical rooms,” says Tornabene. “After we do all the rounds, we go to the work-order tickets and see what needs to be done.

“The maintenance on the boiler is still the same,” he continues. “Once a week we drain the boilers. Once a month [we check] the safety valve on the top of the boiler – we go actually on top of the boiler, and that’s something that only me and Julio do, because we want to make sure it’s done. It’s an important job.”

The big changes seem to be in the skill sets required by a super now as opposed to when Tornabene started. He says that if the building was looking to hire a new super today, the applicant would need a unique mix of both mechanical and technical knowledge. “He needs to know computers,” Tornabene insists. He himself has taken classes through his union, Local 32BJ, to increase his knowledge, and he currently holds several licenses, including an air-conditioning and refrigeration license. “That took me about three years before I got it,” he says with pride. Davila agrees. The union, he says, “has wonderful training courses. I always try to recommend the staff to go to them. Even if you’re not looking to move up, you never know when an opportunity can arise.”

These days, the challenges Davila faces are more logistical obstacles than technological advances. In particular, he’s involved in a major capital-improvement project to repair a garage deck, what he calls, “one of the biggest in the history of Cadman Towers. I’ve been involved with the vetting of all the engineering companies. It’s been a really good learning experience to be a part of that process – interviewing, seeing what they’re looking for.”

As part of the team managing such a project, it can be challenging, but Davila remains calm. “It’s really basic – you want to hear everyone out,” he says. “Most often, that’s what they’re looking for.”

It also helps to take shareholders’ concerns seriously, even if they’re not major. “Just recently, in one of the snowstorms, we were outside all day [shoveling],” Davila recalls. “There was a shareholder who was really nervous because she was traveling the following morning, and she was concerned that her walkway would not be [cleaned] in time for her to leave. We assured her not to worry – all the guys got together and made sure that her path was pretty clear and that she made it out okay in the morning. She did make it to her flight, and when she got back she was glad, very happy.”

It’s that accommodating attitude that Davila tries to instill in his staff as well. “We always encourage everybody to behave with the utmost courtesy and professionalism,” he says. “Some shareholders can be very difficult to deal with, and sometimes our guys don’t have that kind of patience, but we always tell them that if it’s getting a little bit out of your capability of dealing with it, please, give us a call. We’re always around, and we can take it from there. We don’t have too many, but we do have our share of shareholders who are hard to satisfy.”

Although Davila wants his staff to feel comfortable coming to him with problems, he doesn’t enforce a strict hierarchy. In fact, it’s the opposite. “I’m always encouraging whoever wants to learn as much as you can, not just your job description,” he says. “Just try to learn a little bit of everything. Be prepared so if that moment ever arises, you’ll be ready.”

 

Subscriber Login


Ask the Experts

learn more

Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

Source Guide

see the guide

Looking for a vendor?