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The Board met on January 10, 1995. Among the items discussed:
ENGINEER
Fred Hannaham was hired as the building's engineer. After the meeting, a contract was signed to have the following projects designed, specified, and bid--
a. complete asbestos removal,
b. new gas heating system, and
c. garage ramp repairs.
Mr. Hannaham's fee is 8% of the construction costs. He anticipates that most of the work would be done this summer, preferably commencing during Memorial Day weekend. The cost, similar to projects in other buildings, is estimated to be around $250,000.00. However, to insure the best price and service, the job will be offered to qualified bidders.
SHAREHOLDER CONSTRUCTION
From time to time, shareholders have construction done in their apartments (walls removed and added, new kitchens, new bathrooms, etc.). Any construction within an apartment must be approved in writing in advance by the Board. To protect the building's physical integrity, the Board has the plans reviewed in advance by a licensed engineer, at the shareholder's expense. As a courtesy, for most simple jobs, Mr. Hannaham's review price is $175.
NEWSLETTERS
The New York Times had an article on co-op building newsletters on January 3, 1995.* We think our Newsletter, on all counts, compares well to any other Newsletter (per the Board).
MORTGAGES
The Times also had an article on January 30, 1995, on the difficulties caused by sublets when seeking mortgages. Also attached is a letter to shareholders from a nearby building, 100 Bank Street, which is also concerned about sublets and their effect on mortgage applications. Also the Landmark's (300 East 59th Street) minutes indicate they will be restricting sublets. Ken Newman will be calling the Bank of New York on behalf of our building to see if we can qualify for their mortgage program.
______________
*Copies will be attached to the next newsletter subject to permission from the New York Times.
CASH POSITION
1995 1994 1993 1992
January 31 $148,901 $ 86,409 $ 38,084
February 28 $180,175 94,037 88,710
March 31 $212,063 131,236 124,574
April 30 $245,950 156,544 178,539
May 31 $283,157 196,654 233,455
June 30 $281,767 100,172 180,954
July 31 $324,111 159,666 133,170
August 31 $378,017 192,727 180,326
September 30 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
NOISE DISPUTES
The Board is considering changes to the House Rule relating to noise (see the attached House Rule number 5). It would be much appreciated if you would take a few minutes to fill out this survey and slip it under Mark Lilien's door (3E), or mail it to Ken Newman.
Name ________________________________ Apartment _______________
1. Have you ever been bothered by noise from a neighbor’s apartment? ____________________
How often, in the past 12 months?___________________________________
Did you speak to your neighbor(s) about it? If so, what was the result? __________
_______________________________________________________
What was the source of the noise (TV, recorded music, party, etc.)? __________
_______________________________________________________
2. Have you ever been bothered by a neighbor complaining about noise from your apartment?
_______________________________________________________
How often, in the past 12 months? ___________________________________
_______________________________________________________
What was the source of the noise (TV, recorded music, party, etc.)? __________
_______________________________________________________
What was the result after lour discussion with your neighbor? _______________
_______________________________________________________
3. Do you feel the building should have more rules regulating noise, keep the rules the same, or fewer rules about noise? ________________________________________
4. Other comments and suggestions ___________________________________
_______________________________________________________
The Board met on February 14, 1995. Among the items discussed:
SUBLET MORATORIUM
Effective March 14th, there will be a moratorium on new sublets for a minimum of 90 days. After that, depending on the number of sublets, the moratorium may be ended or extended indefinitely. Until March 14th, it is unlikely that the Board will OK any new sublets.
The number of sublets, excluding sponsor shares, is now 26. Banks that write underlying mortgages for co-op buildings generally seek buildings with less than 10% sublets, which would be 13 for our building. The Board set six months before our mortgage due date as a refinancing target date for a new mortgage. Our mortgage is due November 6, 1996, so the refinancing target is May 6th. During the last six months of our mortgage, there is no refinancing penalty.
MARKETING PLAN FOR APARTMENT SALES
To help people sell their apartments, the Board formulated a 3-part marketing plan--
FINANCING
The co-op will, if accepted, contract with The Bank of New York for a $500,000 mortgage credit line. In other words, for the next 12 months, anyone buying an apartment at 350 Bleecker Street who meets the bank's normal credit standards will be able to receive a mortgage. After $500,000 in loans are made, the bank will have no further obligation to us. The bank will finance any apartment -- even studios -- in our building. It might benefit anyone thinking of selling to list his/her apartment as soon as possible to take advantage of this arrangement before the loan fund is exhausted.
This helps sellers and buyers tremendously because most banks will not make mortgages for our studio apartments or for apartments in buildings whose underlying mortgages have less than two years to run. Of course, not all apartment sales are financed, and the buyers can always take their chances applying to other banks. This will cost the building $7,500, but the bank will refund the building 1% of all loans made, so our net cost may be as low as $2,500. Interest rates now are the same as the bank's rates to any borrowers.
BROKER DISCOUNTS
Board members Linda Jones and Mark Lilien are negotiating with two different real estate brokers to see if one will substantially discount his/her commissions when selling apartments in our building.
ADVERTISING
The "preferred broker" will be asked to contribute to an advertising fund, and will have his/her phone number listed on a tasteful sign in the lobby and in all ads. Apartment sellers will have the right to use any broker or no broker, but will benefit from reduced commissions and reduced ad costs if they contract with the "preferred broker."
The Board members believe that the marketing plan will help people who want to sell their apartments. People who are subletting their apartments right now, who have no intention of moving back, might be better off starting their marketing efforts immediately. Delay may mean that too many apartments will be marketed simultaneously, depressing prices later in the year.
SPONSOR'S APARTMENTS FOR SALE
In an effort to reduce sponsor sublets, the sponsor did not renew the sublet on apartment LE (a two bedroom apartment). That apartment and a studio (LH) are both for sale from the sponsor. The asking prices are $165,000 and $63,000, respectively. If there is any interest, please contact Ken Newman at 319-3000.
THE NEW YORK TIMES' ARTICLES
In the last Newsletter it was indicated that two articles from The New York Times would be reprinted and distributed after the Co-op obtained permission from The New York Times to do so. Those articles are annexed to this Newsletter.
APARTMENT ALTERATIONS
Planning to alter your apartment? As noted in the previous Newsletter, the Board will accept Engineer Fred Hannaham's OK on your project. Engineer Kurt Rosenbaum's OK is also acceptable. Fred's number is (718) 220-4336. Kurt's number is (914) 356-7971. Please confirm their charges before making your selection.
SAVING WATER
The Board authorized Mark Lilien to pursue changing every toilet and showerhead in the building in order to save water and take advantage of a New York City subsidy program for water-saving renovation. The City may reimburse the building for this construction and our water bills may be reduced $5,000 to $7,000 per year. Mark will work with Fred Hannaham on this project. The February Consumer Reports has a long article on this subject.
REAL ESTATE ASSESSED VALUATION
Our most recent New York City assessed valuation is $2,538,000 versus $2,539,170 last year. Many buildings' valuations declined due to the recent real estate market. Every year we challenge our assessed valuation, since we have little to lose (the attorney works on a contingency) and much to gain. So we will challenge the $2.538 million figure.
Copyright 1995 The New York Times Company - Reprinted by permission.
The New York Times January 1, 1995, Sunday, Late Edition - Final SECTION: Section 9; Page 3; Column 1; Real Estate Desk LENGTH: 1136 words
HEADLINE: YOUR HOME; Keeping Residents Informed
BYLINE: By ANDREE BROOKS
WITH home values stagnating and the market still uncertain, it may become even more important in this new year for a condominium or co-op building to assure residents and prospective buyers that it is in competent hands. One of the best ways of doing so is to circulate a newsletter. Not doing so can become an invitation to trouble. "A community that's not informed quickly becomes an angry community," warned Sabrina Bluestone, president of the Upstate New York Chapter of the Community Associations Institute, a national network of leaders in the community ownership field.
"Either you think that nothing's being done," said Ms. Bluestone, who is also controller at Emerald Management of Fishkill, N.Y., "or you begin to wonder where all your money is going and think the worst." A good newsletter can also provide support when difficult decisions -- like raising monthly fees -- must be made. "People are more understanding when they've been told all along what's happening," said Robert Huhtanen, senior property manager with Thibodeau Management in Middletown, Conn. And it can provide the perfect setting to honor and encourage volunteers. A newsletter further allows disgruntled residents to vent their frustrations without waiting for the next general meeting. "It lessens the sense of having a dictatorial board," said Arnold Zabinsky, president of Elm Management of New York City. And it can provide tenants with anupdate on house rules that may otherwise go only to unit owners. Indeed, keeping residents informed is considered so crucial at the Sequoia, a 132-unit condominium on West 14th Street in Manhattan, that it has two versions, one for unit owners only and the other for unit owners and rental tenants. The belief is that nobody can be sure the owner will pass along information on such mundane matters as, say, new recycling procedures. Newsletters that are the most fun to read tend to be written in the inclusive "we" format and also include a few personal notes welcoming newcomers along with announcements of births, marriages and anniversaries that generate a sense of community. And this sends a signal that the building is a good and friendly place to live -- useful in enticing buyers.
