Carol J. Ott in Legal/Financial on April 22, 2020
Congress is on the verge of adding more than $300 billion to the Paycheck Protection Program, which provides forgivable loans to small businesses if they keep employees on payroll. So far, co-ops and condos have been ruled ineligible for these loans. Habitat spoke about the program with Rob Chasen, a co-op board treasurer, attorney Geoffrey Mazel, and Paul Vallone, a member of the New York City Council representing northeast Queens.
Rob, could you start by telling us where your co-op stands today in terms of your retail tenants, building staff and financial challenges due to the pandemic?
Chasen: We're a co-op on the Upper West Side with four commercial stores. Retail has been challenging in recent years to begin with. More than one of the stores has had some trouble, and we lowered the rent last year. We renegotiated with one store to help them stay in business. When the COVID-19 situation hit in March, three of our stores closed. The fourth, a bodega, told us his business is off by 50%. So only the bodega paid rent on April 1st, the other three have not paid because they're closed by the governor's order.
Our commercial tenants represent more than 25% of our revenue. So, effective April 1st we made an assessment, a temporary increase to maintenance, spread over the next 12 months of 7.5%. That represents three months of commercial rent. I think we'll be lucky if this is only an impact of three months. Budgets were already tight. We had to raise maintenance much higher than usual last year to make up for that one commercial tenant whose rent we lowered to help them stay in business.
How much staff do you have, and are they all still working?
Chasen: We have six full-time staff. We've kept them all full time, and we're grateful that they're working. They're wearing masks and practicing distancing.
Has your property management firm applied for the Paycheck Protection Program for your building staff?
Chasen: Our managing agent reached out to us very promptly when the CARES Act was newly passed, and we approved applying for PPP. But the guidance from the Council of New York Co-ops and Condos (CNYC) was that they did not think residential co-ops were eligible. So on the advice of our accountant and our managing agent and CNYC, we did not apply.
Geoff, what are the legislative blocks to co-ops and condos getting this benefit?
Mazel: After conferring with various professionals and legislators, we came to the conclusion that the program clearly does not include co-ops or condos. So the Presidents' Co-op and Condo Council, which I am counsel to, turned to the congressional delegation from Queens. We turned to our state and city officials. One of my first calls was to Paul Vallone, who can explain to you exactly what he undertook to try to help the co-op world out.
Vallone: When Geoff reached out, we immediately put all of Queens together. We’ve gotten 25 of the 51 city council members to sign on to our resolution calling on the president and the federal government to include residential co-ops and condos in the next round of funding so they can apply for those payroll loans.
We have our first remote hearing, which the council will do twice a month, on Wed., April 22. I'm trying to have this resolution voted on, which is not binding. But if we can at least show the governor and the president that our entire New York City Council, representing over 8.2 million people, is asking for this, you would think somebody would listen. We have always been left out of the conversation. We can't be left out anymore.
Engage, enrage, ask questions and give answers with your community of board members. Submit your questions and comments here!
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
A free digital resource for co-op/condo board directors. Published twice a month. Read now on all digital devices.