Management Report: Historic agreement allows us to continue with rebuilding Co-op City
October 2, 2004
Finally, after a long and arduous journey, we have finally come to the end of the road with our refinance negotiations. On September 29, our negotiations went down to the wire as we attempted to negotiate with HFA concerning the matter of arrearages that they claimed we owed, and still close on an historic agreement with New York Community Bank in time to avoid defaulting on our existing loan with the HFA, and to proceed with the rebuilding of Co-op City.
As a single loan, the $480M agreement that we have made with New York Community Bank is the largest multi-family loan anyone can remember or has ever heard of. We congratulate the Board, HFA Committee and the people of Co-op City for their patience and support during what might have seemed like a never-ending and frustrating process.
But this is only the beginning. Management met with the Austerity Committee this past Tuesday, at which time, a series of recommendations were discussed. These recommendations will be presented to the Board in the weeks ahead. Clearly, going forward, we must do more with less in order to keep Co-op City affordable.
The recapitalization adds $280,000,000 to our debt, which must be paid back with interest. It should be pointed out that we were successful in eliminating $153,000,000 of alleged arrearages which did not accrue interest.
The new money from New York Community Bank funds reserves and provides for essential capital projects, such as balconies, bricks, windows, power plant, etc. However, it does not ease our cash flow for operations. Nevertheless, with the money now available for emergency capital projects to be completed, Management is turning its attention to improving operations – doing more with less, and not merely moving from crisis to crisis, which was our normal mode of operation.
Over the next 3 – 5 years, our goal is to finish the garages, remove fencing and bridging from around the buildings and reclaim the Greenways. This work will take time, but we can finally begin.
In the coming months, we will report regularly on the progress of our capital projects using the newspaper and the new lobby bulletin once the work begins. The following is a break down of where we currently stand:
CAPITAL PROJECTS (October 1, 2004)
It is not our intention to make anything an emergency. Rather, we believe it is time to review and decide a course of action in every area of Co-op City life and capital repair program. We will report monthly.
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Elevators There are 150 elevators completed and 10 out for modernization. We have a total of 179 elevators. The contract as you know requires work completed in 4 years (February or March 2005) and payment over 7 years. We had negotiated with the contractor for a reduction $500,000, subject to Board approval if we paid for work complete and not delayed overtime. With the New York Community Bank loan, this may not be as attractive since we pay only on what is borrowed except the first $60 million. We will run the numbers and then advise the Board since the change will require a Board resolution. |
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Replace Windows and Doors We have a request for proposal (RFP) to hire a new architect/engineer out for bid. |
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Brick and Balcony Repair We have missed the window for work in 2004 to begin full-scale reconstruction because of weather. After public sealed bid, we have a report. It is our suggestion that this contract be referred to the Construction Committee for detailed review and analysis since it is $32,000,000 and will affect life for 3 ½ years. An RFP to select an engineer to supervise all work was responded to on September 22, 2004. This too can and should be reviewed by the committee prior to the Board review. |
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Roof Replacement After public competitive bid, a second reading is before the Board for replacement of the Bartow Center roof. We ask Board approval to proceed because of the horrible condition of this roof. Work can proceed this year. |
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Plans and specifications to bid other roofs are in development by WASA Engineering. Emergency roof repair has been publicly bid, lowest bidder identified and interviewed, ready for committee review in anticipation of Board presentation. |
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Garages Garage 2 has an approved contract for remaining concrete and waterproof. The Board has a second reading proposed to accept a bid to alternate to complete first floor. The contractor has orally agreed to hold his price despite the rise in concrete prices. This is a second reading resolution before the Board and much work can still be completed this year. Garage 7--using the competitively bid prices for garages 2, 6, & 7, the Board has a second reading resolution to complete roof, drains and waterproof garage 7. Work can proceed now, if approved. Waterproofing involves a 3M or Neogard product with a 10-year labor and material guaranty. The Construction Committee and Management are reviewing the products and the warranties. The Board also has a second reading resolution to retain Desman Associates to supervise the above work, if the Board decides to proceed. With regard to all other garages (1, 3 4, 8), a process was developed with the engineers from HFA and DHCR with their consultants. The engineering firm of Dewberry-Goodkind, Inc. was retained to investigate and evaluate the optimum utilization of the available funding for repairs. We have advised everyone of the desire to build new, if possible. Again, subject to your direction, we will provide all data to the Construction Committee upon receipt from Dewberry-Goodkind. We must make decisions in order to hire engineers and have bids complete for work in the spring. |
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NYS Energy Research & Development Administration ( NYSERDA ) As you know, we were successful in receiving a grant from NYSERDA in the amount of $5,246,762. The program and funding is keyed to energy savings projects, such as garage lighting and modernize elevators, which will now be funded. In addition, funds will be granted for new hallway lighting. With refinance in place, we can accelerate funding. TAS Engineering is working on plans and specifications for the hallway lighting conversion with NYSERDA. We hope to be ready to bid the end of the month. If you recall, we had a demonstration at a Board meeting and when specs are received, we will do it again for your consideration. |
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Dreiser Stairs Bids have been received and we will be presenting a first reading to the Board next meeting. |
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Peartree Waste Facility There is an approved contract to complete the concrete and mechanical. The electrician has withdrawn because of the delay. We are exploring alternatives. The compactors are on hold at the manufacturer. With financing in place, we should be able to proceed quickly. |
