Sometimes, innovative ways to solve problems and save money come from the unlikeliest sources. Consider a 425-unit co-op in Yonkers that was facing a major dilemma: the only way in and out of the property was a roadway and 50-year-old bridge that were both deteriorating and in need of replacement. The work simply had to be done.
“It was going to be a major expenditure,” says the co-op’s property manager, David Amster, president of PLI Management.
So the board did the obvious thing. It hired an engineer to assess the best way to proceed. He did the work and came back with an estimate of $2.5 million to repair the roadway and rebuild the bridge. The news was bad, but not catastrophic.
“Fortunately, the co-op had refinanced (its underlying mortgage) about four years before,” says Amster, “so it had $2.5 million to $3 million in the reserve fund.” Since the board was reluctant to decimate its reserve fund on a single capital project, Amster says, “the project was going to be financed partially from reserves and partially from an assessment.”
Along comes the light bulb moment from an unlikely source.
“While the contractors were bidding on the project,” Amster recalls, “one of them said it might be more cost-effective to get rid of the bridge, fill in the space, and make it an actual roadway.”
The board was intrigued, but skeptical. “Because this was coming from a contractor,” Amster says, “the board then hired a second engineer to get an opinion. The board took a leap, and at a cost of $40,000, the engineer designed a plan to rebuild the structure as a roadway rather than as a bridge. The low bid for construction was about $1.7 million.”
Lesson learned. “The biggest lesson is to listen,” Amster says. “If we hadn’t listened to this contractor who had another idea, the board would probably be into a $2.5 million job rather than something substantially less expensive. The board was open to ideas. We didn’t know if it would work or not, but the members were willing to fund a new engineering study to see if there was an alternative.”
Sometimes boards have to spend money to save money. And sometimes they have to listen to unlikely ideas from the unlikeliest sources.
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