Portraits in Power

Renee Serlin, the president of her Manhattan co-op, produced and directed documentary films in England. She wrote “The 48-Hour Day” in the January Habitat.

Michael Herzog, a retired accountant and finance manager, lives and breathes co-op issues. And he has been doing that for nearly 20 years, ever since he became president of the board of Cedarhurst Park, his 68-unit co-op, at its birth in 1988. The 1950s-era building is a two-story garden apartment complex in Cedarhurst, Long Island, with 11 separate front entrances. On a Tuesday evening in January, the shareholders gathered for their 18th annual meeting. For the first 17 years of the co-op’s existence, monthly maintenance has remained the same – not necessarily good news. Often, when buildings have gone for many years without increases, the building’s reserves and general upkeep bear witness to long-running neglect. But in this case, the building is well-maintained and boasts a remarkably strong reserve fund.

In 2006, however, rising fuel prices had necessitated a five-percent increase, followed by a one-percent rise in 2007. Seventeen years of stable maintenance can leave residents unprepared for even minimal changes, but an added factor is that a number of the shareholders are retirees on fixed incomes. For some, the most aggravating part of the change is that the increases were imposed, in the words of some residents, “without consulting the shareholders.”

Herzog, unfazed, seems adept at understanding the hidden messages of the complaints. He has just announced that there is over a million dollars in the building’s reserve account and, with all that money available, it may seem fiscally extravagant to ask shareholders to add anything to their monthly outlays. He points out to the group that the board was elected to make these decisions and that funds in the reserve account cannot be used for operating expenses. He also gently notes that 17 years without an increase is almost unheard of in most co-ops and condos and that the increase this year is below the inflation rate.

Barbara Saltzman has been heading the board of the Colony House on the East Side of Manhattan for the past three years. The 63-unit building was erected in the early 1960s and has the unusual distinction of being created, from the beginning, as a co-op. Saltzman, a retired businesswoman who, at one time, owned and ran an outsourcing sales company for the pharmaceutical industry, supervising nearly 2,000 employees, ran for the board because “they were all whining – as they do in most buildings – about what was wrong. And I said to myself, the building is important to me; I want to make it better if I can – or I want to be quiet and shut up. But, I don’t want to just walk around, moaning about it.”

Michael Herzog and Barbara Saltzman are part of an unusual breed: the New York City co-op/condo board president who takes a licking but keeps on ticking, year after year. Patient, perceptive, and powerful, the best of these leaders rule by communicating clearly about building needs while, at the same time, understanding everyone’s concerns.

Indeed: when buyers and brokers look into the selling points of an apartment, everything from reserve funds to pet policies is likely to be investigated. But rarely does anyone inquire into the skills or effectiveness of the president of the board. This may, in fact, be a huge mistake. It might not be immediately apparent, but the kind of person who heads the board could be one of the most significant factors in the success or failure of a building. Looking at the vast differences among properties, it seems unlikely that there can be one style that fits all, but there are certain characteristics of good presidents that appear regularly. Here, then, are two presidents, Herzog and Saltzman, with considerable differences in their philosophies and approaches but who are still remarkably similar in their essentials.

Herzog’s World

When Michael Herzog took office, his building was in chaos. The roof was shot, there were no security procedures in place, no locks on the front doors, no intercoms, many broken windows, and hallways that were decrepit – everything that could be wrong was wrong. But, following some remarkably astute negotiating by Herzog, a couple of major renovations (a new boiler and an aboveground oil tank) were financed by the sponsor. New windows were financed by requiring shareholders to pay for their own installations. Some equally astute financial moves netted a record-low interest rate on a refinanced mortgage. This, together with a substantial windfall in the form of a tax refund, was the basis for establishing the co-op’s very comfortable reserves.

Herzog attributes much of his success at rescuing the building to the close partnership he has with the managing agent hired for the co-op 18 years ago. Herzog and Steve Greenbaum, director of management at the Mark Greenberg Real Estate company, speak every day and have tremendous respect for each other. Greenbaum sees Herzog as the “perfect board president.” If that sounds overenthusiastic, Greenbaum specifies three components that go into the mix: the total lack of any personal agenda; the ability to learn, listen, and ask the right questions; and the enthusiasm, after so many years on the board, to be constantly looking for creative new approaches.

But, he adds, “it’s a thankless job. Michael is the first person whose bell they’ll ring when they’ve got a complaint. With all the hard work he’s done, people will still come and complain to him about the most minor thing.” Greenbaum notes that Herzog is a problem-solver: “Michael will stay with an issue until he exhausts every option.” By his own description, Herzog is “a pretty hands-on person,” and a strong believer that management can’t be expected to take on every issue.

