Paula Chin in Board Operations
As an accountant and director of finance and administration at SUNY-Purchase, Michael DeGrazia knows his way around a budget. That’s good news for Longacre Gardens, an 88-unit, garden-style co-op in White Plains where DeGrazia has lived for 30 years and now serves as board president.
To address looming maintenance needs, the board had to figure out a way to bolster its anemic reserve fund without imposing unaffordable maintenance hikes or assessments. Under DeGrazia’s guidance, the board contested the co-op’s property valuation, receiving a hefty $300,000 payoff from the city, as well as lower taxes that save $50,000 a year. By refinancing the mortgage, Longacre slashed its interest rate from 6 to 3.88 percent, enabling it to cash out $800,000 in equity while still reducing its monthly payments. That gave Longacre a total of $1.2 million for upgrades. At the same time, the board was pocketing $75,000 a year from reduced oil and gas prices.
With money in hand, the board began seeking out vendors for the repair projects. “We didn’t jump at the lowest bidder, but we went with the best value – we looked for the best bank for the buck,” says DeGrazia, who oversees some renovation projects at Purchase and knows the value of comparison shopping. “What you spend is what you get.”
Starting in 2013, the co-op began systematic work on the property – from big-ticket items like roof and window replacement ($400,000 each) to replacing garage doors and repainting building foundations – gradually restoring everything to prime condition.
A proactive board has been essential to Longacre’s turnaround. “Each year we’d talk about what capital improvement we wanted to do, and go through the financials diligently, always keeping costs in mind,” says Brian Scally, vice president at Garthchester Realty, who has managed the co-op since 2007. “This is a real hands-on group that does their homework beforehand, and follows up by keeping a close eye on spending until a project is complete.”
“It has taken a lot of planning and coordination,” says DeGrazia. That included sending regular notices to shareholders informing them of repair schedules and how to prepare their units for the contractors. Sometimes, they needed a little persuading, like when they balked at the board’s plan to spend $200,000 on landscaping.
“The residents didn’t always understand how the appearance of the grounds could have a big impact on sales and people’s perception of your property,” says Nancy Driscoll, the co-op’s treasurer. “We had to explain to them that we wanted Longacre to be a place you were proud to walk into.”
The co-op recently finished the re-landscaping work to rave reviews, says Scally, who notes: “Longacre is now a pristine, beautiful property and financially sound, which has kept us competitive in the area and draws in potential purchasers.” Indeed, the last three units to go on the market sold in just a few weeks at their asking prices.
DeGrazia isn’t finished. “I’m very big on aesthetics and curb appeal, so I want to upgrade the lighting, maybe by adding lanterns, and fix the irrigation systems for the lawns,” he says, “You should always be reinvesting in your property.”
The cash flow is there. Thanks to scrupulous budgeting, Longacre has now amassed an astonishing $800,000 in reserves. “I figure a complex our size should be sitting on at least $600,000 at any given time, so we won’t be spending too much at once,” DeGrazia says. Not that he’s tempted, since money management just comes naturally. “I have an identical twin brother who is president of his condo complex. So, yes, I guess you could say it’s in my DNA.”
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