Marianne Schaefer in Bricks & Bucks on June 12, 2019
The learning curve has been steep at the Island House, a 400-unit property on Roosevelt Island that began life as a Mitchell-Lama rental in 1975 and converted to a co-op about four years ago. From scratch, the fledgling board had to learn how to run a corporation, and former renters had to learn what it means to own a piece of that corporation – the freedoms and the constraints that come with this unique form of home ownership.
“They had to catch up fast with every other co-op,” says the Island House’s property manager, Steven Greenbaum, senior vice president and director of property management at the Charles H. Greenthal Group. “A huge amount of capital projects had to get up and running very quickly.”
A driving force behind that flurry of capital projects – and the education of the shareholders – has been the co-op board president, Amrah Cardoso, a native of Brazil who is keenly attuned to the building’s diversity. “One of the most challenging things is that we have a very large international population,” she says. “They all have the experience of their own country. There they can do a lot of things inside their apartments that one cannot do in a New York City co-op.”
The co-op’s international flavor is explained, in large part, by its proximity to the United Nations. In the years before the co-op conversion, the sponsor offered deals on rent that attracted a large contingent of UN workers. Today the co-op’s diversity is economic as well as well as ethnic. “We still have many renters who are on a very fixed income,” says Greenbaum. “Then we have people who bought as insiders at a steep discount, and we have people who bought at market price. And now we have people who are buying on resale. That makes not just for people with very different incomes, but also with different wishes and wants.”
And those diverse desires have presented a challenge for the co-op board’s six members and one sponsor appointee as they’ve tackled a staggering $5 million in capital projects. These have included a plumbing upgrade, replacing a boiler, elevators and windows, installing electric sub-meters, redoing hallways and the lobby, and waterproofing the facade.
Through it all, there has been a babble of conflicting opinions and advice from the shareholders. “For instance,” says Cardoso, “some of the old timers did not want us spending money improving the lobby but instead wanted us to change the plumbing in every apartment.”
Differences of opinion also came into play when the board addressed the building’s vulnerability to drafts. Some shareholders were willing to pay for better insulation, while others did not. The board acted accordingly. “Participation in the insulation project was voluntary,” says Cardoso. “The residents paid half, and the co-op paid for the other half. Only those apartments that wanted to participate were insulated. When you have so many different kinds of residents, you have to be very flexible.”
These projects have been financed with the $5 million the sponsor gave the co-op during the conversion. The sponsor still owns about 25 percent of the apartments, and every time he sells one, he contributes a percentage of the sale to the reserve fund. Refinancing the mortgage, cutting electricity costs, and imposing a flip tax have made it possible for the board to lower monthly maintenance.
Earlier this month, Cardoso got re-elected as board president. Though the co-op still has groups that want a voice in every decision – their favored buzzword is “transparency” – Cardoso sees her re-election as a sign that most of her fellow shareholders have finally come to understand that they cannot be overseers of the board. “For me, transparency only means one thing: control,” Cardoso says. “The board is elected and is protected by insurance and legal means. These groups don’t have that, and therefore they cannot oversee the board. More and more people do understand what we’re trying to do, and that’s why four members have been re-elected who were there from the very beginning.”
The board, led by its four-member majority, marches on. Up next: a second boiler replacement and a $1 million roof job.
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