One of the major aggravations of the area around Cedarhurst is the heavy concentration of iron in the water. Everything – from pipes to laundry – gets rusty. Herzog has had pipes replaced in the building, installed filters, researched every possible avenue, and even persuaded the water company to flush the main. Nothing worked. But, last autumn he managed, through extensive phone calls and follow-up work, to get a water company supervisor to come to the building to see the problem for himself. Herzog had the super collect a bottleful of the water ready for the inspector.

“He was appalled,” says the president. “He said the water company must have been flushing the wrong mains! He flushed the main directly across from the building for three hours.”

Problem solved. The fix was temporary but, for the moment, it proved to be the most effective move yet to stem the aggravating tide of rusty under-garments and brown toilet bowls.

Info Storehouse

Herzog is a compact man with a slightly hesitant way of speaking that betrays a cautious, considered response to every question and conceals the fact that, perhaps more than the shareholders fully realize, Herzog is basically, the linchpin of the co-op. He not only has built up an incredible storehouse of information on every facet of the co-op’s existence and operations, but he will also be leaving a remarkable record of the information for succeeding presidents to use. He files and cross-files everything on virtually every subject, from garage doors and water to the laundry room and security. He keeps five months of records in his apartment and then, eventually, brings them down to the basement boardroom where a bank of filing cabinets has been installed.

One of his most important tools is a commercial-grade copying machine. There are folders with information on every single person that has ever lived in the building. Herzog, a victim of identity theft some years ago, is obsessive about data security. There is only one set of keys to the filing cabinets (held by Herzog), and the cabinets are kept in the locked boardroom housed inside the locked basement. Because Herzog has been a fundamental factor in organizing and running the building affairs for so many years, the co-op is undoubtedly unique in the comprehensiveness of its records. Most management companies will store only limited material over the long term, and when a building has switched management, there is, inevitably, even less continuity in record-keeping.

Herzog admits that his work for the building is enormously time-consuming. “I don’t think anybody (other than my wife) understands how much time I actually put into it. But I like being in charge, I like doing it. It’s my home, and it’s my investment, and I want it to be the best possible. And, without being boastful about it, I know that I know more about [the co-op] than anyone else in the building. So, it’s something I can do and want to do. Particularly now that I’m retired.” For years, however, Herzog was carrying much the same load while he was working full-time. The difference: “I just stayed up later.”

He is careful, however, not to exaggerate the success he’s had with running the co-op’s affairs. “There isn’t a magic formula. When you’re in a situation where everybody gets along well and they’re fair and honest, it’s very easy. If everybody is contentious and has their own agenda, no matter how good you are, it’s going to be a disaster.”

He also believes that a good part of his success can be attributed to the size of the building. “I couldn’t do what I do in a very large building with hundreds of units. Sixty-eight units is a good size to manage.”

At the shareholders’ meeting, Greenbaum takes the opportunity to remind everyone that they are “incredibly fortunate” to have a board president like Herzog – “This is one time that you guys have a chance to thank him publicly” – and there is a round of applause from the small group gathered for the meeting. But Herzog knows his people, and a better mark of their appreciation probably lies in that small turnout. As Brian McCabe, a fellow board member, remarks: “If you don’t have so many people here – you’re doing good!”

Adds Herzog: “I’m always watching for things that affect the building, and 99 percent of the time, people don’t have any idea when there’s been a problem. I tend to notice things before anybody else and get things running again.” Now, that’s an attractive concept for anyone looking for a building to move into.

Another President, Another Style

Once Barbara Saltzman was elected to the board of the 63-unit Colony House, she herself acknowledges, it’s not surprising that she became president, “because I’m going to work at something and become active.”

One of the characteristics of both Herzog and Saltzman is the tremendous drive to learn about something and the energy and ability to be capable of taking over the enterprise. But in other respects, Saltzman has a radically different approach than Herzog’s to the job. While Herzog is an infinitely detail-oriented person, with a remarkable grasp of every single aspect of his building’s operation and history and the inclination to be the sole board member involved in every element, Saltzman operates largely as a consensus-maker, driving the board towards making decisions and taking timely action.

For instance, a major issue with many buildings from the 1960s, such as Colony House, is the galvanized air-conditioning drainpipes. They are a constant and expensive source of backups and leaks. Robert Grant, director of management at Midboro, the building’s long-time managing agent, recalls that years before Saltzman came on the scene, the board abandoned the idea of rectifying the situation after learning that the job would not only run up a bill of over $2 million but would also involve extensive construction work inside apartments throughout the building.

Saltzman took on the problem that had been evaded for years. Grant recalls that she got the board to plan the project in affordable phases and then undertook to sell the project to the residents. Almost every apartment in the building had installed expensive built-in cabinetry, and one of the challenges was getting shareholders to cooperate with work that would require them to pay for extensive reconstruction of their units. Saltzman never let up on the issue. After a number of meetings, both with residents and her fellow directors, she finally got the board to create a plan to take on the cost and supervision of the interior apartment work as part of the project. This was a break with past procedures.