The New York Times, January 1, 1995
While most boards may realize all of this in theory, it is not so easy to put such a basic communications tool into regular use.
Too many newsletters start out with gusto only to wilt and die as soon as the volunteer in charge burns out -- and that may take no more than a matter of months. "It's a tremendous amount of work," said Anita Konfederak who started a monthly newsletter in August at Park City III and IV in Rego Park, Queens, an 1,100-unit co-op. The initial aim was to correct communication problems between the residents and the board. She has since enlarged its scope to cover all topics of interest to its residents. But she has a full-time job and is beginning to feel the burden of her volunteerism. Perhaps that is why no more than half of all common-interest communities operate a newsletter at any one time, according to industry estimates. Still, experience suggests there are ways of insuring a newsletter's endurance. The communities with the longest-surviving newsletters, the experts say, have divided the work between a volunteer (usually a board member) and the professional manager, who normally takes over production at no extra charge. The board, through the volunteer, decides what it wants included. Sometimes only the raw data is provided by the association with the items written by the manager. At other times, it prefers to write its own text. In either case, the management company will shoulder the mechanics of formatting the text and making it look attractive. It will also take care of distribution, usually using staff. "The client just pays the printing costs," Mr. Huhtanen said, noting that two-thirds of his company's 135 clients have signed up for this particular service.
Ms. Konfederak, for example, is already planning to turn over makeup and distribution to professional management. "I'm not going to let it die," she said. Larger associations with greater resources might prefer to hire a company like Community Ink of Truckee, Calif., which specializes in putting out association newsletters. Its fees for creating the graphic design, printing and distribution start at $600 an issue and vary according to the amount of work needed and the size of the association. The text is sent in by mail, fax or modem from associations as far away as Florida. This level of service makes the most sense when the newsletter contains advertising, since advertisers tend to demand a more professional look before committing their dollars. And revenues can be used to offset the additional cost. The frequency of publication can also have a bearing on longevity. Conventional wisdom suggests that a newsletter should appear once each month. But is there really that much news generated in four weeks? For example, when the Sequoia started its newsletter two years ago it automatically went onto a monthly schedule. But it was soon straining for news.
The New York Times, January 1, 1995
Changing to a more intermittent schedule (on average about four times a year) made it easier to produce, board members said. It also seemed to enhance readership. The Sequoia also found that keeping everything brief and limiting the newsletter to two sides of one page improved readership. Readers also respond positively to lively graphics, according to Ms. Bluestone of the upstate C.A.I. chapter. She uses Clipart programs with vast selections available on CD-ROM for under $40 a disk. When entering the pictures electronically becomes too difficult, Ms. Bluestone said, she simply photocopies the drawings directly from the pictorial manual that accompanies these programs. She also recommends collecting humorous drawings and cartoons from other publications that, upon request, can normally be reproduced without charge. And she favors periodic changes of the color of the paper or the print, also easily done these days, she said, by changing the color of the cartridge in the photocopier. It is worth noting that advertising has proven a mixed blessing. While it obviously offsets production costs, it seems to work well only on a long-term basis when someone is paid to handle the ads, the experts say. Otherwise it ends up as just another responsibility that can overwhelm even the most ardent volunteer. For more information try the booklet: Communications for Community Associations (GAP report #15) from the Community Associations Institute. $14.50 nonmembers; $9.50 members. Also, "You Can Do It (Association) Newsletter Kit," which includes templates and camera-ready art. $49.95 members. $54.95 nonmembers. Call C.A.I. at (703) 548-8600 for both.
The Board met on March 14, 1995. Among the items discussed:
SUBLETS
In place of the "moratorium" on sublets, the following rule was adopted:
RESOLVED, that the Board in determining whether or not to renew or grant its consent to sublet apartments shall consider as a significant factor the total number of sublets in the building and the effect of such sublets on the ability to refinance the cooperative corporation's mortgage on the best available terms.
PREFERRED BROKER
Waverly Real Estate agreed to be preferred broker for one year. They will reduce their commission to 4% from 6%. Another broker, claiming to be the preferred broker, sent letters to certain shareholders, but this was an error. Of course, any shareholder can use any broker or no broker to sell an apartment in the building.
Waverly reduced their commission in exchange for the right to have their name listed in the lobby and in a handout routinely distributed by the doorman to people browsing in the neighborhood. Waverly will pay for ads in The New York Times and Village Voice for apartments listed with them. They have sold apartments in the building in the past, and appear to be a stable, neighborhood firm. Their phone number is (212)929-5552. Ask for Marilyn Mathios.
BEST LAWYER
Our President, Ken Newman was mentioned in last week's New York Magazine article entitled "The Best Lawyers in New York." We knew it, having his counsel for many years.
RADIOS
The building staff will receive two more walkie-talkies. They cost about $650 each, and will be on the same frequency as the radio used by the doorman. This frequency is monitored by the police. The radios will improve security and help our staff be more productive. Much time is spent by staff members routinely searching for each other for mutual help.
GARDENING
$2,000 was allocated for gardening, including some new benches for the roof. The Garden Committee will, in the near future, call a meeting of everyone interested. Virginia Canino, Mark Lilien, and Anthony Prestipino volunteered to be on the Garden Committee.
NEW TOILETS AND SHOWERHEADS
Several Board members volunteered their bathrooms to be test sites for the new toilets and showerheads. Fred Hannaham was hired for the engineering (and supervision and bidding) work for $6,000.
WINDOW GUARDS
It is a strict law that everyone in the building must respond to the official New York City Health Department Window Guard questionnaire every year. The City is trying to minimize injuries to children falling from open windows. Whether people have children or not, the City insists on an annual answer to its survey. Rifat Otovic and the doormen will ask everyone who has not replied so far to respond. Otherwise, the Managing Agent will have to institute eviction proceedings.
INSURANCE
Certain forms of insurance on our building also benefit the Sponsor. When the Sponsor's benefits cost extra, the Sponsor is charged. When the Sponsor benefits, but there is no extra charge by the insurance company, the co-op charges the Sponsor nothing. This rule was adopted by the non-Sponsor Board members.
The building is discussing its coverage with the insurance company. Two engineers acting independently appraised the building at $10 million. The insurance company's appraiser set the value at $8.33 million which provides coverage of $7.5 million after co-insurance. the Managing Agent is appealing the lower figure.
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 $212,063 131,236 124,574
April 30 $245,950 156,544 178,539
May 31 $283,157 196,654 233,455
June 30 $281,767 100,172 180,954
July 31 $324,111 159,666 133,170
August 31 $378,017 192,727 180,326
September 30 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
The Board met on April 11th and May 9, 1995. Among the items discussed:
HOUSE RULE CHANGE
House Rule 5, which addresses excessive noise problems, was replaced. Every shareholder and tenant will receive a copy of the replacement in person or by certified mail. The new rule is effective immediately.
The building's attorneys analyzed judicial decisions related to noise issues in New York City buildings. Based on their analysis, the old rule was too vague. Almost all noise issues in the building have been resolved without resorting to the courts, but the co-op is involved in one court case, and the Board wants to have as little litigation as possible. If a rule is too vague, then the judge is unlikely to resolve the issue(s) raised. The Board regrets the need to make this type of rule. Luckily, court action on the noise issue is very rare.
The new rule doesn't have any effect on the current court case. When it is fully resolved, the Newsletter will summarize it. Until then, our attorneys have advised that the Newsletter not outline the details.
BOARD MEMBERSHIP CHANGES
Anthony Prestipino, Board member since October, 1993, resigned. The other members expressed their appreciation and thanks for his work. Kimberly Minarovich (3C) was elected to serve as a replacement. Her work number is (212)688-6840 and her home number is (212)633-9574. Her fax is (212)838-3393. Kim has lived in the building since October, 1994. She works in investor relations.
Linda Jones, a five-and-a-half year member, will be moving to the Midwest in a few months and resigning from the Board. If you are interested in applying for her seat on the Board, please call 319-3000, and ask Shirley Lomanto for an application. Feel free to ask any Board member if you have questions about what it is like to be a member, what the meetings are like, the time commitment, etc.
