Newsletter #148    Acrobat file    Return to archive    Newsletter #150

350 BLEECKER STREET CO-OP NEWSLETTER #149
January 28, 2002

The board met on January 3, 2002. Among the issues discussed:

OFFICERS

Laura Herbert was unanimously elected President. The board thanked Susan Kim for her work as President for the past 2 years. Here is the list of officers:

Al Del Vecchio, Vice President, 212 243 3890, Apt 5L, adelvecchio350@yahoo.com
Laura Herbert, President, 212 645 1746, Apt 5U, lherbert1@nyc.rr.com
Keith Hutchinson, Vice President, 212 229 0536, Apt 4U, khutchnyc2@yahoo.com
Jim Kafadar, Secretary, Apt 6E, jameskafadar@yahoo.com
Susan Kim, Vice President, 212 242 7919, Apt 6R, susankim@compuserve.com
Mark Lilien, Chairman, 212 929 4619, Apt 3E, marklilien@juno.com
Marylou Moravec, Treasurer, 212 727 7014, Apt 4E, mmor1020@aol.com

BUDGET

Three shareholders wrote comments about the budget. The board is reviewing the comments.

REAL ESTATE TAX REBATES - 2001 and 2002

In about a week, Tudor Realty, the managing agent, will issue a letter to all shareholders about real estate tax issues, after consultation with the co-op's attorney and CPA.

SECURITY

A camera was installed in each elevator and in several other places around the building. The images are recorded, and some are shown on the security channel 77 on Time Warner cable TV. The cameras were installed as a response to the laudnry room theft and several incidents of vandalism. When crimes occur, the recordings are given to the police.

Apartments for Sale

350 Bleecker Street Apartment Corp
2001 Actual
($ in 000’s)
Unaudited: Based on Managing Agent's financial statements*

*Ken Newman was managing agent through 1/31/2001. Tudor Realty was managing agent after that.

Notes:

(1) Maintenance and assessments are below budget because Ken Newman's January accounting records show an underpayment.

(2) Due to the city's fiscal calendar, real estate taxes are unknown at budget time, so an estimate is made. The co-op challenges its assessment every year.

(3) According to our CPA, Ken Newman did not pay $13,814 of legal expenses in 2000 so this amount was paid in 2001. The amount was unknown at budget time because Ken's books seemed in disarray. There were unanticipated legal expenses relating to water damage caused by 102 Charles Street.

(4) Audit fees were substantially higher than planned because the audit took an extra 7 months due to difficulties with Ken Newman's records.

(5) $10,901 of the overage appears in the January records of Ken Newman. This amount is being audited and may actually relate to the previous year.

(6) According to our CPA, Ken Newman did not pay $13,447 of utilities in 2000, which had to be paid in 2001.

(7) Construction was overbudgeted approximately $100,000 because AM&G was paid most of its holdback in 2000 not 2001. Additionally, AM&G refused to install new air conditioner grills and sleeves for $34,000.

Major construction costs were approximately:

February 14, 2002


TO:          All Shareholders
FROM:        Mary Frances Shaughnessy
             Tudor Realty Services Corp.


This is a summary of the co-op's tax rebate situation:

I.    In November 2000, the previous managing agent (Ken Newman) received the
      rebate notice, but he didn't pass the credits back to the shareholders
      via a maintenance credit.  Instead the money was simply added to the
      co-op's funds in 2001.  The board assumed that the previous managing
      agent followed the requirements of the law and the procedures of other
      managing agents.  Because the board was unaware that the rebate had
      been included in the building's bank account, the budget assumed the
      funds were available to spend on the building.

II.   The error was discovered by Tudor Realty in January 2002, after the
      2002 budget was finalized, when the CPA did his tax calculations.

III.  The board could credit the rebate towards maintenance fees, but then
      the maintenance would have to be raised by an identical amount, so the
      net effect would be no change.  Instead of doing this, the board passed
      an assessment approximately equal to the rebate.

