After paying rent for over 20 years, and with everything in sight (except my building complex) being converted into co-ops and condos, I decided in 1991 to invest in home ownership. and purchased a condo in Queens. It was in a property built as a coal and ice factory in 1903, lying dormant for many years, and consisted of apartment buildings, duplexes and townhouses, totaling 64 units. Even the parking spaces were sold as condominiums. It eventually became evident the property suffered many structural and construction defects. Eventually, we sued the sponsor over this, and the board accepted a first settlement offer as payment in full for all defects.
Big mistake. About four years ago, with almost no money left, the condo was close to bankruptcy.
After thousands of dollars in assessments and the attempted firing of our two building workers — an action our bylaws actually prohibit — many of my fellow owners and I realized drastic change was necessary to save our condo. I joined a slate of fellow owners that swept out the five-member board at our annual election. The new board, consisting of some very talented owners, elected me president. Our task, as I saw it: restore financial stability.
To that end, we felt it was very important to secure outside funds instead of continuing to use our fellow owners as cash cows. With the help of our new managing agent, we implemented the following, some of which had already been started:
We rented air space. We secured a mobile phone company cell site on one of our roofs and immediately began receiving an annual rental fee of $35,000, with a 30-year contract. Later, we secured a second cell-phone site on another roof, also for a 30-year rental but at a higher rate.
We sold air space. Then, we received an offer to purchase one of our cell sites. We sold the first one and received almost a quarter-million dollars, while we kept the second site and its income-flow.
We installed energy-efficient bulbs and boilers. As our flow of income increased, we wanted our expenses to decrease. First, we replaced every light in the common areas, courtyards and lobbies with energy-efficient bulbs. Over a two-year period, we replaced all four of our boilers, as well as our four water heaters, with state-of-the-art computerized equipment. In one year, we reduced our fuel and energy expenses by almost 40 percent.
At present, we have taken care of all needed repairs and upgrades to our property as well as our day-to-day expenses. Our common charges have been raised only five percent in the past two years, and we have invested almost $200,000 in bank CDs and our reserves. To my mind, this shows that condo boards should look for outside income instead of relying on their fellow owners for every dollar. (P.S. We just received an offer of over $300,000 to purchase our second cell site, which we refused.)
I am now applying the same procedures to another condo I purchased upstate and which is facing a similar financial situation. I am serving on that nine-member board for a three-year term and am the board parliamentarian. We have already reached out to some phone companies, and they are considering our condo (eight buildings, 456 units) for cell sites on our roofs.
Here's hoping success will follow me there, providing, in Yogi Berra's famous phrase, "déjà vu all over again."
Adapted from Habitat January 2009. For the complete article and more, join our Archive >>