GARDEN
The Garden Committee (Rifat Otovic, Helen and Jack Katz, Virginia Canino, Victor Bastante and Mark Lilien) met, planned, purchased, fertilized, and planted. The front of the building received several forms of ground cover that are evergreen (baltic ivy, pachysandra, purple wintercreeper, vinca). The roof received two plum trees and numerous flowers. The back yard received flowers, too. Further work remains to be done (roof bench replacements, more bushes, etc.) If you are interested in helping, please talk to anyone on the Committee.
APARTMENT SALES
In the past couple of months, sales activity rose substantially. Three (3) apartments are under contract for sale (a 2-bedroom, a 1-bedroom and a studio). Ken Newman has two 2-bedrooms for sale ($165,000 and $230,000), one studio with a terrace ($150,000) and a one bedroom apartment with a terrace ($200,000). The terraced apartments have great views. Shirley Lomanto has a 1 bedroom for sale ($140,000). Call 319-3000 for details. Linda Jones (516-288-1406) has an "L" shaped studio for sale. If you have an apartment for sale, and want to list it in the Newsletter, please slip a note under Mark Lilien's door (3E).
FINANCING PROGRAM: The building's financing program with Bank of New York (BONY) is now effective. Sellers, particularly of harder-to-finance small apartments, may want to condition mortgage contingency provisions on an application to BONY. Speak to Ken Newman if you have questions.
EXERCISE
Dennis Saunders (929-3231) would like to form a daily exercise group in the building. If you're interested, please call him.
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 459,076 $212,063 131,236 124,574
April 30 $245,950 156,544 178,539
May 31 $283,157 196,654 233,455
June 30 $281,767 100,172 180,954
July 31 $324,111 159,666 133,170
August 31 $378,017 192,727 180,326
September 30 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
REVISED HOUSE RULE #5 ADOPTED MAY 9 1995
(ANNEX TO EXISTING HOUSE RULES)
That Article (5) of the House Rules is deleted in its entirety and the following is substituted in lieu thereof:
(5).1. Subject to the provisions hereof, no Lessee shall make or permit any disturbing noises in the building or do or permit anything to be done therein which will interfere with the rights, comfort or convenience of other Lessees.
(5).2. No Lessee shall play upon or suffer to be played upon any musical instrument or permit to be operated a Sound Machine (as defined in the following sentence) except during the following hours:
Monday through Thursday, 9:00 A.M. through 9:00 P.M.,
Friday 9:00 A.M. through 10:00 P.M.
Saturday, noon through 10:00 P.M.
Sunday, noon through 10:00 P.M.
Legal Holidays, noon through 9:00 P.M.
if such musical instrument or Sound Machine shall disturb other occupants of the building. A "Sound Machine" is collectively defined as follows:
(5).2.1. Phonograph, radio, television, video tape player, audio tape player, CD player, or computer; or
(5).2.2. Any electronic or mechanical device with or without a loud speaker which is designed to reproduce or amplify sound; or
(5).2.3. Any other device or appliance that makes noise, even if making noise is not its primary purpose.
(5).3. An apartment which was created by combining one or more apartments shall be considered one apartment for the purposes of this House Rule #5.
(5).4. Anything contained in this House Rule #5 to the contrary notwithstanding, this House Rule shall not be deemed to prevent a Lessee from operating one or multiple musical instruments or Sound Machines simultaneously if by nature and design 100% of the noise remains contained in the apartment from which such noise emanates. Such containment measures may include but shall not be limited to the use of headphones or acoustical installations.
(5).5 Notwithstanding anything to the contrary (except as provided in paragraph (5).4. above), in no event shall:
(a) noise exceed 45 decibels (including ambient street noise when the windows are closed) as heard in another Lessee's apartment, except during construction pursuant to an alteration agreement entered into between Lessor and Lessee,
(b) more than one musical instrument or Sound Machine be operated in any one apartment at one time.
(5).6. If a Lessee advises the Board in writing that such Lessee is being disturbed by noise emanating from another apartment, then the Board shall attempt to mediate the dispute, if any. If the mediation fails, the complaining Lessee may hire an engineer to measure the alleged noise heard in the complaining Lessee's apartment. Costs of the engineer shall be at the complaining Lessee's expense, except if the Board, in its sole discretion, elects to reimburse the complaining Lessee. Reimbursement of such fees is contingent upon the Board's determination of the following factors, in addition to such other factors as the Board may deem relevant:
(5).6.1. that these House Rules have been violated;
(5).6.2. that mediation has failed; and
(5).6.3. further legal action is necessary to resolve the dispute.
The Board may then take such legal action, which, in its sole opinion, it deems most appropriate.
(5).7. No construction or repair work or other installation involving noise shall be conducted in any apartment except on weekdays (not including legal holidays) and only between the hours of 9:00 A.M. and 6:00 P.M., except if specifically authorized in advance in writing by the Board.
(5).8. If any provision, paragraph, or subparagraph of this Rule is adjudged by any court of law to be void or unenforceable, in whole or part, such adjudication shall not be deemed to affect the validity of the remainder of the Rule, including any other provision, paragraph, and subparagraph. Each provision, paragraph, and subparagraph of this Rule is declared to be separable from every other provision, paragraph, and subparagraph and constitutes a separate and distinct rule.
The Board met on June 13th and July 11, 1995. Among the issues discussed:
CONSTRUCTION CONTRACTS
Fred Hannaham, our engineer, presented competitive bids for asbestos removal, boiler replacement and repairs to the garage ramp. The Board voted to accept the bid from JH Loewy for boiler replacement and asbestos removal. The bid from Viking to repair the garage ramp was also accepted. Both bids were the lowest qualified bids submitted in their respective categories.
JH Loewy will remove the asbestos from all the pipes in the basement. They will remove the boiler, install a new boiler, a hot water heater and hot water tank. The boiler will be used to heat the building and its domestic hot water during the winter. The hot water heater and tank will be used during the summer months, while the boiler is shut off. Boiler repairs will no longer require building residents to forego hot water. The new boiler will be "dual fuel," burning gas or Number 2 oil, whichever is less expensive. In addition the new boiler will eliminate costs resulting from an inefficient system and from excessive repairs and maintenance. The hot water heater will burn gas. Con Ed will increase our gas supply to make these changes possible.
Our present boiler burns Number 4 oil only. Number 2 oil is often slightly more expensive, but burns more cleanly, and will not separate in the storage tank over long periods, like Number 4.
The JH Loewy contract will cost the building $193,810. The Viking contract (to resurface the concrete ramp and make structural steel repairs) is estimated at no more than $60,000, based on test borings conducted a few weeks ago. Repairs are necessary as a safety measure because the structural steel has corroded.
The garage will be closed for about 2 weeks while the construction takes place. Ken Newman will negotiate an interim arrangement with the garage operator. Everyone concerned will do their best to complete all construction before the heating season begins this fall.
Toilet replacement bidding has not yet ended. Volunteers will have their present toilets removed and new test toilets installed. If you want to volunteer, please slip a note under Mark Lilien's door (3E). Every showerhead in the building will also be replaced. By this action the building will take advantage of the City's program to provide abatements to cover costs and assist in the effort to conserve water while further reducing our water bill.
APARTMENTS TO BE COMBINED
The Board provisionally approved 2 more apartment combinations, subject to certain legal and architectural filings. Apartment 3E and 3D may be combined. Apartment 3G and 3H may also be combined. The Board also agreed upon a procedure to value the hallway space outside 3E and 3D. Mark Lilien may offer to buy that space from the co-op, and make it part of the combination of 3E and 3D.
The hallway space will be appraised professionally, and the Board may negotiate with Mark Lilien over its sale price. Based on the appraisal and possible negotiations, a sale may or may not take place, since it is up to both parties concerned.
Note that Mark Lilien, although a Board member, did not participate during the voting on the issues relating to his purchase of 3D, combination of 3E and 3D, or hallway purchase procedure. Furthermore, he left the room during the discussion of these issues, and did not see the vote take place. He will not participate in choosing the appraiser or setting a possible hallway price, either.
APARTMENTS FOR SALE
Virginia Canino, 627-2842, has listed her alcove studio for sale (LC). It has a sunken living room.
EXTERMINATOR
The Board is searching for a new exterminator. Bids are being taken by Ken Newman.
BASEMENT VENTILATION
Numerous experiments have shown that the dryers in our laundry room function better when the exit door to the Bleecker Street stairwell is open. As a result, the Board voted to install a lockable gate ($900-Paragon Locksmith) in the basement hallway. Air will flow to the laundry room through the gate while the door is left open without creating a security problem. The gate lock will be operable using the regular front door Medeco key.
