Design Decisions

Nasty notes slipped into mailboxes. Whispering campaigns in the hallway. A fistfight in the common room. Sounds like a high school cat fight, right? Wrong, these are just some of the telltale signs that a building has decided to renovate.

Beauty is in the eye of the beholder, the old adage goes. But what happens when the beholder lives in a building with dozens of others, each with his or her own sense of style and taste? When it comes to renovating a lobby or hallways, co-op boards must learn to navigate a thicket of criticism that is not for the faint of heart.

"You have to understand. These projects are very gut reaction-driven," warns Joel Ergas, a principal in Forbes-Ergas Design Associates. "They are not like changing windows. They involve a lot of emotion. So you have to be prepared for that."

"Don't call me if you are having a lobby redone. A boiler replacement, fine," says attorney James Samson, a partner in Bangser Klein Rocca & Blum. Indeed. When it comes to the emotional issue of whether to stay with the Saturday Night Fever-inspired décor or take the plunge and get rid of the lobby's fountain with the colored lights, most lawyers and managers say they would like to leave their phones off the hook.

"I've seen fistfights over lobby renovations. I've seen extremely reasonable, professional people lose their composure over things like color and design," notes Steve Greenbaum, director of management at Mark Greenberg Real Estate. "I've seen grown, sophisticated professionals get reduced to street hoodlums over the issue of wallpaper."

So, given all the headaches, and potential for bruised feelings, and the hours involved in selecting a designer and overseeing the job, is renovation worth it?

THE MOTHER OF INVENTION

To answer that question, the first thing boards need to think about is: how pressing is the need for renovation? While the urge to rip down the old wallpaper or remove 1960s-era sconces is tempting, the most important step, say managing agents and shareholders who have done it, is for a board to decide what it wants for the building, set a budget for the work, and then prioritize according to the most pressing necessities.

Says Samson: "Establish the budget first, and design toward the budget. Second, if you are doing any capital improvements in the building, do them first. And third, never let your architect design anything without committing to your budget. Designers and architects are not economists and will spend every dime they have on building themselves a monument in your lobby. You are not going to be real popular if you estimated $100,000 for a project and spend $350,000 and half the people don't like the paint. I've seen buildings almost go bankrupt doing their lobbies. It gets out of control."

At the Churchill, at 300 East 40th Street, board members were anxious to restore the building to its original elegance and bring it up to market value - and eventually did, removing three spindly chandeliers and ponderous wood paneling and adding delicate detail work. But caution and experience made them go slow.

In its initial step, the board set out a seven-year budget, with regular maintenance increases to pay for a massive renovation of all the common areas, and then prioritized according to need. "We did a complete, building-wide renovation," explains Bob Stella, a board member. "We did elevators, all of our hallways, put in a new health club, gym, and renovated our lounge. Every common area in our building has been completely restored. The lobby was the last element to be done."

To pay for the work, which included a new concierge station, computer upgrades, and security cameras, the board raised $30,000 a year by increasing maintenance over a period of time and installing storage units. That, coupled with the interest from the reserve fund of $100,000, meant the building had a tidy nest egg when it began its $3 million renovation, from gym to lobby, which took two-and-a-half years to complete.

ALL TOGETHER NOW

The best way to help such a renovation go smoothly is to create a design committee to vet ideas, solicit proposals from designers, and filter out the unreasonably expensive projects. The committee should represent a cross-section of the building's interests but not be too large to reach consensus.

If the board does take the step of creating a committee, "there should be board members on it," says Ergas, "or they have to give very clear guidelines to the separate committee. Because you don't want committees running off without a clear program or without clear objectives from the board."

That was the first problem board members ran into at the London Terrace Towers in Chelsea, when they decided to renovate all four of their marble lobbies and the hallways. The four towers, built in 1932 and located on 23rd and 24th Streets between Ninth and Tenth Avenues in Manhattan, had a design committee eager to restore the property to its former glory. But the committee moved too hastily in selecting an architect, whose budget for the work, as one board member recalls, was "outrageous."

The board and design committee locked horns over the architect, who was eventually dismissed, with much-bruised feelings all around. A designer was eventually selected and the renovations proceeded apace, but the fight served as a cautionary tale of the emotions involved when dealing with building aesthetics.

"It was very difficult to be a committee member," recalls one board member, who requested anonymity. "The board is not bound by the committee's recommendations, and unless people understand upfront what their role is, there is going to be trouble."

