Park Ten’s Quant

Board President
John Waldes
Park Ten
Upper West Side, Manhattan

John Waldes feels his background helps his co-op, a 254-unit high-rise on the Upper West Side known as the Park Ten. A physicist by training, Waldes worked for many years in “quantitative marketing” – the use of numerical analysis techniques to provide information useful to those involved in promoting products or services. He is, in brief, a “quant.”

“There is such a need to understand costs and effects and profits,” he observes. “It’s very useful for a building to have someone who, when something is done, can determine whether or not it will be a pure loss or a possible reduction in maintenance over [time]. An obvious [example] is when you install combined heating and power units. What’s interesting about [it] is that – although the capital expense is heavy upfront – over time, given the current prices and what’s projected at least for a while, the electricity produced will be cheaper. So you should be able to pay off the installation and, in addition, give people power at a lower cost over the long term.”

Waldes, the president of the co-op, says that his training has taught him to think ahead and look at the big picture. “We are trying to identify the projects that will need to be executed over the next few years and ‘few’ depends a little bit on exactly what we are talking about,” he says. “Then we try and understand how the money we have available for capital expenditures will last, how it will be used, and then how we will get more money if indeed; as is often the case, you don’t have enough to do all your capital expenses over the next ten years. Then you have to decide whether you want to do things like raise maintenance, or refinance your mortgage, and what the interest rates will be and what that will mean, and whether you can get money out if you refinance again when this one runs out.”

“We do a lot of thinking about this,” he adds with a laugh. Waldes, a native New Yorker, has lived in the Park Ten for 24 years. He has served on the board, on and off, for a total of six years, starting in the 1990s. He initially signed up because he “thought it was useful to try and help the building or give whatever aid I could. I have worked as an engineer in [the] industry, and therefore, I know something about physical plants. Most people in the buildings in New York aren’t awfully familiar with [that subject].”

He points to the generally unpopular move of imposing assessments. “For some reason, assessments in New York are considered bad things, but it’s not necessarily true; it depends on what they are for. Using them to fund operating expenses is terrible, of course, but if they are for capital expenses, they can be very favorable. Raising maintenance for capital expenses is quite generally the wrong thing to do in my opinion. Look, if my share of a capital expense is $500 and I pay $500 in an assessment, that immediately goes to my bottom-line. If I pay $500, and I don’t pay it but it comes out of cash that’s available from a mortgage refinancing, I only get a partial credit for that. Most of it, the interest part, the principal, all divides up, so I don’t get the full $500. I get it fully as a tax benefit if I am assessed for it.”

As a man who thinks ahead, Waldes doesn’t like to be taken unawares; he says that he and the rest of the board were surprised to hear about problems inspectors found behind the building’s façade. “They kept discovering new stuff. As they went through and explored by hand, the amount of work we’d need to do kept [increasing], even just for the safety issues,” says Waldes.

He was advised that the balcony railings needed newer, improved reinforcement. Then, they discovered that the shelf angles had corroded along a few of the structure’s masonry joints. Engineers also found cracks in the travertine limestone arches above the entryways, weakening the arches and creating the danger of falling stone chips and chunks. Finally, there was stress on the masonry and support problems discovered in isolated locations all around the building.

These additional issues caused the project’s initial estimates to bloat before work even started.

Paul Millman, a principal at Superstructures Engineers + Architects, and his project managers, Georg Windeck and Mark Ingalls, say these aren’t the kinds of problems you can let linger. “Sometimes the concrete frame in buildings of this vintage shrinks more than the original designers anticipated, and the added stress results in cracking of the masonry,” says Millman. “This cracking lets in more moisture and it becomes a vicious cycle, getting worse and worse. There have been situations like this where the brick fails and walks itself off the shelf angle or collapses, and it can truly become a safety issue if it’s left unattended. People can get hurt.”

Faced with a much larger project scope than initially envisioned, Waldes and the rest of the board took an analytical approach, looking for ways to save money down the road. “The board decided to add some proactive upgrades. Once you have the rigging up and the bridges and all that, it becomes less expensive to do all the work now than to take it all down and put it back up again when those projects become necessary,” Waldes says. “If we can do things cost-effectively, while we have to do so many repairs anyway, we’re going to do it.”

There was a bit of back-and-forth on the proposed upgrade work, says Waldes. “We had more than one general meeting. Some shareholders were against it, asking why so much was being spent, and so on, but it wasn’t so vigorous that we wouldn’t go forward,” he says. “It’s funny. When you tell someone that this maintenance needs to be paid now so we can spend less in five years, that’s not just an academic finding, that’s real. We know these expenses are a good idea, financially. But that’s not always an easily accepted reason.”

Millman and the contractors from Cercone Exterior Restoration fixed the concrete balconies and added reinforcing bars, removed and replaced bricks to fix the masonry joints where necessary, and repaired and color-matched the travertine arches to keep the work seamless.

Placing the soft joints throughout the building to try and redistribute the stress that was hurting the exterior increased the budget for the entire project to $990,000, much higher than the board had initially expected. But, with these upgrades installed, Park Ten is looking forward to Local Law 11 inspections being a little more “routine.”

Waldes is also pleased with the co-op’s management firm. “About a year ago we hired Midboro and we couldn’t be happier with what they’ve done for us.”

Waldes is retired now and looks back on a career that includes postdoctoral studies as a physicist, a few years at Bulova doing research physics on quartz watches, and then a ten-year stint in France working for Michelin. When he’s not involved with board matters, he can be found working as the treasurer of The Institute for Operations Research and the Management Sciences (INFORMS), an organization that studies how marketing science and operations research works in society. “One of the talks it staged recently was from IBM concerning research it is conducting,” he says with passion. “They are doing an analysis of text messages in Uganda to try and trace where there are various issues of disease. It’s fascinating.”