ANNIVERSARY PARTY
Our building's 10th anniversary as a co-op takes place July 31, 1995. Party plans are in the air!
UTILITY REFUNDS
Ken Newman will contract with a consulting firm to have our utility bills examined. If the firm finds errors in our favor, the building will split the proceeds with them. If they find no errors, they will not be paid.
AIR CONDITIONERS
Need a new air conditioner that will fit our building's through-the-wall sleeves? It appears that the best fit is Emerson. The sleeves came with Welbilt air conditioners, but that company no longer exists. Recent experience indicates that 12,000 BTU 208 volt models work best, and 10,000 BTU 115 volt models are the best alternates. One Emerson dealer used by numerous people in the building is Kitchens Etc. at (718) 352-8818.
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 459,076 $212,063 131,236 124,574
April 30 490,310 $245,950 156,544 178,539
May 31 517,706 $283,157 196,654 233,455
June 30 487,841 $281,767 100,172 180,954
July 31 $324,111 159,666 133,170
August 31 $378,017 192,727 180,326
September 30 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
The Board met on August 8, September 12, 19 and 23, 1995. Among the issues discussed:
EXTERMINATOR
Terminex was hired in place of the previous service company. Board members were not happy with the previous company's effectiveness.
CONSTRUCTION
Asbestos was removed from the old boiler and the basement pipes. The old boiler was removed, and the new gas hot water heater was installed. Con Ed installed additional gas capacity, which required the sidewalk and street excavation. Three steel beams supporting the garage ramp were replaced, as well as the ramp drain. The new boiler is still under construction, but the work is almost complete. The crew is working night and day to finish before the steam heating season begins. The new boiler will use number 2 oil or gas, whichever is more economical. Both fuels are cleaner (less soot) than number 4 oil used by the old boiler.
Until the new boiler is fully operational, the complete piping and control mechanisms cannot be finished. For example, the recirculation pump, which helps equalize the hot water temperature throughout the building, hasn't been installed. As a result, people on the upper floors have hotter water than people on the lower floors.
Construction work on the heating system and garage ramp continues around the clock because Board members decided that the inconvenience was outweighed by the impending beginning of the heating season and the urgent need to correct the unsafe garage ramp. Removal of the ramp concrete clearly showed severe corrosion at a few key stress points.
APARTMENT PURCHASE RULES
The requirement for liability insurance for new owner-occupants was dropped. The requirement for all papers to be submitted for an apartment purchase was shortened to three business days before an interview.
ELEVATORS
Steve Tilchin and Albert Sarno from Millar Elevator discussed their company's performance. Certain Board members were disappointed in Millar. The issues included sticky brakes, a fire possibly caused by a Millar employee's error, dirt spread by Millar employees, and weekend response times.
The Board informed Millar that their predecessor lost our business due to similar issues. Millar representatives submitted an improvement plan. Within a few days, one car's brakes and motor were rebuilt. Millar is paid $743.33 monthly as a flat fee to cover most parts and labor.
BOARD CHANGES
Linda Jones resigned from the Board. She sold her apartment and moved to Ohio. The other members thanked her for her years of service. The Board interviewed two people who would like to replace Linda, and decided to interview a third candidate before making a decision. Virginia Canino, expecting her apartment to be sold, resigned from the Board. When the sale terminated she was reappointed to the Board.
Bob Mishkin resigned as Treasurer and was appointed Secretary. Linda Jones had been Secretary. Al DelVecchio was appointed Treasurer.
MORTGAGE
The building's $3,000,000 9.75% interest-only underlying mortgage is being refinanced. The Board directed that an application be filed for a new, 10 year $3,500,000 35 year amortization mortgage. The loan will be fixed-rate, set at 1.75% above the 10 year US Treasury Note interest rate on the day the application is accepted by the bank. For example, on October 3, 1995, the New York Times reported the 10 year rate to be 6.13%. In the past few days, the rate has fluctuated from roughly 6.1% to 6.3%, so the Board expects the fixed rate to be approximately 8%.
The loan would amortize as if it was a 35 year, self-liquidating level-payment loan, but the 10 year time span would mean that approximately $3,070,000 would be owed on the last day of the mortgage. Board members considered over a dozen different combinations of amortization rates (including no amortization), interest rates, loan life spans, and loan amounts. Several different mortgage brokers and banks were consulted, and the Board members debated the alternatives at several different meetings, as well as informally among themselves. The mortgage issue was debated in tremendous detail with great passion over many hours, by phone and face-to-face.
Among the questions considered:
a. Why refinance now?
In spite of the prepayment penalty imposed by our $3,000,000 mortgage, interest rates have been fairly low lately. The majority judged that the building should take advantage of today's lower rates rather than take the chance that the same rates or lower rates would be available during the no-prepayment
penalty period (the last six months of the mortgage). For example, a year ago the 10 year Treasury Note rate was 7.6%, almost 1.5% higher than today.
b. Why $3,500,000?
The extra funds will be used to help pay the prepayment penalty, the loan-related expenses, and further construction. For example, the engineer suggests we replace our street-facing window sills and repair our brick pointing. This project is estimated to cost at least $400,000.
c. Why 35 year amortization?
The majority of Board members felt it would be prudent to pay down some of the principal over the 10 year period. The majority did not feel it would be prudent to pay more than approximately $430,000 because it would tend to increase maintenance fees and reduce the tax-deductibility portion of the fees. Principal payments (amortization) are not tax-deductible.
d. Why have a 10 year loan?
Certain members felt that it wouldn't be prudent to "lock-in" for too long. Furthermore, 10 years is a very commonly available time length for this type of loan, so rates are competitive. Loans of greater length have higher interest rates.
e. Why is there a pre-payment penalty?
Housing loans for individuals cannot have pre-payment penalties, per New York State law. But underlying mortgages for co-op buildings are considered commercial loans under the law. Commercial loans of this type usually have prepayment penalties.
f. What are the costs associated with our refinancing?
Estimated costs will be: Legal (our attorney) $7,500 Legal (bank's attorney) $8,000 Environmental, Engineering and Appraisal Reports $9,500 Mortgage Broker $35,000 Prepayment Penalty $100,000+ New York Mortgage Tax NONE Mortgage Insurance $10,000
g. Will the new mortgage lead to a maintenance increase?
Our current mortgage payments are $292,500 per year. The interest rate on a new mortgage is not yet set, but at 8% the payments would be about $300,000 per year. Our annual budget is about a million dollars, so the $8,000 difference is less than 1% of the total budget.
SUBLETS AND UNSOLD SHARES
Right now there are 17 sublet apartments, down from a high of 26 earlier this year. Two of the sublet apartments are alleged to be illegally sublet. The Board has taken legal action to rectify both situations. Often this type of legal action requires many months to resolve itself. Should the Board prevail, the legal fees are payable by the shareholders. Should the shareholders prevail, the legal fees will be paid by the building and/or its insurance company. The mortgage holders of alleged illegally sublet apartments are notified of the situation, as a matter of contract.
Certain shareholders have requested that they be exempt from the sublet limitation guidelines. Board members have studied each case, but have not yet granted any exemptions. The majority of the Board is concerned that it would be unfair to grant some exceptions and deny others.
The Sponsor has 46 apartments, down from 48 at the end of 1994. Four of the Sponsor's apartments are vacant and for sale. The Sponsor announced a policy of selling his vacated apartments, instead of rerenting them. The Sponsor's tenants are usually covered by the rent stabilization law, so their leases are usually renewed when they expire. Sponsor tenants not legally entitled to lease renewals have the choice of purchasing their apartments or moving.
Three apartments are owned by other investors, whose legal status is called "Holders of Unsold Shares". "Holders of Unsold Shares" ("HU's") are allowed to sublet their apartments without the Board's permission. They may also sell their shares without the Board's permission. HU shares must have their status specially designated in writing.
However, once an HU sells his/her shares without a designation or for occupancy, those shares automatically convert to "Sold Shares" and are subject to the regular Board rules. If an HU moves into his/her apartment, his/her shares automatically convert to "Sold Shares".
Our building has 137 apartments originally. Many banks will not make individual mortgages for buildings whose owner-occupancy is less than 51%; other banks have even higher owner-occupancy requirements. In our case, 70 apartments would have to be owner-occupied. Right now, 74 (not counting Unsold Shares) apartments are owner-occupied.
MOVE-IN AND MOVE-OUT DEPOSITS
Before moving in or out, $500 is required as a damage deposit. Damage to the building by move-ins and move-outs is fairly common. Recently, some sublet tenants refused to post $500 move-out deposits. As a result, the Board voted to retain the $500 move-in deposits of sublet tenants until after they move out.