"Probably, the worst thing that can happen is if there is confusion on the board as to what they want to do. It creates delays and creates frustration in getting these projects done," explains Eugene DeGidio, a principal in Maxwell-Kates, a management company. As a managing agent, he often serves as the liaison between the designer and the committee on one side and the board on the other. "It's easier if you are not listening to six different people. They give their thoughts to me, and I pass them on to the board."

DEALING WITH DESIGNERS

One way to steer clear of the shoals of architect/designer selection is to determine the kind of work to be done. DeGidio often suggests that boards choose a designer, because typically designers have more "conceptual" experience. "Not that an architect can't do that, but 90 percent of the time, a board will use a designer," he explains. "They tend to use an architect more if they are planning to move walls [or] redo flooring and any lighting or electrical work."

Committees should start with a wish list of upgrades or redesign, and then begin to talk with designers, eventually narrowing the list down to three or five firms, and then visit buildings to see their work. The top three designers can then be introduced to the board for final selection. It is important, when a committee and board is interviewing a designer, to be asking itself, "Is this professional going to be listening to me when I talk?"

"When you do a lobby, it's extremely personal. It's an extension of the shareholder's home," observes Burton Wallack, president of Wallack Management. "When we have a project we sit down with the board, we recommend they interview the professional in-depth, face to face, ask key questions and, most important, look at projects they have done [both] recently and years ago."

When interviewing designers and architects, the committee members should have several points in mind. First, have the committee members ascertain that they have enough funds for the project. Have they pinpointed where the money will come from? Second, is there other structural work that needs to be done, such as rewiring the building for high-speed internet access, installing new security cameras, or replacing the intercom system? Finally, is the building looking to renovate the public spaces or restore them?

As one Manhattan-based designer puts it: "Boards need to think about how much time they want to allot to the project, what assets they have they want to capitalize on, such as marble or molding, and what you can keep and what you can build on."

Interior designer Marilyn Sygrove, principal in Sygrove Associates, says that after she is hired, but before the design work even starts, "We sit down with a clean sheet of paper and we have a meeting where we identify everyone on the committee and the board. They tell us who they are and what they do, who they think the people are who are going to buy into the building, what are the functional things that need to be dealt with, and what are the aesthetics that need to be dealt with."

In addition, committees need to look at the contractors who will be involved in the work. Finding the right ones is critical, particularly if there are going to be technology upgrades where wires have to be disguised behind molding. "You interview the contractors and just like you look at the designer's work, you look at the contractor's work: recent work and previous work," says Wallack. He adds that by paying attention to detail in the beginning - such as finding out who the construction foreman is and "whether he speaks English and understands instructions" - helps with potential problems down the road.

When do you know whether to dismiss a designer? If there is not a steady progression in the design, if you disagree with the concepts, or feel they are off the mark, boards need to speak up and cut their losses.

EVERYBODY INTO THE POOL

But most important, it should be clear from the start who has final say on the redesign. At the Brevoort, at 11 Fifth Avenue, the co-op board completed a fancy lobby restoration two years ago: the marble floor was polished and murals in the lobby cleaned and restored and the hallways were renovated. But it was clear from the outset, says President Diane Nardone, that the board was in charge.

"We have a standing decorating committee that is charged with primary responsibility for interviewing designers, and making recommendations to the board in terms of designers and bringing schematics to the board," she explains. Did the board publicly exhibit the final plans for the hallway renovation, where new carpet, lighting, and wall coverings were installed? No, says Nardone, who notes that the board judged that to be counterproductive.

"Every single person who decorates his or her apartment has his or her individual taste," she explains. "And we felt that the board has 11 members, made up of a great cross-section of residents who live in the building, and if we could get consensus among 11 board members, we had a very strong design. The board did not vote on the design. The board worked until every single board member felt that the design and all the choices we made were absolutely the right ones." Nardone maintains there was not "a single complaint" about the work from anyone in the 288 units.

That co-op was lucky. Most boards and managing agents maintain that it is vital to solicit shareholder input from the beginning to avoid large battles later. Letting shareholders know about the formation of the design committee, giving them monthly updates in a newsletter, and even putting proposed wallpaper samples or design schematics on display in the lobby are musts.

Arthur Weinstein, a co-op attorney, says that while it is easier and more cost-efficient for a board doing a lobby renovation to make all the decisions, not involving shareholders as fully as possible can lead to major headaches down the road. "It cuts time, makes it simpler, keeps the budget under control, but then every stupid decision is questioned by somebody and everyone second-guesses everything."

