White it’s tempting to kick the repair can down the road and spend as little money as possible now, it often doesn’t pay off. The board at the Morningside Gardens co-op in Upper Manhattan faced this very dilemma and chose to take it head on.
The 968-unit co-op had a Safe With Repair and Maintenance Program (SWARMP) in place from Cycle 8 of the Facade Inspection & Safety Program, formerly known as Local Law 11. With the filing for Cycle 9 looming on Feb. 21, 2023, Morningside Gardens faced a major decision: go cheap or go big? “The idea is that by doing the work for both cycles now, we’re saving millions of dollars by not having to put scaffolding and sidewalk sheds up twice,” says Tiana Leonard, who has served on the co-op board for six years and is now president.
That far-sighted decision will save the co-op upwards of $4 million, according to the co-op’s engineer, Chris Krepcio, a principal at Merritt Engineering. “Most boards put things off and let future boards deal with it,” Krepcio says. “The Morningside Gardens board understood that by spending now, they’re saving money long-term.” The SWARMP repair cost $10.3 million, so the “don’t kick the can down the road” savings of $4 million was significant.
“The tricky part was getting the board to understand that there were additional brickwork repairs that would be flagged on the 9th Cycle,” Krepcio says. “They took advantage of having the sidewalk sheds and scaffold already in place from the 8th Cycle, and they decided to go ahead and do the 9th Cycle work now.”
The work was paid for without an assessment or maintenance increase. “We’re fortunate to have a large capital reserve fund,” Leonard says. “We’re also fortunate that we refinanced our underlying mortgage in 2020, when interest rates were still low. And since this co-op went from limited-equity to market-rate, we’ve had a transfer fee that’s now 15%.”
Krepcio, who also served as one of three project managers, met with the board monthly. Many of the 60 balconies on each of the six towers were enclosed, which gives shareholders additional interior space. Those enclosures had to be dismantled, then reassembled after the railing and surface repairs were completed. “Where some of the railings went into the concrete slab, we had to chop away old concrete and replace it,” Krepcio explains. “We were able to scrape, repair and repaint the steel railings, which saved us some money.” Railings also had to be added to the top of the bulkhead on each tower roof, which supports mechanical equipment.
Of course, there were surprises. “But when changes came up, we were able to talk things through with the board and get things accomplished,” Krepcio says. “This is an action-oriented board.”