Sunday, December 21, 2008

... And No Renovations in the Lobby

December 21, 2008
... And No Renovations in the Lobby
By VIVIAN S. TOY
http://www.nytimes.com/2008/12/21/realestate/21cside.html

WITH the recession taking firm hold and the number of jobs lost in New York City expected to grow by as many as 150,000, co-op boards across the city are doing what they can to help keep costs down for shareholders.

As boards determine next year’s budgets, many are opting to postpone large projects to help minimize increases in maintenance charges.

“Boards are concerned about passing along increases, and they’re taking a hard look at projects that might be discretionary,” said John Janangelo, the president of Bellmarc Property Management, which manages more than 50 buildings in Manhattan and Queens.

Dated lobbies and dowdy hallways may not get a makeover for another year, he said, and upgrades on security cameras or health clubs may also be deferred. But repairs on essential systems like air-conditioning or boilers will still be approved.

And if there is anything positive in the economy’s implosion, it’s a decrease in fuel costs. There were big spikes in energy costs in the last two years, which put maintenance increases at 10 percent on average. But maintenance increases in 2009 will probably be much lower, Mr. Janangelo said.

At 300 Riverside Drive, the co-op board made several decisions that will ultimately reduce the overall monthly bill for shareholders in 2009. “We did these things because we understand that these are difficult times,” said Jon Reiner, the co-op board president.

The building had a net gain of $500,000 when it refinanced its mortgage at a lower rate this fall, and the board initially planned to use that money to shore up its reserve fund, redesign the lobby and begin construction on a roof deck. Because of the economic downturn, the board decided to proceed with the lobby renovation but put off the roof deck.

The board also voted to use some of the proceeds from the refinancing to retire debt, which will eliminate a monthly assessment worth about 6 percent of each shareholder’s monthly maintenance. Even with a 3 percent increase in maintenance fees, shareholders will still get a 3 percent reduction in overall costs.

“In other years, we might have decided to proceed with the roof deck,” Mr. Reiner said. “But what we’re doing will be a benefit to shareholders in the tough year that we will be facing.”

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