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How 865 UN Plaza Pulled Off a Logistical and Financial Coup

Paula Chin in Board Operations on April 19, 2019

Turtle Bay, Manhattan

UN Plaza I

The facade and parapets at 865 UN Plaza needed major work.

April 19, 2019

When Leonard Barish became the managing agent at 865 UN Plaza in 2016, he spotted trouble right away. The red-brick facade of the 16-story pre-war luxury condominium in the Turtle Bay neighborhood was in need of serious repair. “There had been a long history of poor maintenance, and major work was needed,” he says. “Frankly, it was a mess.” 

Barish was dreading the project because the condo posed a vexing logistical problem: roughly half of the 87 unit-owners – a mix of United Nations employees, professionals, lawyers, and investors – live out of town or overseas, and reaching them was often impossible. 

“I certainly didn’t know that was the situation going in,” says Barish, whose company, John B. Lovett & Associates, had taken over from the building’s sponsor, Samson Management. “When we first started sending bills out, we didn’t hear back from a lot of people, and they ended up owing six to eight months in common charges. I had to go through their representatives or the brokers who managed the apartments and constantly bombard them with emails. Finally, little by little, we got hold of people and got the money.” 

Last fall, with a Local Law 11 report looming, the condo board, which had recently completed a $600,000 roof replacement, turned its attention to the deteriorating facade by hiring an architectural company to do an inspection. The results – and the estimated $1.5 million price tag for needed repairs – came as quite a surprise. 

“Leonard had warned us in advance that Local Law 11 was going to be an issue,” says Dr. Akhilesh Singh, an ophthalmologist who joined the board in 2015. “We knew from the roof job that the parapets and pointing needed work, but not to that extent [recommended by the architect]. Our annual meeting was coming up in November, and we had to inform the unit-owners and prepare them for the shock.” 

In the meantime, the board and management started focusing on how to fund the massive project. Lovett’s controller reached out directly to banks and was able to get a proposed seven-year construction loan for the full amount. Even so, the logistics were daunting. With so many owners living abroad, the odds of getting the two-thirds vote required to approve the deal looked slim. What’s more, the sponsor, who owned more than a dozen apartments, still held considerable sway. 

To no one’s surprise, the count came up far short, with only 40 percent of unit-owners giving the go-ahead for the construction loan. That’s when the five-member board made a savvy move. “Instead of closing the meeting, we simply adjourned for a month,” says Barish. “That bought us more time to figure out a way to somehow get the loan down so we could get the votes.” 

Coming Monday: How the condo board found success by going to Plan B.

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