Ray Hoey, a board member at 924 West End Avenue, a 65-unit co-op with a porte-cochere (a tiled entranceway once used by coaches as a turnaround), says it would be unthinkable not to allow shareholders to weigh in on the process. "On the West Side? Are you kidding?" he observes, with a laugh. His building's renovation took years to develop. First, there was pointing to be done on the outside, and then the roof needed to be redone. After that, the board installed a computerized heat timer, which has saved the building 17 percent on heating costs a year.

Doing the lobby work was a "little more sticky, because that's discretionary funding, and you [find] some people who want to spend a lot versus others who don't want to do anything." The upshot," says Hoey, was to do "a little bit each year." Now the shareholders are trying to decide what kind of furniture they want in the lobby and finding the right floor lamps and curtains to fit the overall motif.

At the Churchill, where many of the board members have backgrounds in real estate, the board moved determinedly but carefully with its decision-making. "We let people know well in advance, through our newsletter, what we were planning. We posted three different design schemes in the lobby with the colors and textures. We polled people on what their preferences were and then the board made a decision based on the feedback and what our ultimate goal was," says Stella, the board member.

"I would say, on the balance, most people liked [the final redesign]," he adds. "Obviously, some people didn't like the colors, for example, but I would say the majority really liked it."

FIGHT CLUB

It wasn't such smooth sailing down in Chelsea. Asked about the fractious dealings with the design committee and the shareholders, the London Terrace Towers board president, Nancy Frawley, was diplomatic. "We have a lot of architects and interior design people, graphic artists who live in the building," and there were a lot of thoughts about the kind of design the four lobbies should have. The first problem that arose was strictly financial. Both the architect's fees and the designs created were way out of the renovation budget.

"The amount of money it would have cost [for the four lobby restorations] was just astronomical," she recalls. "And not only the cost of the design but the architect's fees were enormous. Architects usually want a percentage of (continued on page 39) the total cost of the project, in this case, which was over $1 million."

The design committee and board worked hard to keep the shareholders updated, with information meetings and displays of the marble, wood, and coloring, and photos of the type of lighting to be installed. All in all, it took about three years, from the time the designer was selected to when the work was completed.

Frawley offers three suggestions for co-ops considering renovations. "First, know what you can spend. Second, know where you can get the money." Third, don't take the criticism personally. "It's hard not to take these things personally, but you have to look at things objectively and you have to protect the shareholders' investment and you have to get the shareholders to trust that you are doing that."

Six or seven years ago at the Brevoort, the board came together and created a five-year plan for its major projects, including the lobby restoration and hallways, which took two years to completely redo and were just completed a year ago.

"We put all the projects on the table and then we decided what the priority, and estimated what each project would cost. We looked at our escrow and how to finance without assessing shareholders and without any significant increases in the maintenance. And, at the end of the day, we were able to do all the projects that we had planned, including some portions of each project that we did not anticipate, but made economic sense," says Nardone, the president.

The lobby's marble floors were polished and an art restoration team brought in to clean the murals. Along with ridding the hallways of the salmon theme and bringing in new wall coverings and neutral-colored carpeting, the board added cove moldings to the hallway to hide the building's rewiring. (Time Warner had wanted to put up plastic molding over the wire, which would have been "very distressing to someone who lives in a white-glove building," says Nardone.)

The final overall effect was "more elegant, and lighter. It looks fresh and new," observes Nardone. Of the lack of ruffled feathers or hurt feelings, she notes: "I know this was an extraordinary experience for our building. I know that the process can be debilitating. It can be combative. It was none of that."

ADVICE TO THE LOBBY-LORN

Finally, after all that, is it worth the trouble to redo your lobby? Absolutely, says DeGidio. "It makes the building more desirable. When you go to purchase an apartment, the first and most immediate thing you see is how the lobby looks. If it's striking and elegant, it's the appealing factor [in the decision to buy]. Therefore, I do believe it does enhance the value of the building, without question."

Agrees Greenbaum: "The lobby offers what we call curb appeal. It's the first impression of the building and it makes a certain representation of what kind of building you are going into. The statement that it [the lobby] makes is very important."

Then again, you can't please everyone. Ask the Queens board which hired a designer to get rid of the smoked glass and colored fountain and redo the lobby in "really chic" tones of gray. Most of the owners were not very happy with the change. "The shareholders hated the result," reports Samson, the co-op's attorney. He recalls the final epithet from one shareholder: "It looks like a Manhattan building."