APARTMENT SALES
More apartments were sold in 1995 so far than in several other years in their entirety. And 1995 still has over two months to go. This is a list of every apartment sold so far in 1995. Apartments in contract as well as apartments whose sales closed are listed. Note that this is not private information. It is a list given to every mortgage appraisal company. Apartment prices vary based on many factors, including location, renovation work, negotiation skills, broker involvement, timing, mortgage interest rates, and luck.
Apt. Size No. of Apts. Sold Price Range Per Share Studio 6 (1)* $571.42-$675.32 One Bedroom 2 (1)* $984.84-$1,007.69 Two Bedroom 2 $1,089-$718.23 *Figures in parenthesis indicate sales in contract but not yet closed.
WINTERIZING
Air conditioners are a prime source of drafts. To stop drafts, some people tape clear plastic over the front of their machines ("Frost King", available at many hardware stores). Some people buy an insulated cloth cover, which is lined with foam insulation taped to the machine ("Endraft" by Jebb Products of Brooklyn, available at Home Depot, about $15). Some people use an insulated hard plastic cover that clips to the interior wall around the air conditioner ("Chill Stop R", available at Grainger, about $50).
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 459,076 $212,063 131,236 124,574
April 30 490,310 $245,950 156,544 178,539
May 31 517,706 $283,157 196,654 233,455
June 30 487,841 $281,767 100,172 180,954
July 31 475,477 $324,111 159,666 133,170
August 31 461,193 $378,017 192,727 180,326
September 30 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
AIR CONDITIONER PROBLEM
A lobby apartment's air conditioner would not function properly due to an unusual physical obstruction. The Board OK'd a window unit for that particular apartment.
HALLWAYS
Electric Connection was hired for $700 to upgrade the hallway and lobby electrical service so the floor cleaning machine can work without tripping the circuit breakers. The hallways will be touched up by Stone Services, the painting contractor, at a cost of $1,400.
THE BANK OF NEW YORK
The Board voted to allow shareholders to tap this credit line for refinancings as well as apartment sales.
GARDENING
Anthony Prestipino, Mark Lilien, Helen Katz and Jack Katz have been planting anemone, crocus, hyacinth, iris, and tulip bulbs. Anthony and Mark bought over 500 bulbs for about $100. Only about half have been planted so far, so if you would like to help, please contact any of the four people listed above.
Edible fruits grown this year included 4 grape varieties (all with seeds), apples, 1 peach, tomatoes, strawberries, and blueberries. The fig trees gave figs, but they were small, immature, and inedible.
APARTMENTS FOR SALE
For a one bedroom on the first floor, facing south, call Virginia Canino at 627-2842.
Please call Kenneth Newman at 319-3000 for any of the following:
(1) Large studio with terrace, facing south.
(2) Large one bedroom with terrace, facing north and west, with view of the Empire State Building.
(3) Two different two bedroom apartments (one is next door to Virginia Canino's, for potential combination).
The Board met on October 10, 1995. Among the issues discussed:
ANNUAL MEETING - November 14. 1995
The meeting will start at 7:00 P.M. in the Exercise Room. Please bring a chair. Shareholders will hear a report from the Board, discuss the issues, and elect a new, 7-person Board. Any shareholder may run for a position. Regardless of how many shares a board member owns, she/he has only 1 vote at a board meeting. Refreshments will be served.
Past annual meetings have included discussions about physical improvements to the building, the sublet policy, mortgage issues, the budget, noise situations, lawsuits, and many other topics. Past board elections have ranged from over a dozen candidates to as few as 7 candidates. Each shareholder may vote for up to 7 people. There is no cumulative voting. The number of shares is the number of votes. In other words, if Mr. and Mrs. Shareholder own apartment 3Z which has 200 shares, their ballot for 7 candidates counts as 200 shares of the 17,202 share total for the building. The 7 candidates with the most votes are elected and assume office immediately for 1 year. Candidates usually nominate themselves at the annual meeting. In past years, most board members have run for reelection.
Generally the Board meets twice a month. One meeting is the second Tuesday of the month at 7:00 P.M. for 3 or 4 hours, and the second meeting is usually late in the month for an hour. Each board m-ember has individual responsibilities as well, undertaken during the month. Individual responsibilities in the past have included such tasks as negotiations with real estate brokers for discounts, purchasing supplies, mediating neighbor disputes, interviewing mortgage brokers, negotiating with cable TV firms, gardening, supervising construction, etc. The officers (President, Vice President, Treasurer, Secretary) are elected by the Board members immediately after the annual meeting. If you have any questions about what it is like to be a board member, please feel free to ask any current board member.
NEW BOARD MEMBER
Cynthia Spry, apartment 4H/4J, was elected to the board, filling the vacant slot created by Linda Jones' resignation. The Board interviewed 3 candidates for the open position, and thanked the 2 candidates who were not immediately elected. The unelected candidates may be tapped at some future time, since vacancies commonly appear during the year, usually due to apartment sales.
Cynthia's home phone is (212)627-4787, and her fax is (212)691-1682. Her voice mail number is 800-595-0200 Ext. 7808. She has lived in the building (Apartment 4J) since December 21, 1992, and owns 2 apartments. Cynthia works as a clinical education consultant to hospitals for Johnson & Johnson. She is a nurse, author of a nursing textbook, and former head of the National Association of Operating Room Nurses.
INTERCOM
Out intercom will get a $950 upgrade. The upgrade will reduce problems due to short circuits. Right now, when 1 apartment's intercom shorts out, it shuts off the entire building. After the upgrade, a single apartment's short will only shut off about 10% of the building. If your intercom is not working properly, please slip a note under Mark Lilien's door (3E).
CARPET REOUIREMENT
From now on, people moving in will not receive their $500 move-in deposit back until their carpeting is OK'd by a board member. Noise issues are a frequent problem, and this change may reduce carpet installation delays.
RENOVATIONS
When a shareholder desires to pursue a construction project, the project must be OK'd in advance by the Board. After that, the shareholder pays for a professional evaluation by either Alexandr Neratoff (architect) or Fred Hannaham (engineer). As construction unfolds, it is inspected during and after by either Alex or Fred. Alex and Fred represent the building's interests. They confirm that the design and the work is done legally to professional standards that do not jeopardize the building's structure.
Any shareholder is free to hire any architect, engineer, contractor, or other construction professional to design, bid, supervise, and/or file her/his project as long as this firm or person is property licensed, insured, and OK'd by the Board in writing in advance.
Certain shareholders want to hire Fred or Alex directly to bid, supervise, and/or file their work. This creates a possible conflict of interest. So the Board decided to allow direct hiring of one, but to require the evaluation done by the other. For example, if Ms. Shareholder hires Alex to design her new bathroom, then Fred would be hired by the Board (Ms. Shareholder reimburses the co-op for Fred's fee) to evaluate the project.
PURCHASE INTERVIEWS
Until now, the Board interviewed purchase candidates only after all pre-sale actions were completed, including contract negotiation and signing, mortgage approval (if needed), and purchase application completion. Finishing all these steps can cost the purchaser and seller legal fees, bank fees, and time delays. If the Board rejects the purchaser, this can be very painful to all concerned.
For a 90 day pilot period, the Board will interview purchase candidates as before, but there will be an alternative, if the seller desires it. The alternative procedure requires the purchase application, but does not require a signed contract or mortgage commitment. It is hoped this will make it easier to buy or sell an apartment with less risk and delay. If the pilot runs well, this may be extended well beyond the 90 day pilot period. The Board will evaluate the pilot at the January board meeting.
WATER TANK REMOVAL
Our recent construction project included the removal of our water tank. The tank was so corroded that it was unusable, and was not utilized for at least 20 years. This space is about 10 feet by 25 feet, and is being considered for use as storage space and/or additional bicycle space for shareholders.
CONSTRUCTION
The Board voted to install an RPZ system on the building's water lines. An RPZ protects the city's water supply from any possible backflow from our building. RPZ's are required by state law for new buildings. Installing the RPZ allows us to chemically treat our new boiler's steam water, which will measurably lengthen the new boiler's life. The chemical treatment reduces corrosion by adjusting the PH. Fred Hannaham estimates the RPZ cost at $38,000 to $44,000. These prices are not firm until bids are taken.
REAL ESTATE BROKERS
Any shareholder may use any licensed real estate broker (or no broker) to help sell an apartment. Several months ago, the Board made an agreement with Waverly. Its major terms were:
(1) Waverly would charge 4% instead of 6% to 350 Bleecker shareholders.
