Secrets of Powerful Partnerships

Thirty years with the same manager? With all the complaints you often hear about management, it often seems remarkable that managers can last 12 months, let alone three decades. What makes management-board partnerships endure? What can we learn from them? Here are eight successful “partnerships” that provide some answers.

333 East 14th Street
Jordan Cooper Associates

The building could be called the Phoenix. “They’ve re-created themselves a number of different times and we’ve been able to grow with them,” says Paul Brensilber, the principal at Jordan Cooper Associates who has managed the 206-unit co-op at 333 East 14th Street since 1989. Jean Verrico, on and off the board from the beginning and currently the vice president, remembers that the co-op went through two management firms – one large, white-glove operation that proved inept and a smaller shop that was reportedly stealing money – before hooking up with Brensilber. “They helped us very much through the bankruptcy of the sponsor,” which left 19 unsold units in the co-op’s hands, says Verrico. “It was a tragedy then, because the difference between the rent and the maintenance was unbelievably bad. Half of the tenants had their rent frozen while they waited for repairs to be done.”

The property, adds Brensilber, has “gone on an incredible journey from the depths of debt to great success. They had a huge mortgage; they had millions in arrears; they closed out a sponsor.” The co-op has survived an auction and a sponsor default, and wrestled through the challenges of taking over and reselling the sponsor’s units. It has made capital improvements to every system in the building, and coped with changing demographics and a changing neighborhood.

“The whole Lower East Side has completely gentrified,” Brensilber notes. “When we first got involved here, this was a wasteland. It used to be nobody wanted to live below 34th Street. Now, nobody wants to live above 14th Street. The personality of the neighborhood and of the building [has] changed.”

At the time Brensilber took over, the co-op was populated by solid middle-class types: nurses, mid-level managers, and artists, among others. “Now you have entrepreneurs, lawyers, bankers, and people who work for Fortune 500 companies,” says the manager. The building itself has come a long way from the near-financial meltdown of the sponsor default. It is solvent, paying its mortgage down from $7 million to just under $2 million. Twenty years ago, Brensilber reports, units were selling for $29,000; they are now being resold for $800,000.

Verrico, retired from MetLife, says that 25 years of co-op living has taught her that “you have to be alert, you have to be very financially careful where your money goes because we had so many problems at the beginning [with finances]. When the building converted, we didn’t realize this was a multimillion-dollar business. We were caught up very short, very quickly. We learned.”

142 East 71st Street
Gerard J. Picaso Inc.

In 1980, the president of 142 East 71st Street asked Gerard J. Picaso if he was interested in talking to the seven-person board about managing the newly converted 42-unit co-op. Picaso recalls that he had a “great” interview, but afterward, the president confessed to the agent that there was no way the tony East Side board would hire the young, witty agent with the bushy hair and thick mustache. They were more comfortable with the white-gloved elegance and low-key style of a larger, more established firm.

A year went by, and the president called Picaso. “I don’t care what you look like or the size of your firm,” he said. “We can’t go on like this. We hate the people we’re dealing with. The management is terrible. We want to hire you.” Thirty-two years later, Picaso, the president of Gerard J. Picaso Inc., is still personally handling the building.

“This was only our third co-op,” recalls Picaso, who had been managing rentals since 1971. When the agent took over 142 East 71st, he found that the foyer and lobby needed refurbishing. Picaso brought the board estimates of the work. They were astonished. The price of the two rooms was half of what the previous manager had projected. “They were being robbed,” Picaso says bluntly.

“Suddenly, things got more efficient,” says Barbara Sproul, who took over as president soon after Picaso arrived. The lesson the board has learned after three decades with the same agent: “If you have somebody really good, you let him do what he does – and you relax and enjoy it.”

What is the key to longevity in a management-board relationship? “Honesty – and personality,” says Picaso, who still trades quips with the board, which long ago gave up the idea of white-glove perfection. “He is funny, which, God knows, is important,” says Sproul, still president after all these years. “If you’re talking about parapet walls and piping, you need to have someone who understands the relative importance of such things. A little perspective that this is all in service of quality of life. That would be the point. This is our home. It’s about the people. Not the pipes.”

209 Garth Road
Garthchester Management

John Bonito has a particular fondness for 209 Garth Road in Scarsdale. Like a first love, that address is tied into his early years as a property manager. No wonder: although he had lived there in the 1970s, the 99-unit, Tudor-style building became something else in 1981. It was his first co-op client.

