Inertia breakthrough at Bell Park Gardens

Brian Sokoloff has spent his whole life at the Bell Park Gardens co-op in Queens, and it was a perfect place to call home – until about 15 years ago. “It used to be called the ‘Jewel of Bayside,’” he recalls, “but it had started looking shabby. The lawns were brown and full of weeds, gutters were falling apart, and the brickwork needed repairs.”

After a snowstorm last winter, Sokoloff, who commutes to Long Island, couldn’t get to his car because the drifts outside his garage had gone untouched for days. “In all my time at Bell Park [Gardens], it never took that long to plow out a driveway,” he says. “That was the straw that broke the camel’s back. I knew it was time for a change.”

One of many co-ops built in the area to provide affordable housing for World War II veterans, the 800-unit, 39-building property had aged – and so had its board, whose seven members were well into their sixties and seventies. Meanwhile, younger residents and families had moved in – they now constitute half of all shareholders – and they wanted a board that reflected the co-op’s changing demographics.

“Inertia had set in,” says Geoffrey Mazel, a partner at Hankin & Mazel, Bell Park Gardens’ attorney since 2011. “None of them had any legal or financial backgrounds. They weren’t taking advantage of modern technology. They seemed to be drifting from year to year, reacting to events instead of dealing with them proactively.”

Questions about the board’s laissez-faire style included the state of the co-op’s finances, since there had been no maintenance increases for six consecutive years, despite rising property taxes and energy costs. One of the co-op’s biggest problems was a lack of supervision, especially when it came to the onsite property manager, who’d been on the job for 16 years. Aside from not addressing problems, the manager was disrespectful and yelled at the residents so often that they had come to fear him. Not a prescription for a happy home.

Dynamic Duo

Sokoloff, an attorney, and Mark Ulrich, a CPA and accounting professor at St. John’s University who had moved into Bell Park Gardens in 2014, found they shared concerns about the co-op’s problems.

“I agreed with Brian that maintenance charges – which averaged $460 compared to about $700 at neighboring co-ops – were too low, and not covering operating expenses,” Ulrich says. “Residents weren’t being informed about capital improvements, and even though significant money was being spent on them, they almost seemed like DIY projects that were done without professional consultants. Bell Park Gardens is a multimillion-dollar corporation, but it wasn’t being run that way.”

Sokoloff adds: “All of the jobs seemed to be done by one company, which raised concerns that there might be an unduly close relationship with the board.”

Promising greater transparency and better communication with shareholders, Sokoloff and Ulrich were elected to the board in May 2016 and became, respectively, president and treasurer. “Initially, we felt shut out at meetings and got the sense that there were decisions we weren’t being told about,” says Sokoloff, adding that it was difficult to contact other board members because they resisted using email.

Things began to change when three longtime members stepped down. That gave the board newcomers the opportunity to seek new blood. “In the past, the board would have quietly brought replacements in,” Sokoloff says. “But this time we had applicants submit statements. Then we met with them, just like a job interview. We wanted to make the process transparent.”

An Energy Infusion

With three new members, the revitalized board began putting its house in order. After placing an ad for a property manager on Craigslist, members reviewed some 50 résumés before hiring Stuart Betheil, who has more than 30 years experience. “There had been a certain lack of organization and supervision,” says Betheil, who took over as managing agent at Bell Park Gardens in November 2016. “Projects like roofing work and converting boilers from oil to gas had been done, but it’s not clear whether engineers provided specs and all the work met the proper requirements.”

One of Betheil’s first actions was to upgrade the co-op’s technical and information systems. “They had three computers in the office that didn’t talk to each other,” he recalls, which was an inefficient way to keep track of data. “There was no inventory control of what materials had been purchased or what had to be ordered for repairs, and no records of operating equipment like snow plows and pickup trucks. I had to switch from paper to an electronic system to track work orders and how much money was being spent.”

Because maintenance was too low to cover operating expenses, the co-op had been using revenue from the 20-percent flip tax on apartment sales to bridge the gap – never a good idea. “That meant we were relying on every penny from the flip tax – not to build up reserves for capital projects and emergency repairs, but to pay for day-to-day costs and bare-bones essentials,” Ulrich says. “But you have no control over the real estate market or how many units are going to sell, which meant there was no guaranteed income. We had to raise maintenance by eight percent. With property taxes going up seven percent next year, we’ll have to look at future hikes and re-evaluate things every few months so that we’re charging a level of maintenance that makes sense.”

A Real Eye-Opener

It was time for a reckoning. “The board had painted a rosy picture, but I didn’t like what I found,” Ulrich says. So in October 2016, the board convened a shareholders’ meeting at which Ulrich laid out the facts in a PowerPoint presentation. Mazel, the attorney, also invited State Senator Tony Avella and City Councilman Barry Grodenchik to explain property tax laws and how they affected Bell Park Gardens’ bottom line.

“The property tax increases, which are in the double digits at many garden apartments in Queens, are a real budget-buster,” Mazel says. “People weren’t happy to hear that, but they were glad to have someone explain it to them in a comprehensive way at a shareholder meeting, which had never happened at Bell Park [Gardens] before.”

Since then, Ulrich has been busy assessing which repairs have to be done in the next 10 years and finding ways to fund them. He’s now looking into fixing up the unused space below some of the apartments to create storage areas and charging residents to rent them, and adding decks, patios, sun rooms, and more to enhance value.

For his part, Betheil says he has dozens of items on his to-do list, including putting together a guide for residents that would cover everything from the protocol for unit alterations to a list of services and how much they cost. “It’s early days, but things are moving in the right direction,” says Sokoloff, who continues to get emails and texts from shareholders saying the new board is like a breath of fresh air.

In the end, a crucial element in the success of the reformers at Bell Park Gardens was that Sokoloff and Ulrich ruffled few feathers in making the transition from old to new. “It’s easier to bring about change if you focus on issues and not personalities, because people get defensive,” Sokoloff says, noting that his predecessors on the board have been generally supportive of the new board’s initiatives. “The previous board members didn’t necessarily think that their way of doing things was better, and seeing alternatives has been a real eye-opener for them. They’re marveling at what we’ve been able to accomplish.”