The Chicken and the Egg and the Hallway Renovation

Jared Rothstein, 37, grew up in the Westchester County town of Scarsdale, next to Hartsdale, where he now owns a one-bedroom apartment in the 167-unit Classic condominium. He’s the fourth generation in an 88-year-old family business that provides glass for high-end residential and commercial projects in the tristate area.

Rothstein bought his apartment in 2007, and he first joined the board shortly after that, serving for seven years. He left the board after he and his wife at the time moved out, but he has kept the apartment. Though he no longer lives at the Classic, Rothstein recently returned to the board and is currently serving as president.  
Habitat: You served on the condo board for seven years and then quit. Why did you leave the board?
Rothstein: I left because it had become a very divisive environment. They managed some things very differently than I would have, and they made decisions that I didn’t like. The purpose of a board is having this democratic system, but there were a lot of politics and strong-arming going on that I disagreed with. I just didn’t need to get involved with that.
Habitat: Why did you come back onto the board?
Rothstein: After about two years away from the board, I went to our annual picnic, a barbecue, just to say hello. A few of the board members approached me and asked me to please run for the board again. I thought about it, and it seemed like a good idea.
Habitat: Why?
Rothstein: I felt like my business experience in our company, the construction experience, translated well to running a building, because that’s mostly what boards deal with – maintenance – which has to do with construction. At the end of the day, you’re creating a community, but you’re also running a business. You have a budget to stick to. I like numbers, so I’d go through everything and see where our money is being spent and where it can be spent better.
Also, I was unhappy with where certain things were going at the building, so I ran for the board and I was elected. Now I get along with pretty much everybody on this board. I’m not a very aggressive person. I tend to think of things logically. So people enjoy having me on the board – I hope – even though I no longer live there.
Habitat: What were the things you were unhappy about, and what did you do about it?
Rothstein: It’s a 32-year-old building that hadn’t been renovated at all. The hallways and the lobby have never been updated. We have a lot of people who own units and rent them out and don’t actually live there – about 40 percent, which is fairly high for any building. We also have an aging population that doesn’t want to spend more money on the building but wants it to be kept up and looking nice.
It’s hard to get investors to really care about a building, but they do understand at the same time that it takes investments in the building to keep the rents up and keep the property up. Renovating the hallways and lobby is a project that was already in front of the board before I even moved in. A few different boards have tried a few different ways to get it accomplished, without success.
Habitat: Why was it so difficult to renovate the lobby and the hallways?
Rothstein: We have a very strange stipulation in our bylaws that, depending on how you interpreted it, said that any improvement over a certain amount of dollars requires approval of the majority of the unit-owners. Our previous lawyer had said that this project would have fallen into that category, so we had tried to get a renovation passed a number of times, but we just couldn’t get it past the unit-owners. Nobody wants to spend the money. Nobody wants an assessment for anything. A lot of people don’t make the correlation between investing in the building and having that end up with an increased property value for their apartment.
We would say, “Look, we get feedback from brokers all the time who say, ‘Oh, the apartments are beautiful, but buyers hate the lobby and the hallways because they’re dark and dated.’” It’s the egg before the chicken situation. We couldn’t get enough people to agree on aesthetics because they wanted to know how much each option costs, but we couldn’t get a cost on each option until we got a majority to agree on the aesthetics. So we couldn’t get the project moving.
Habitat: How did the board overcome this hurdle?
Rothstein: Our current lawyer went through the bylaws and said, “As a board, you are absolutely allowed to complete this project.” So that’s what we voted to do last year, then we presented it to the unit-owners – not for a vote, just more as an FYI. We put it into our budget and then started doing it. The assessment really wasn’t bad. I believe it was $780,000, and we offered all the residents the option to pay upfront with a slight discount or to pay over three years for a very, very small fee. We try and take everybody’s situation into account, and if certain people have issues, they can approach the board and ask for a special consideration. But for the most part, everybody was fine with the three-year payment.
Habitat: What do you think is most important for a board that has to overcome such hurdles?
Rothstein: Preparation. The more information you have and the better you have it organized, the easier it is to get across to people. This failed a couple of times because even with almost a year of planning, when it came down to presenting a plan to the unit-owners, there still wasn’t enough information in an organized fashion to gain the confidence of the community.
That’s a very, very hard thing to overcome. You will have some very outspoken people trying to poke holes in what you want to do and show the community maybe you forgot something. So they’ll ask, “How can such a board be responsible for renovating the entire building?” You’re going to have outspoken people, so you have to be ahead of them to show all the positive things that are going to come from a project like that.
I look at things very logically and very business-minded. I try to not be very emotional about the whole situation for anything on the board. When you let emotions play into it, it dirties and muddies the water. n