“Garth Road was an area with a lot of older buildings that were rent-controlled,” he recalls. “You could see it was deteriorating.”

He set up a phone and a desk at the site, and Garthchester Realty was born. He had his hands full. “Instead of fixing or repairing the roof, the policy had been to put a lot of tar over things,” he notes. Everything had to be redone, from the heating plant and the roof to the façade and the plumbing, with practically no money on hand to repair it. “At the time the building converted in 1976, the attorney general didn’t require adequate reserve funds,” he says.

Perhaps if he had known the enormity of his task, Bonito might have taken a pass (as his former boss at a rental management firm did, saying to the young manager that “he hated co-ops,” presumably because they had so many bosses). But he was blissful in his ignorance, learning about the idiosyncrasies of co-op management through on-the-job training.

“If you were going for a degree in property management, that building would have been perfect as your work project. It had everything, from physical problems to financial issues,” notes Bonito, who was joined by a partner, Jay Mendel, in 1983.

“We created a stamp that went on invoices that said, ‘Long Past Due,’” he recalls with a laugh. “We couldn’t pay our bills, so we would stretch them out and tried to get so we didn’t have to assess everybody, while assuring the vendors that we would make payments as soon as possible. At the same time, our company was in a growing stage. We eventually paid every bill.”

Bonito gave up hands-on management of the property in 2013. But the seven-member board, many of whose members had worked with him for a decade or more, reports that the veteran manager has made his mark on 209 Garth Road. “He brought in expertise and experience from his other properties that helped immensely,” says Barbara Bindler, who has been on and off the board for the past 10 years and currently sits as a member at large. “He gave us the big-picture view. He was good at that.”

The Sterling
209 East 56th Street
Mark Greenberg Real Estate

The building was just known as 209 East 56th Street in 1989 when Mark Greenberg Real Estate (MGRE) was hired as manager; it wasn’t until years later, when the board decided that a building name would help sales, that the co-op was rechristened The Sterling. The name’s greatest significance was in how it was devised: the board involved every shareholder, using a survey to choose a name.

That’s not unusual for the hands-on board, whose members believe in the personal touch. In 1991, the 107-unit property between Second and Third avenues was managed by a large firm that was “nickel-and-diming us, and that would drive me crazy,” says Mary Ann Savarese, who first served as the head of the tenants’ group and continued on as the president, a post she still holds. “We needed a change.”

It was a transitional time. In the 1980s, everything old was new. “It was the wild wild west in terms of co-ops and condos,” recalls Steve Greenbaum, director of management at Mark Greenberg Real Estate, which was eventually hired as manager because of the firm’s willingness to adapt to the times. “Everyone was learning about the differences between buyers and renters, between co-ops and condos, between sponsors and investors,” says Greenbaum. “There were a lot of different categories in those days.”

Savarese had worked as a commercial real estate broker, and currently works with both Greenbaum and manager James Cotter, who has handled the property for years. During that time, the five-person board has learned to listen. When shareholders complained that they weren’t getting enough financial information, the board members began staging mid-year shareholder meetings to get the data out, explaining the needs for maintenance increases with financial spreads and pie charts. They successfully co-opted their critics. That was a technique the directors learned from Greenbaum.

“A shareholder would get up at the annual meetings and say the building has to be redecorated, the outside needs more plants – something needs to be done at the building,” recalls Savarese, “and that would get our backs up, because that’s what we would work on but we could only do so much. Steve knew a better way to handle those complaints. He would get up and say, ‘That’s a great idea. Why don’t you form a committee and you come back to us with suggestions?’” Either they would form the committee and do something positive for the co-op, or they would stop complaining. It was essentially “put up or shut up.” Observes Savarese: “We didn’t think of it at the time, but it made perfect sense. That was all Steve.”

Northridge Cooperative Section 3
Delkap Management

Pam DeLorme, the principal in Delkap Management, has learned how to juggle personalities in the 28 years her firm has been managing the Northridge Cooperatives, a six-building, 400-unit complex built in Jackson Heights, Queens, in 1948. The property – like the neighborhood, a “cultural melting pot,” according to DeLorme – has transformed from a mostly Orthodox Jewish enclave to one that features a mix of cultures and age groups. The neighborhood has always been attractive to families because of its easy access to stores, supermarkets, restaurants, religious venues, and schools.