(2) Waverly would advertise and market apartments.
(3) Waverly would get its name on a sign and on brochures shown and distributed in the lobby.
The Board decided to evaluate Waverly's marketing effectiveness and this arrangement and possibly look for another broker. Alfred Del Vecchio and Robert Mishkin volunteered to champion the effort to search for another broker.
UNDERLYING MORTGAGE
After getting bids from 2 other attorneys, the majority of the Board voted to hire Kenneth Newman for $7,500 to do the legal work associated with a new $3,500,000 mortgage. A11 3 firms bid $7,500, which was compared to the bank's probable legal fee of $8,000 (which is also paid by the co-op, but the choice of firm is up to the bank). Kenneth Newman was not present during the Board's consideration of this item, nor was he present for the vote.
Most of Ken's legal work on behalf of the building is done at no cost to the building.
CONFLICTS OF INTEREST
When a board member wants to sell an apartment or is the sole individual involved in a given item for board consideration, he or she is asked to leave the room during interviews, discussion, and voting. This is not required by the law, but has been pursued as an ethical policy by our board for at least 7 years. Many other co-op boards do not have this policy.
For example, at a recent meeting a purchase candidate was interviewed for an apartment owned by Linda Jones. Linda did not attend the interview and was not present for the discussion or vote. Many other co-op boards would have allowed Linda to be present for the interview and discussion, and she would have voted.
WATER
Sometimes our tap water is discolored, usually light brown. This is caused by accumulated rust, usually from pipes in the streets, shaken from construction work in the street.
GREENMARKET
Where Bleecker meets Hudson Street, at Abingdon Square, there is a farmer's market on Saturday mornings. While this market is smaller that the one at Union Square, some of the prices are excellent, and there are no crowds. Recent selections have included terrific tomatoes, many other vegetables (tomatillos, squash, purple and white potatoes, peppers), apples, melons, flowers, fish, and eggs. Much of the produce is organically grown.
HEALTHY NEIGHBOR
Beth Israel Hospital has a free membership program, "Healthy Neighbor". Members get free flu shots, free classes, and other free services. To join, call (212)420-4247. When flu shots were first invented, they contained live flu viruses, and certain people got the flue from receiving the shots. The serum used today contains no live viruses. Although flu shots are suggested for elderly people, almost anyone can benefit from them. The flu is very dangerous to certain non-elderly people, and who those individuals are cannot be predicted in advance. Mark Lilien's father died from the flu at 50. Of course, everyone should check with her/his doctor on a decision like this.
EXTERMINATOR
Any tenant may ask the exterminator, while he or she is at the building during the normal monthly visit, to treat any room, closet, or cabinet in an apartment. The treatments are not limited to 1 or 2 rooms per apartment. If you have a complaint or suggestion about the exterminator, please call Shirley Lomanto at 319-3000. A good time to call is while the worker is still in the building, so that your suggestion can be implemented immediately.
FOR SALE
Christine Pagano's alcove studio (kitchen in the alcove) 3A is for sale. Call her at (516)286-4264.
For a one bedroom on the first floor, facing south, call Virginia Canino at 627-2842.
Please call Kenneth Newman at 319-3000 for any of the following:
(1) Large studio with terrace, facing south.
(2) Large one bedroom with terrace, facing north and west, with view of the Empire State Building.
(3) Two different two bedroom apartments (one is next door to Virginia Canino's, for potential combination).
INDIVIDUAL MORTGAGES
Interest rates are fairly low right now, so people might want to refinance. Furthermore, apartment sellers may find it valuable to help their purchasers find financing. Among the current alternatives:
(1) The Bank of New York -- Our building has a credit line which can be used for purchases and refinancing. This program is currently under review by the Board.
(2) Credit Unions -- There are 12,000 credit unions in the US. There are over 500 in New York. Some have outstanding deals. For example, the Actors Federal CU offers loans at 5.25% with only 1 point. Any member of Lincoln Center Theater (212-239-6277) may join this credit union, not just professional actors. Lincoln Center membership costs about $35 per year, and is deductible. The AFCU membership fee is $1. For a list of every federally insured credit union, send $15 to National Credit Union Administration, 1775 Duke Street, Suite 4206, Alexandria, Virginia 22314-3437, telephone (703)518-6540. Once you are a member in a credit union, you cannot be removed from it, even if you no longer are a member of a sponsoring organization. And many credit unions automatically will enroll relatives of their members upon request.
(3) FNMA Community Home Buyer -- People earning less than about $69,000 per year may qualify for FNMA Community Home Buyer mortgages. For a list of every bank in New York offering these loans, call FNMA at (800)732-6643. These loans often require lower down payments combined with easier credit requirements.
(4) Mortgage Brokers -- Sometimes a mortgage broker can find a better bank deal than a person who directly approaches a bank. For example, one shareholder who recently bought an apartment directly approached NatWest Bank and was turned down. He hired a broker, who approached NatWest and got approval. If you would like to know which brokers have recently helped our shareholders, please ask a board member. Generally, mortgage broker fees are paid by banks, not borrowers. Most mortgage brokers work with 1 or more banks, but no mortgage broker works with all banks.
(5) HSH -- This service costs about $35. Their phone number is (201)838-3330. They will mail or fax a list of several dozen mortgage sources each week, including the terms and interest rates.
(6) Seller Financing -- Sometimes the seller offers the purchaser a direct loan. For example, the seller may offer a loan of 80% of the purchase price, to run at 8% for 5 years, interest only. This loan would give the purchaser 5 years to find alternative mortgage financing. It gives the seller interest income and sometimes, a faster sale.
(7) Retirement Plans -- Many annuities and other retirement plans allow participants to borrow from their own accumulation to buy housing. The interest rate is often very low. A typical plan allows loans for housing at 7% and 5% is credited back to the participant's account, so the net cost is 2%.
APPLICATION FORMS
The Board is studying a new version of purchase and sublet application forms, suggested by the Real Estate Board of New York. The goal is to make the forms clearer so that the information is likely to be more accurate.
NYNEX
Each apartment has only 2 potential phone numbers, because the building was wired for telephone service over 30 years ago. Certain apartments require more than 2 numbers, so the phone company "borrows" a line from a neighboring apartment. NYNEX asked the Board for permission to rewire the building to allow for more phone numbers. Kenneth Newman and Mark Lilien were appointed to negotiate the rewiring agreement with NYNEX.
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 459,076 $212,063 131,236 124,574
April 30 490,310 $245,950 156,544 178,539
May 31 517,706 $283,157 196,654 233,455
June 30 487,841 $281,767 100,172 180,954
July 31 475,477 $324,111 159,666 133,170
August 31 461,193 $378,017 192,727 180,326
September 30 410,117 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
CORRECTION
The schedule in the last Newsletter was incorrect. The correct schedule appears below:
Apt. Size No. of Apts. Sold Price Range Per Share Studio 7 (1)* $571.42-$965.90 One Bedroom 3 (1)* $976.56-$1,007.69 Two Bedroom 2 $718.23-$1,089
*Figures in parenthesis indicate sales in contract, with co-op approval, but not yet closed.
HAPPY HALLOWEEN!
During major neighborhood events, our lobby attendant is paid to stay until dawn. These events include: Halloween, Gay Pride Parade and New Year's Eve.
The Board met on October 30, 1995. Among the issues discussed:
BANK OF NEW YORK
our understanding was that this bank would lend to shareholders at competitive interest rates. We paid $5,000 to reserve a $500,000 credit line. In the opinion of the Board, however, the bank's rates were not competitive so we asked for a refund of the $5,000 fee. Kenneth Newman negotiated this refund. One shareholder borrowed money via this program. If this shareholder desires to refinance, the Board and Kenneth Newman (as Managing Agent) will waive any fees associated with his refinancing.
UNDERLYING MORTGAGE
A previous Newsletter contained details about the underlying mortgage refinancing. After that issue was distributed, further negotiations took place with the National Cooperative Bank. Certain details changed, and the bank's official commitment is now finalized and signed by all parties concerned.
The principal is still $3,500,000. The loan will run 10 years from the closing date. Amortization is still 35 years. Interest rate will be fixed at exactly 7.82%, which is 1.8% above the 10 year Treasury rate on the commitment date. The building paid a $15,000 fee to hold this rate until May 1996, when the mortgage will begin. After the commitment was finalized, the bank reported its hedge of the interest rate cost it $52,500 and claimed it undercharged the cooperative corporation by $37,500. The situation is under review by the Board and Kenneth B. Newman is negotiating with the bank.
