Monday, March 30, 2009

More property owners filing tax appeals

New York Post
March 30, 2009 --

The city's Tax Commission has been swamped with appeals this year from major property owners hoping to lower their tax bills, The Post has learned.

Officials said 44,488 appeals were filed by owners of apartment, co-op, condo and office buildings, up 5.6 percent from the 42,106 filed last year.

"It's a substantial increase," said Tax Commission President Glenn Newman.

Typically, only the largest property owners have the resources -- and the financial incentive -- to file appeals.

Last year, for example, only 1,389 of 699,809 small-home owners challenged the assessments by the Finance Department, which form the basis for tax bills on the city's 1,015,968 properties. Comparable figures for small-home owners this year weren't available last week.

The odds of winning are long.

In Manhattan last year, just 2,500 of 18,830 challenges were successful. So the appeals numbers tend to stay flat from year-to-year.

The Finance Department's tentative assessment roll, issued in January, lags behind the market by a year, which explains why it increased the value of office buildings by an average of 7 percent even as prices were falling.

In an appeal, owners can present updated income and expense data through the end of the year.

"When the market is rising, most real-estate operators would not complain about that," said one official. "This year, it's a different story. If your tenant was Lehman Brothers, you probably have a good chance of getting a reduction."

One lawyer who handles appeals said owners of hotels and department stores, which have easy-to-document records of being caught in the economic downturn, have strong cases for reductions in their assessments.

Sunday, March 29, 2009

Seniors fined for talking in the lobby of their Staten Island condo are given a room to chat in

Staten Island condo moves chirping seniors to yap of luxury
BY Christina Boyle
Sunday, March 29th 2009, 4:00 AM

A group of Staten Island seniors really have something to talk about now - they won the right to kibitz after a condo tried to ban their evening chats.

The five retirees - who range in age from 66 to 90 and have two Purple Hearts among them - were slapped with $25 fines for shooting the breeze in their complex lobby.

They refused to back down, threatening legal action to protect their right to free schmooze.

"We didn't smoke and we didn't drink and all that jazz but they didn't want us in their lobby," said Leroy Tepper, 81, a member of the "Fined Five Seniors."

"We weren't going to stand for it."

The group argued they rarely gathered later than 8:30 p.m., were not raucous and mostly sat around reminiscing about friends, children and, sometimes, politics.

The condo said neighbors complained they were too loud.

"It clearly states in the rules, no loitering," Cheryl Ruiz, who manages the Elmwood Park II condominium, told the Staten Island Advance.

But after the men consulted a lawyer about the fines, managers at the upscale condominium building relented.

They agreed to give the guys a vacant studio to use as a meeting spot from 7 p.m. to 9 p.m. nightly

"We're satisfied. We would prefer to stay in the lobby but life isn't that way," Tepper said.

"We have a facility that is warm, we have a facility that is comfortable."

Their new after-dinner chat spot has a bathroom, kitchenette, a table and foldup chairs.

The men had their first rendezvous there Friday and said they had no complaints.

"We enjoyed ourselves," Tepper said.

"We talked about when we played Johnny on a Pony when we were kids. We can't do it now because of our age and handicaps."

Some of the residents were happy to see the Fined Five have a room of their own.

"This is pure hogwash," Maureen Hernandez, 30, said of the ban on loose lips in the lobby.

"They're a lovely bunch of gentlemen," she told the paper. "There is no bad language. There are no boomboxes or beer. These are men who fought our wars for us, I don't know why they have to go through this."

Tuesday, March 24, 2009

Landlords firing doormen to cut costs

White Gloves Off?
By Oliver Haydock
March 24, 2009 | 2:54 p.m
The New York Observer

Manhattan doormen, ably trained as they are in the art of regulating traffic in and out of the city’s abodes, might want to start battening down the hatches: The economy … is … coming. In these troubled economic times, some residential building workers, who are members of the union 32BJ, are finding their services superfluous to requirements in the city, with some union members already losing jobs.

So add doormen, especially those working in rental buildings, to the list of luxury amenities that New Yorkers are no longer eager to pay for, along with rooftop decks, in-house recreational facilities, haute design fixtures and indoor swimming pools.

“Tenants are sacrificing living conditions,” Marc Lewis, the president of Century 21 NY Metro, said. “They are leaving doorman buildings and going into elevator buildings.”

Formerly the white-gloved vestige of an antiquated Upper East Side lifestyle, uniformed doormen spread during the boom to every corner of Manhattan, their most familiar habitat being the new-development building in Manhattan. But because of falling rents and increasing vacancies, landlords are looking at tighter balance sheets, and that just might mean a thinning of the ranks in the doorman brigade.

So far in 2009, 32BJ, which also represents cleaners, porters, supers and security guards, has implemented approximately 70 workforce reductions, which is roughly the same amount as in all of last year.

Troubles in the market for doormen rental buildings were evident as early as last February, when this very column noted that “Manhattanites are ditching doorman buildings.” A year and several economic crises later, and you can only imagine how things have worsened. From September 2007, around the time the rental market peaked, to February 2009, mean rents for apartments in doorman buildings plummeted faster than anything this side of Citi stock.