Board member Beverly Keller, the 89-year-old ex-financial services loan agent at Concord Financial, has lived in the cooperative since 1969 and served on the 12-member board since 1970, as, at various times, president, vice president, and secretary. Her sister and aunt had lived in Section 2 of the complex since 1948. She now laments that, over the years, a sense of community has been lost. “It’s just not the same. Everyone used to know everyone else in the building. Not anymore. You used to visit with your neighbors. Now no one is around; the women are working. It’s the same all over. People don’t ring each other’s bells anymore. My niece says that I don’t ring bells, either,” she adds. “It’s true.”

She recalls an incident that she says reflects a sense of looking out for your neighbors that used to be prevalent. Keller was working late one night in the management office when she slipped and fell down six steps, breaking her leg. Three porters passed the office, which to them seemed empty, and one of them became concerned. “Beverly wouldn’t go home and leave the lights burning,” he said. “Let’s go in and check.” It was a good thing that they did, too, says Keller, who notes, “I lay there for five hours; nobody could hear me; and then I heard the key in the lock, and thought I saw God. I yelled out, ‘It’s me, Beverly, come and get me!’ I thought I would be there until 7:30 in the morning. Everyone used to look out for everyone else,” she says. “It really was a community.”

230 East 71st Street
Buchbinder & Warren

Robert P.J. Booher, the board president of 230 East 71st Street, a 60-unit co-op off Third Avenue in Manhattan, doesn’t like surprises. “We want to pinpoint where our vulnerabilities are,” he says. “The roof is 10 years old. OK – how much more time can we get out of it? What are we going to do? The pointing is good, but it’s been 20 years since we last did it. When should we do it again?”

Predictability is a good thing in running a property. So is stability. Both words could be the governing slogan of Booher, who became president in 1979 when the rental went co-op. (He has lived in the building since 1971; his mother-in-law had lived there since 1943.)

It hasn’t been easy. “I wish I had known how complicated New York real estate was when I first got on the board,” says Booher. “Unfortunately, when we were new board members in a new co-op, we thought we knew quite a bit. But the reality of Manhattan co-ops back then was that it was a new frontier. At the time, there was great trepidation as to whether the concepts of co-ops could work in this town. There were a lot of problems.”

But Booher and the board persevered, and they were assisted by Buchbinder & Warren, the management company that had worked for the sponsor and stayed on. The building, built in 1927, needed improvements – plumbing, electrical, exterior work, among other items – and Norman Buchbinder, a principal in the firm, and Rosemary Paparo, the site agent from 1977-84, were there to guide the newly minted shareholders.

It’s been relatively smooth sailing in recent years. “When something’s on a good track, you just keep it in line,” Paparo says. “As a result, we don’t have crises in that building. We may have a broken pipe in the middle of the night, but nothing that’s unmanageable. We never have financial crises because we try to plan out everything with the board as far in advance as possible. We try to strategize.”

“Anticipation rather than reaction is our mantra,” says Booher, who adds that the attention to detail has paid off: “Apartments sold for $20,000, $30,000 at conversion. If you look at today’s pricing, that was a pretty good investment all around.”

1107 Fifth Avenue
Midboro Management

It was Michael Wolfe’s first co-op. The 30-unit property at 1107 Fifth Avenue on East 92nd Street impressed the young manager. “I remember walking into the building. I had always lived in a private home, and I couldn’t believe that apartments could be so big. There was a grand lobby, with a doorman and staff. It even had manned elevators. I thought they gave it that classy hotel, classy building feel.”

Classy it may have been, but the building wasn’t happy with its posh management firm, and it was suggested that the board try something different: a small West Side company. “It was my strong recommendation that we give Midboro a try,” says John Werwaiss, a current board member and former board president of 1107 Fifth, who had worked with Midboro at another building and was serving on the board at the time. One stipulation was that Wolfe be the principal person running the property.

That was in the 1970s, and both Wolfe and the seven-member board grew up together. “I learned how to interact with boards and deal with different personalities and different agendas,” says Wolfe. “You learn that your job is to be proactive but not obnoxious. At the end of the day, it’s the board’s building, not yours.”

“Michael is an exceptionally competent, responsible, diplomatic manager now,” Werwaiss notes. “He is very direct and straightforward. Every building has prima donnas, and Michael handles those well.”

Lessons for other boards about a long-term management relationship? “You’ve got to have confidence in each other,” Werwaiss concludes. “He’s got to have the confidence that you’ll back him up, and you’ve got to have confidence that he’ll execute the tasks you’ve given him.”