In May 1996 our current mortgage's prepayment penalty ends. By paying the $15,000 fee to the new bank, we will avoid paying over $120,000 to DBS Bank, our current lender. This prepayment avoidance was negotiated as a result of Kenneth Newman and Mark Lilien's exploration of ways to reduce interest fluctuation risk. A Senior Vice President of Smith Barney Shearson was consulted, as well as several mortgage brokers.
The interest margin was originally quoted at 1.75% not 1.8%. The difference is $1,750 per year. When compared to the prepayment penalty elimination, this may appear reasonable.
Estimates of the charges associated with the mortgage have changed:
Item Was
(or would Now
have been)
Legal $7,500 $7,500
Bank attorney $8,000 $8,500
Environmental, engineering and
appraisal reports $9,500 $9,500
Mortgage broker $35,000 $35,000
Prepayment penalty $120,000 $0
New York mortgage tax $0 $0
Mortgage insurance $13,750 $10,000
Interest rate lock $0 $15,000
Total $193,750 $85,500
The mortgage is still subject to certain requirements. Among them:
a. we have to pass the bank's environmental and engineering inspections,
b. our 1996 budget must be OK'd by the bank,
c. the number of sponsor/investor apartments may not rise, and
d. we must become members of the bank to save the mortgage tax of $13,750. Membership costs $35,000. Generally 1/2 of this amount ($17,500) is returned within one year. The balance is repaid during the term of the loan. On loan termination another $35,000 is remitted to the co-op.
We have already paid $94,500.00 in various deposits and fees towards the new mortgage.
PURCHASER FINANCIALS
Occasionally the Board interviews or reinterviews a prospective purchaser whose financials may appear borderline. From time to time, in order to facilitate the purchase transaction when the purchaser meets all other requirements, the purchase may be OK'd subject to an escrow arrangement. In one recent example, the escrow suggested was one year's maintenance in advance, at closing, to be held in escrow for one year. In other words, the purchaser was asked to fund the escrow deposit in addition to paying the maintenance monthly for the first year. At the end of the first year, assuming the purchaser is current in his/her obligations to the co-op, the escrow fund would be returned with bank interest.
The Board may also request other financial arrangements which it believes desirable to protect the co-op's financial position. For example, a CPA may be consulted (at the purchaser's cost, $250, to cite a recent example) to help accurately portray the purchaser's finances. When initially submitted, purchase applications sometimes show misstatements and omissions.
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 459,076 $212,063 131,236 124,574
April 30 490,310 $245,950 156,544 178,539
May 31 517,706 $283,157 196,654 233,455
June 30 487,841 $281,767 100,172 180,954
July 31 475,477 $324,111 159,666 133,170
August 31 461,193 $378,017 192,727 180,326
September 30 410,117 $381,046 158,187 101,968
October 31 $427,444 192,701 127,087
November 30 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
APARTMENTS AVAILABLE
Christine Pagano's alcove studio (kitchen in the alcove) 3A is for sale. Call her at (516)286-4264.
Please call Kenneth Newman at 319-3000 for any of the following:
(1) Large studio with terrace, facing south.
(2) Two different two bedroom apartments (one is next door to Virginia Canino's, for potential combination).
SHAREHOLDER ANNUAL MEETING
The Annual Meeting of Shareholders took place on November 14, 1995, from 7:00 P.M. to 9:00 P.M., in the Exercise Room. 23 shareholders attended in person. 32 submitted proxies instead of attending in person. The attendees and proxies controlled 12,595 shares of the 17,202 total.
The meeting started with a tour of the new boiler room. The project still requires some fine-tuning, and certain "punch list" items still remain to be completed. However, almost all the work is complete, and the shareholders examined the "summer boiler" (A.O. Smith gas domestic hot water heater plus 1,000 gallon storage tank), fire safety devices, sump pumps, dual fuel (gas and oil) Power Flame burner, Rockmills boiler, O.A.S. computer, domestic hot water mixing valve and recirculation pump, and color-coded piping with non-asbestos insulation. All pipe and boiler asbestos was removed.
Topics discussed by shareholders and board members included:
1. Laundry room dryers and the desire for greater effectiveness.
We installed a gate so that additional "make-up" air is provided. The dryer exhaust is routed to a water-filled drawer that catches the lint dust. The routing reduces the air flow, but the City will not allow lint dust air pollution. The Fire Department insists on a water-filled drawer instead of a dry filter because of fire hazard concerns.
2. Near-term construction projects started and/or committed but not yet completed:
a. RPZ valve (Prevents our water from flowing back into City mains. Required by State law.)
b. Garage ramp resurfacing (Steel structure replaced, but leaks continue.)
c. Toilet replacements (1.5 gallons per flush vs. 5 gallons. RPZ must be installed first.)
3. Bank of New York mortgage program.
4. Waverly Real Estate arrangement for discounted sales commissions.
5. Whom to Call when an apartment ceiling shows a leak from above (Answer: Call Kenneth Newman ASAP.)
6. New underlying mortgage deal from National Cooperative Bank.
7. Sublet policy (27 sublets reduced to 17. More banks will make individual mortgages as sublets decline.)
8. Recent share price trends.
9. Future major construction projects:
a. window sill replacement (caulking repair not 100% effective),
b. brick pointing (water penetration freezes to ice and creates mortar cracks), and
c. roof replacement (temporary fix via recoating, not a permanent fix).
10. Pre-contract interview for purchase a candidates at owner's request.
11. Clearer policy guidelines needed for purchase candidates.
12. The excellence of our hardworking staff.
NEW BOARD ELECTION
There were 8 candidates for the 7 board seats. Elected to the Board were (in alphabetical order):
James Kafadar Mark Lilien Apartment 6E Apartment 3E Home: ) Home: 929-4619 Work: ) 243-7541 Work: 512-2028 Fax: ) Fax: 512-6214 Kimberly Minarovich Robert Mishkin Apartment 3C Apartment 5B Home: 633-9574 Home: 924-4160 Work: 688-6840 Work: (718) 377-1059 Fax: 838-3393 Fax: (718) 951-9136 Kenneth B. Newman Cynthia Spry 488 Madison Avenue Apartment 4H/4J New York, New York Home: 627-4787 Home: 688-8248 Voice Mail: 1-800-595-0200(Ext.7808) Work: 319-3000 Fax: 691-1682 Fax: 752-0097 Herbert Toboroff Apartment 4A/4B Home: 989-7198 Work: 620-o090 Fax: 691-7785
The Annual Meeting of Shareholders ended at 9:00 P.M. and the new board met immediately. Among the items discussed at the Board meeting:
THANK YOU
The Board thanked Virginia Canino and Alfred DelVecchio, former board members, for their service to the co-op. Virginia served for 3+ years and Al for 1 year. The Board also thanked Ellen Dougherty for her help with the balloting. The election ballots cannot be counted by a shareholder and Ellen Dougherty generously volunteered for this task.
BANK OF NEW YORK
The bank officials who arranged for the initial deal are reluctant to refund the co-op the full $5,000 paid. They offered $4,000, and want to keep $1,000 as a legal fee. The Board voted to reject the $4,000 offer at this time and to pursue a full refund.
FOR SALE
APT. SIZE OWNER PHONE COMMENTS
1S 2BR Kenneth B. Newman 319-3000
3A Studio w/
Alcove Christine Pagano (516)286-4264
3P 2BR Kenneth B. Newman 319-3000
5D Studio Debbie Glasserman 979-7938 Can be combined
with 5E
5E 2 BR Kenneth B. Newman 319-3000 Can be combined
with 5D
6R Large
Studio Kenneth B. Newman 319-3000
The Board met on December 7, 1995. Among the issues discussed:
OPERATING BUDGET 1995
Through 1995 1996
Item 10/31/95 Budget Budget
Commercial rent $ 71,667 $ 86,000 $ 86,000
Commercial rent additional* 19,224 20,000 20,000
Laundry 8,663 10,000 10,000
Interest income 10,190 3,000 7,000
Flip tax (2% sales fee) 18,000 7,000 14,000
Sublet fees 16,597 20,000 10,000
Late fees 1,207 1,500 1,500
Sublet interview fees 419 2,500 500
Bike room** -0- 700 700
Total Income $145,967 $ 150,700 $ 149,700
Real estate tax $136,695 $ 275,000 $ 275,000
Corporate tax 3,575 6,000 6,000
Mortgage interest +
principal 243,750 292,500 292,834
Total Taxes + mortgage $384,020 $ 573,500 $ 573,834
Heating fuel (gas + oil) $ 18,921 $ 25,000 $ 25,000
Electric + cooking gas 13,676 18,000 18,000
Water + Sewer*** -0- 15,000 2,000
Total Utilities $ 32,597 $ 58,000 $ 50,000
Management fees $ 40,500 $ 49,500 $ 49,500
Insurance 56,615 40,000 58,100
Legal 22,509 15,000 10,000
Audit fees 6,000 6,000 6,250
Telephone + sundries 3,314 3,000 3,000
Office expenses 4,801 6,000 7,000
Total General + Administrative $133,739 $ 119,500 $ 133,850
Payroll $104,058 $ 130,000 $ 135,000
Payroll taxes 9,974 12,000 12,000
Health insurance 11,197 14,000 14,000
Total Labor $125,229 $ 156,000 $ 161,000
Repairs $ 29,370 $ 33,000 $ 36,000
Unanticipated items** incl above 10,000 10,000
Addition to reserve not applicable 88,323 103,603
GRAND TOTAL EXPENSES $704,955 $1,038,323 $1,068,287
EXPENSES LESS INCOME 558,988 887,623 918,587
BUDGETED MAINTENANCE FEE 739,686 887,623 918,587
*9.375% of most increases (except doorman expenses).