IV.   Since the sponsor (Ken Newman) is not entitled to any rebate, he will
      have to pay the assessment, but there will be no further money paid by
      any other shareholder.

V.    The 2002 rebate is being credited to each shareholder, through June
      2002.  Your next Tudor statement will show the details.

VI.   People who pay by computer will start to get monthly Tudor statements
      starting March 1.

Are shareholders getting gypped because they are not getting the 2001 rebate 
credit directly?

No, because the money is being spent on the building as part of its regular
budget.  No one is gypped, because the maintenance dollars are needed.  The
expenses would be the same whether the money is collected from the 
shareholders directly or partially collected from the City.

Here are the details:

We have recently been made aware of the fact that the coop tax abatements 
issued by the City and the STAR abatements issued by the State for 2000-2001 
were never distributed to the shareholders of your building.

I would like to explain what these abatements are, and describe the normal
procedure for distribution. The City Council and the State Legislature have
mandated that the City redress the inequality of tax assessments between
single family homes and coops and condos. While the City decides how to do
this through the tax rolls, there has been a "temporary" abatement given to
individual shareholders. 2001-2002 is the sixth year of the abatement
program, which has been approved through 2003-2004.

The STAR abatement is a program by the State to give to all homeowners a
rebate on the state school taxes. Each homeowner is eligible to receive one
rebate for his or her primary residence (this abatement is not per apartment,
but per family).

The information from the City regarding the abatements is forwarded to
managing agents in November of the tax year. It is normal practice to give
out these rebates starting in January. Last year's abatement (2000 to 2001)
was sent to your former managing agent in November, 2000. When Tudor Realty
Services took over management in February, 2001, the previous managing agent
did not turn over the abatement-related documentation and did not bring this
issue to our attention.  Furthermore, the accounting records supplied by the
previous managing agent appeared to be in disarray, which ultimately lead the
board to refrain from issuing interim financial reports and required the CPA
firm delay the completion of the audit until September.  As you know, the
records were in such disarray that ultimately the audit could not be
certified.


We did not notice this issue until now because it is our practice at Tudor
Realty to deal with the rebate issue each January. In fact, those
shareholders who are eligible for the STAR abatement received a credit this
year (for 2001 to 2002) on the January maintenance bill, and credit for the
coop abatement is being given from January through June.  Shareholders who
pay by computer received the credits in February, and will also get the
credits through June.

It was not until we received the tax deduction letter from the accountant 
this year that we realized that last year's abatements (2000 to 2001) were 
never distributed.

Since the board was not informed of this issue by the previous managing
agent, when setting the coop's 2002 budget the Board did not take into
account the distribution of last year's (2000 to 2001)  tax abatement. In
order to return these funds to shareholders, the maintenance would have to
increase by another 3.8%. Instead of increasing maintenance to all
shareholders, the Board decided to follow a practice followed by many other
coops in the City.

The Board approved an assessment of $3.00 per share, an amount approximately
equal to the 2000 to 2001 tax abatement. For all shareholders except the
sponsor (who is not eligible for the abatement), the assessment will be
offset by last year's (2000 to 2001) abatement, resulting in no further out-
of-pocket cost. Since assessments must charged to all shareholders, the
sponsor will be required to pay the coop $12,126. A few shareholders will
receive a credit for slightly more than $3.00 per share for 2000 to 2001, due
to the way the City does the calculation.

This method was reviewed by the co-op's attorney and CPA.  I communicated the
situation to the appropriate City agency to be sure that the actions taken
would be acceptable.

The abatement/assessment for last year (2000 to 2001) will appear on your
March maintenance bill, in addition to the credit for this year (2001 to
2002).

Starting late February, shareholders who pay by computer will receive monthly
statements. Unless you see an error, there is no need to respond to these
statements, since the payments are made by computer.  If you do see an error
or have a question, please contact me.

If you have not signed up for the STAR abatement, you should go to the City's
web site, www.nyc.gov, for information and application forms.

If you have any questions about these matters, please do not hesitate to
contact me at 212 557 3600 or mfs@tudorrealty.com.

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