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Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

The Gem on the Board

Growing up in Tel Aviv, Israel, where his father owned a factory, Sam Sulimanov had boyhood dreams of becoming an engineer. But after studying mechanical engineering and serving in the Israeli Air Force, he came to New York City as a young man in the early 1980s and watched his dreams take a sharp turn. Sulimanov, now 59, went to work for two of his uncles in the Diamond District on 47th Street. He’s still working there, running a precious gemstone and jewelry wholesale business.

 

One day Sulimanov hired a young woman named Sylvia to sort stones. Today she is his wife and business partner. “She used to work for me, and now I work for her!” Sulimanov says with a laugh. “Sylvia is my partner, and I’m so happy to work with her. We grew up in the business together.” Their elder daughter, Debbie, 24, works part-time in the family business, handling social media, marketing and customer service. Their younger daughter, Daniela, 21, is studying to become a teacher.

 

The Diamond District, known for its sharp elbows, is no place for pushovers. And the negotiating skills Sulimanov has honed there over the past four decades would serve him well after he moved into the 175-unit co-op at 333 E. 46th St., in the shadow of the United Nations. As soon as he moved in, Sulimanov started seeing things he didn’t like: the sponsor owned more than half of the apartments, also managed the building and, for good measure, controlled three seats on the five-member co-op board.

 

“All bad,” says Sulimanov, whose negotiating instincts kicked in. “The shareholders couldn’t do much, and banks didn’t want to lend to potential buyers. So I approached the attorney general’s office, and we reached an agreement that the sponsor would give up control of the board but would be allowed to continue to manage the building. It wasn’t ideal, but at least the shareholders had control of the board. It was the best we could achieve at the time.”

 

No Animosity

Soon after Sulimanov was elected to the board, the shareholders got another boost. In 2002, the State Court of Appeals ruled in the landmark Jennifer Realty case that a co-op offering plan is a contract and that by holding on to a majority of the shares, a sponsor defeats the purpose of that contract. Nudged by the decision, the sponsor sold more units before selling off the last of his unsold shares to a real-estate investment company.

 

Fortunately, Sulimanov says, there is “no animosity” between the investment company and the shareholders. “They do not renew rentals,” he says. “When a lease expires, they put the apartment on the market, which is good for the co-op.” Even so, the bylaws state that the sponsor is entitled to two seats on the board, regardless of how many shares he controls. So in an effort to increase owner representation, Sulimanov is now pushing to expand the board from five members to seven. “Most of the shareholders agree that we should have more representation on the board,” he says.

 

Sulimanov’s negotiating skills – and his engineering background – had just begun to shine. The 1960 building’s original rooftop water tank was nearing the end of its life, and it was agreed that it had to be replaced, a major capital project. “We got some proposals from several water tank companies,” Sulimanov says, “and I read them and realized we were not comparing apples and apples. The quality contained in the bids was not the same.”

 

At the urging of the co-op’s property manager, Neil Davidowitz of Orsid New York, the board unanimously designated Sulimanov as the co-op’s negotiator. As he entered the negotiations, Sulimanov was guided by the belief that cutting corners on quality with a long-term investment like a water tank is unwise. His goal was to get high quality at a reasonable price. “I approached the high bidder and asked him to give a quote for the same specs used by the low bidder,” Sulimanov says. “He came back with a better price.”

 

At the negotiating table, Sulimanov was in his natural element. “It’s not only my engineering background – I’m also a businessman,” he says. “I negotiate on a daily basis, locally and internationally, and that helped me. You have to know what to ask and how much to ask. You have to know the background and the mentality of the people you’re negotiating with. And you have to do it with respect. This is my experience in life.”

 

In the end, venerable Rosenwach Tank company was awarded the contract, and it recently completed installation of a new wooden tank with a stainless-steel lid that’s far more durable than a wooden lid. The quality is high, and the price was right – thanks to the skills of the co-op’s lead negotiator.

 

Now that the new water tank is in place, Sulimanov and his fellow board members – one of the shareholder members is a retired U.N. diplomat, the other is a financial expert – have turned their talents to the next big challenge: upgrading the building’s two aging elevators.

 

“The board and management, with the assistance of the co-op’s lawyer, Helene Hartig, spent a year choosing an elevator company,” Sulimanov says, adding that the process was slowed by new city regulations, changing specifications, the scarcity of available elevator mechanics and the coronavirus shutdown. “Now we’re in the final stage of signing the contract,” he says. “Just like the water tank job, it was teamwork. The upgrades should start in September.”

 

This time he’s a bit more anxious. An elevator upgrade affects the day-to-day life of every resident in a way that a water tank replacement does not. “I’ve got mixed feelings,” Sulimanov says. “It won’t be convenient with one elevator out of service in a 175-unit, 20-story building. People will just have to be patient.” This, the negotiator adds, is nonnegotiable: “We don’t have a choice.”

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