**Income to 10/31/95 is erroneously included in maintenance.
***Net of credits.
The maintenance fee was raised from $4.30 to $4.45 and the sublet fee was raised from 60 cents to 65 cents per share per month, effective January 1, 1996. When the co-op was started in 1985, these fees were S3.31 and 50 cents, respectively. In other words, they have gone up 34% and 30%, respectively, since 1985.
Interest income is likely to fall in 1996 compared to 1995 because the average cash balance is expected to fall due to major construction projects anticipated in 1996 (brick pointing, sill replacement, etc.) The flip tax income is expected to fall because 1995 was year with an unusually high number of apartments sold. Sublet fees are expected to fall in 1996 because there are 17 sublet apartment right now, compared to 27 earlier this year. Real estate taxes are estimated, since New York City sets the actual rate in late June, effective July 1.
Fuel is estimated to rise based on recent price increases. The water bill is based on $6,000 usage less a $4,000 credit left from water meter installation (a New York City government program to encourage water meter use.) Insurance will rise because we raised the amount of our fire coverage and have added fidelity coverage (covers embezzlement, a requirement of our new mortgage). Additionally, our previous fire insurance company decided not to insure buildings with wood floor joists and the replacement coverage requires a higher rate.
Legal expenses are expected to fall based on the board's judgment of recent events. Our payroll is expected to rise due to the union contract raises. Our staff is paid union rates, although they aren't members of the union. We do this because of our appreciation of their excellence.
CAPITAL BUDGET
The figures listed above exclude capital items, such as the garage ramp construction, boiler replacement, asbestos removal, brick pointing, engineering costs, etc. The Board will try to finalize the capital budget in the next month or two. Some board members wanted to add at least $100,000 to the reserve in anticipation of the capital budget.
TRANSFER TO FAMILY MEMBER
A shareholder wanted to transfer an apartment to his son. The Board voted to request the usual application from the son, same as any regular sale. The son will be interviewed when the application is submitted.
THE BANK OF NEW YORK
After agreeing to refund the fees paid by the co-op, The Bank of New York informed Ken Newman that they would refund only $5,000 of $6,500 paid. Ken wrote to the chairman of the bank, who directed his staff to refund the $6,500.
HEAT
The co-op is holding $20,000 back from Loewy Plumbing until their punch list is complete. Among the open items: pipes banging; 1 small oil leak; some missing pipe insulation; intermittent reset errors which cause 80 degree room temperatures; etc. None of the punch list items is considered unusual for a job of this type. Loewy has warranted the installation for 1 year. If your pipes bang loudly, please slip a note under Mark Lilien's door (3E), listing which radiator has the problem.
Every radiator has 2 "valves" -- a steam vent (non-adjustable chrome color which lets air in and out of the system, sometimes making a hissing noise) and a manual adjusting valve (brass color with round black Bakelite hand wheel for opening and closing). If either valve dribbles water, it requires repair or replacement. The manual adjusting valve can shut the radiator off or turn it on. If it turns an infinite number of times or doesn't turn at all, it requires repair or replacement. Please slip a note under Mark Lilien's door it you are experiencing any valve problems.
FEES
This is a complete list of every fee paid by shareholders, besides the monthly maintenance:
1. LATE FEE -- $50 when maintenance is received after the 10th of the month, postmarked after the fifth of the month. If there is no postmark, and maintenance is received after the 10th of the month, the $50 is also due. Maintenance is due on the 1st of the month.
2. BIKE ROOM -- $75 for 12 months for 1 bike, paid in advance.
3. SUBLET FEE -- 65 cents monthly per share.
4. SUBLET INTERVIEW -- $275 whether the applicant is accepted by the Board or not. $100 extra for interviews held later in the month.
5. CREDIT HISTORY -- $100 per sublet and purchase applicant. In other words, couple" pay $200.
6. APPRAISAL -- $100 per mortgage application, when this form is completed by the Managing Agent. It is supplied by a lending bank which also usually requests recent apartment sale prices and other data.
7. RECOGNITION AGREEMENT FEE -- $250 for a mortgage closing, which includes a Recognition Agreement.
8. FLIP TAX -- 2% of the sale price of an apartment, paid at closing by the seller.
9. MOVE-IN + OUT DEPOSIT -- $500 -- Refunded to purchasers if no damage sustained to the building's public areas, after apartment passes carpet inspection. Refunded to sublet tenants after they move out. In all cases, cost to fix damage deducted first.
10. RENOVATION DEPOSIT -- amount varies, up to $2,500 --Held by the building until construction is finished and all papers finalized by the City. All costs to co-op deducted from the deposit including engineer's or architect's inspection.
11. CLOSING TRANSFER -- $500 when ownership of an apartment changes.
Items 1, 2, 3, 4, 8, 9, 10 all go to the co-op. Items 5, 6, 7, 11 go to the Managing Agent for legal and administrative tasks not covered by the co-op's contract price of $49,500 per year.
VILLAGE ASSOCIATES
The co-op sued our next-door neighbor on 10th Street, Village Associates. Allegedly, when their building was repointed, extra mortar fell into the 3 air conditioners on our roof. The co-op is responsible for maintaining those units (which cool the 2 stores, who pay for the electricity). Repairs cost $2,750.00. Village Associates is contesting the co-op's claim.
UNDERLYING MORTGAGE
On December 21, 1995, National Cooperative Bank ("NCB") refinanced our underlying mortgage. Our new mortgage is for 10 years, at 7.82%, with 35 year amortization. The mortgage will last for 10 years, so the $3.5 million debt will decline to approximately $3.2 million at the end of 2005. The new mortgage saves us $1.15 per day per apartment.
As part of our mortgage arrangement, the co-op bought a share in NCB. This share cost $35,000 and is expected to pay dividends in the years the bank makes a suitable profit. The bank is a co-operative itself, owned by its borrowers. When our mortgage expires, we will receive our $35,000 back. Each share costs 1% of the loan made by the bank. In 1994, the dividend was 50% of the share price.
Because the bank is a US government entity, the co-op avoided the New York State mortgage tax on our increased debt (the difference between the $3 million original mortgage and $3.5 million new mortgage). This tax would have been 2.75% of $500,000 = $13,750.
APT. SIZE OWNER PHONE COMMENTS
1S 2BR Kenneth B. Newman 319-3000
3A Studio w/
Alcove Christine Pagano (516)286-4264
3P 2BR Kenneth B. Newman 319-3000
5D Studio Debbie Glasserman 979-7938 Can be combined
with 5E
5E 2 BR Kenneth B. Newman 319-3000 Can be combined
with 5D
6R Large
Studio Kenneth B. Newman 319-3000
CASH POSITION
1995 1994 1993 1992
January 31 376,167 $148,901 $ 86,409 $ 38,084
February 28 399,249 $180,175 94,037 88,710
March 31 459,076 $212,063 131,236 124,574
April 30 490,310 $245,950 156,544 178,539
May 31 517,706 $283,157 196,654 233,455
June 30 487,841 $281,767 100,172 180,954
July 31 475,477 $324,111 159,666 133,170
August 31 461,193 $378,017 192,727 180,326
September 30 410,117 $381,046 158,187 101,968
October 31 223,233 $427,444 192,701 127,087
November 30 231,580 $454,992 219,101 190,202
December 31 $339,752 116,394 60,607
Average $304,781 $150,319 $136,473
HAPPY NEW YEAR!
1994 Newsletters Acrobat file Return to archive 1996 Newsletters
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350 Bleecker Street Apartment Corp.
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