Notes shareholder Josh Kazam: “It’s very difficult to actually accomplish things in a building where you have many different tenants with many different opinions. I like the urgency that she adds to the situation so that the board actually ends up being effective in doing what it’s there to do – run the building. With Barbara, things happen!”

Gale Donovan, a 20-year resident in Colony House, confirms that Saltzman is extraordinarily focused. “She decides something should be done and she gets it done. You don’t just hear a lot of verbiage that goes on and on and what should be done gets lost in the shuffle.”

But Saltzman went further and personally took over responsibility for overseeing the apartment work when residents had to move out of their homes for as long as two to three weeks while the work was underway. Saltzman recalls: “I went through the apartments where they were working every day at four o’clock.” Every piece of molding, every panel, she insisted, had to be put back so that it looked as though it had never been removed. One shareholder had a major dinner party scheduled for the week when the crew was ready to start work in her apartment, and she insisted that they would have to come back a week later.

“I said, ‘I’m terribly sorry, take him out to dinner. If we hold you up, we’ll hold up the person under you,’” she recalls. “It was the husband’s boss, and I knew it was a big deal, but we had a schedule.” The schedule went ahead. “We got in everywhere. I think if you explain your reasons so that people understand not only what you’re doing but why you’re doing it, people are cooperative.”

And, clearly, you also need to have the strength to be firm. But, she acknowledges: “Somebody has to run the project. That’s why you’re elected to the board.” Grant notes that it was a nightmare project, but “remarkably, in the end, it came in under budget and three weeks early. That’s totally unheard of in any building in the city. Never!”

Elegant Consensus-Builder

Saltzman, an avid collector of early 20th century American art, is an elegant-looking woman that you would probably be loathe to say “no” to on anything – which, undoubtedly, is part of the reason for her success. She reports, with some pride, that people say, “She tells it like it is.” She admits that she puts in a lot of hours but that she also has other interests that command more of her time: she’s on the board of the Lighthouse and other charities.

One key to her multitasking is her policy with paperwork. “I don’t keep all that much any more. Because the paper is ridiculous. And the management office keeps things.” She has little more than a drawerful of files in her apartment. “I don’t keep the minutes. I do keep board decisions. I keep copies of the annual meeting minutes because I really use those as a guide for the next year.” She also keeps files on projects that are actively underway.

For Saltzman, the most important tool is the shredder kept in the basement boardroom. She says she’s “crazed on confidentiality.” She echoes Herzog on the issue of data security, but she approaches it with a different perspective. After an interview with a prospective shareholder, everything gets shredded. And her memory goes with it. “I couldn’t remember, even if my life were at stake, what the man next door to me does for a living – even though I interviewed him. I’m very much against invasion of privacy. I think, in general, we know far too much about our neighbors.”

The unwritten rule in Saltzman’s co-op is that people get off the board after six years (Saltzman served three years before becoming president). “My six years were up last year and I said, ‘I’m out of here, guys.’ Well, a few people on the board said they weren’t going to stay if I wasn’t on the board. And I knew a huge elevator project was coming up. I want to see that it’s run right. And I had a concern about the use of our very, very large reserve.”

The Colony House reserves have been considerably increased while Saltzman has been president and it’s a very tempting resource. If maintenance is high, or people want to use the funds without prioritizing the building’s capital needs, even a large reserve can be used up quickly.

But her feelings about staying on as board president are ambivalent. “I like working with the board. I like getting something done. Does it become a headache? Yes. Because now people think that I work for the building!” If they want an immediate response to their problem, they know that, like Herzog, Saltzman is the right person to call.

Two Presidents, One Goal

Both Saltzman and Herzog admit to being extraordinarily responsive at all times to everyone. Saltzman notes that she has enormous respect for people and their homes. “These are your neighbors. And their interests are the same as yours.” But, it’s more than that. Clearly, Saltzman, like Herzog, takes it as a personal challenge when a shareholder calls with a problem. However, Herzog has struggled to retain at least some sense of privacy by moving board meetings from his apartment down to a basement venue and placing restrictions on the hours that neighbors can call.

Saltzman recalls an incident regarding hallway decorations. The co-op rule was that each floor paid for its own redecoration, but – this is where the problem arose – everybody on the floor had to agree to the plan. There was one floor where the residents fought the board for months.

“I started to get calls morning, noon, and night. I found myself with samples of their stuff. I said, ‘I’m not the decorator. I’m not choosing.’ The end result was that I had a new bylaw written.” A majority is now all that is needed to approve such a plan. Problem solved.

Saltzman sums up her philosophy. “I didn’t come in with an agenda for myself. And I’m very careful when we interview people for board positions that they don’t have their own agenda. Because the majority of people do. ‘I’m going to get on the board because... my terrace is falling apart, and they’re not doing anything about it... I don’t like so and so on the staff... I’ll get on the board and get somebody to do something about this.’ Well, honey,” Saltzman advises, “that’s not a reason for being on the board, or for being president.”