Newsletter #216 Acrobat file Return to archive Newsletter #218
350 BLEECKER STREET CO-OP NEWSLETTER #217
November 18, 2008
ANNUAL SHAREHOLDERS' MEETING
The annual meeting was held at Synagogue Darech Amuno. The inspector of elections took possession of the ballots and proxies and announced that the following seven people received the highest number of votes: David Briman, Robert Geils, Jim Kafadar, Susan Kim, Jennifer Kish, Erin Larsen, and Dan Mizrahi. Over 65% of the total shares were voted by proxy. Twenty five shareholders attended the meeting.
You can contact any member of the board by going to the following URL: http://www.350bleecker.com/contact.html.
The lease amendment was withdrawn by the board before the meeting began. The board wanted to review the legal language of the amendment and get more input from the shareholders.
A discussion with the board took place at the meeting. Among the issues discussed:
PROPRIETARY LEASE AMENDMENT
Dan Mizrahi outlined the intent of the proposed changes to the proprietary lease and answered questions raised by the shareholders present at the meeting. Several shareholders expressed a concern that the changes to the "home occupation" clause in the existing proprietary lease (see paragraph 14(b)) would limit their ability to work from home or operate their business from home, because the approval of the board would clearly be required and such approval could be withheld at the board's discretion. The board is mindful of the concerns raised by the shareholders present at the meeting and does not wish to impede any shareholder's ability to support herself or himself. The board, however, is also mindful of the fact that the co-op's apartments are required by applicable zoning law, including the building's certificate of occupancy, to be used as a residence. The building is routinely inspected by the city to make sure it is in compliance with applicable code. In addition, the board has additional concerns relating to building safety and security, use of building personnel, and the impact on shareholder value resulting from an unregulated use of apartments for "home occupation" use. The board will discuss the shareholders' concerns with its attorneys and resubmit a modified version of the proposed amendment to the shareholders for their approval.
SPONSOR PLANS FOR CORNER STORE
Dan Mizrahi discussed the status of the negotiations with the sponsor concerning its lease with the co-op. As you may recall from reading prior newsletters, these discussions have been on-going for over a year. While the lease amendment is not yet final, the board is hopeful that the co-op and the sponsor will enter into the lease amendment in the upcoming weeks or months. A summary of the material terms of the lease amendment can be seen in Newsletter #212, June 14, 2008.
The sponsor delivered construction plans relating its build-out of the retail space. The board's engineer reviewed the plans and provided comments to the sponsor. The plans were displayed at the meeting. The plans can be seen on our website: http://www.350bleecker.com/store/rendering.html.
FINANCIAL SITUATION
According to the New York Times, "Average co-op maintenance fees in Manhattan last year were 30 percent higher than in 2002, compared with a 9 percent difference in the previous five-year interval, according to an analysis of residential sales data by Miller Samuel Inc., the Manhattan appraisal company. (Data for other boroughs were not available.) Condos had a 38 percent increase in combined common charges and real estate taxes in the most recent five-year comparison, versus 27 percent in the previous five-year period."
For 350 Bleecker, maintenance went up 10.7% from 1997 to 2002, and it went up only 14.8% from 2002 to 2007. In other words, we have been much more frugal than most co-ops in Manhattan.
Expenses by percentage – for the year ended December 31, 2007
The greatest fiscal crisis New York City has faced since the Great Depression has led to the mayor announcing a large real estate tax increase. The co-op was also hit with a large increase in our property tax assessment, which will be legally challenged. The increase in taxes, combined with the assessment by the City of New York, will mean a larger than normal increase in our maintenance.
Luckily, there are no major projects in the pipeline, and all our recent alterations were budgeted last year. But as can be seen from the chart above, our real estate taxes, mortgage, utilities and payroll account for 82% of the budget. So even if the co-op curtailed all of its non-fixed costs, our maintenance would still rise.
Our budget meetings take place in December, and are always very difficult. Every line of the budget is analyzed and no board member enjoys raising the maintenance. The board will look for any cost cutting measure possible. The board has already identified a number of expenses which might be reduced to offset the City’s tax increase, although we will still need a maintenance increase. When the 2009 budget is finished, it will be announced immediately in this newsletter.
350 Bleecker Street Apartment Corp
January through October 2008 Spending vs. Budget
(unaudited)
Footnote: at the end of October 2008 the co-op had $247,147.79 in cash.
Newsletter #216 Acrobat file Return to archive Newsletter #218
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