In the span of 17 months, rents on doorman-building studios fell by 15 percent; rent for doorman-building one-bedrooms dropped 13 percent; and rents for doorman-building two-bedrooms slipped 9 percent, according to statistics from the Real Estate Group New York.

According to that firm’s COO, Daniel Baum, landlords of doorman buildings are more vulnerable to a slumping real estate market. “At luxury buildings or doorman buildings, they have to take aggressive action,” Mr. Baum said. “Because of their added costs, they have more exposure to vacancy rates.”

It’s no surprise, then, that landlords and management companies might be looking for ways to cut costs, especially since the crashing rents are accompanied by a major reduction in demand and a startling rise in vacancy rates. (Or is it the other way around?)

If less people are paying rent at reduced prices, something has to give. According to Phil Whalen, a principal at Key Real Estate, a real estate firm specializing in property management, landlords are starting to negotiate staff reductions with 32BJ. One landlord, who wished to remain anonymous, has indicated that the union is more willing to negotiate staff levels than in the past.

Unlike non-union workers, the union salary is set in stone—at least until the next round of contract negotiations—so payroll cuts invariably mean job cuts. Members of 32BJ make $18.94 an hour, which translates into $757.60 for a 40-hour work week and a little less than $40,000 in annual salary; employers are also on the hook for about $1,080 in quarterly benefit payments, which include health care, pension payments and other expenses. And it’s getting harder to cover those expenses, according to Mr. Whalen, who is especially concerned about underwriting health care costs.

According to Matt Nerzig, the director of communications for 32BJ, the union is paying close attention to the situation. Unlike, say, the UAW, layoffs and staff reductions haven’t been a fact of life for 32BJ.

“We’ve been unaffected by layoffs for a long time, but they really seem to have started in recent months,” Mr. Nerzig said. So far, most of the staff reductions have been concentrated in Brooklyn and Queens, and whether they jump the river and start becoming prevalent in Manhattan remains to be seen.

Sunday, March 22, 2009

Bonuses are a liability for building boards

There’s a Problem With Your Application
A fat bonus used to help with the co-op board. Now it’s a liability.

* By S.Jhoanna Robledo
* Published Mar 22, 2009

For years, Halstead Property’s Richard Grossman has run a boot camp, teaching agents how to get buyers approved by co-op boards. In it, he presents four hypothetical applicant profiles. The first is a professional—a teacher, perhaps—with an average income but an outsize down payment. The second is a bonus-dependent candidate like a banker, who makes $80,000 and is putting down the minimum, but has a bonus three times his salary. The third, a non–Wall Streeter, earns somewhere in the low six figures and has a small bonus and a standard down payment, and the fourth, a first-time buyer with a good job, relies on relatives to cobble together a decent down payment.

In the past, says Grossman, agents invariably picked the financier as the most board-worthy, thanks to his bonus. At last month’s seminar, however, the answers were unanimous: “Go with the teacher.” And that is a big change. “If you were bidding against someone from Wall Street who had this kind of bonus history, you couldn’t compete. First of all, they were willing to outbid you, and second of all, the sellers were willing to take them over somebody else,” says Gumley Haft Kleier president Michele Kleier. “Bonus used to be the favorite word in everybody’s vocabulary. Now salary is a much more attractive word.” Admits one Upper West Side board member: “We’re definitely cautious across the board now, especially when someone’s touting their bonus.”

In the pre-Lehman days, many boards grew to regard bonuses as standard parts of compensation, as reliable as anything else in the financial package. “If your stream of bonuses was steady for several years, you could anticipate that your bonus was going to be equal to or exceed what you got the last two years,” she says. “The boards would look at that and basically count it.”

“We’ve always advised people to be cautious and to look at assets and salary, not just bonuses,” says Mary Ann Rothman of the Council of New York Cooperatives & Condominiums. But well-funded portfolios alone aren’t enough, says Grossman, who has sat on two different boards. Investments should be diverse, too. “Stocks in conservative [companies], not in financial institutions,” he says. “They want to see diversity, especially after the Madoff thing.” Some boards are actually asking prospective buyers still awaiting interviews for updated financials, in case their situation has changed since the stock market fell.

The intense scrutiny can be frustrating for both buyers and sellers needing to unload properties fast, but lawyer Stuart Saft says “boards generally feel they have a fiduciary duty to the existing shareholders to make sure they’re not taking any risks.” If that means nixing someone with an acceptable bid who can’t pass beefed-up standards, so be it. Fair Housing laws prohibit discriminating against entire employment classes, but experts say boards aren’t stereotyping; they’re being financially prudent. “No one’s being given a hard time because they’re in finance,” says Saft. “They’re given a hard time because they don’t have adequate liquid assets with which to pay for the apartment.”

Boards struggle with environmental issues

Co-op and condo board politics have become even more fraught as environmental issues have entered the equation. Energy and green committee members have started lobbying their neighbors to approve environmental projects like solar power for their buildings. At the 244-unit River Arts co-op in Washington Heights, some residents are advocating the building's investment in solar power, while other residents are worried that the co-op won't get back its initial investment in the green initiative.

The New York Times: It’s Not Easy Turning Co-op Boards Green