$35 MILLION MAKEOVER

Originally built by William Levitt, of Levittown fame, the Levitt Houses (as they were then called) opened as rentals in 1953. With a mix of one-, two- and three-bedroom units, the development originally sported three swimming pools; handball, basketball and tennis courts; an ice-skating rink; and a restaurant, Ripples on the Water. Rooms were spacious and airy, with rows of windows, while what would now be called retro kitchens featured turquoise-colored metal cabinets.

But by the time the current board treasurer, Stanley Greenberg, moved into Le Havre in 1972, things had changed. The Levitts had sold the development to new owners, who had in turn sold it again. Not wanting the Levitt name to linger and faced with beautifully tiled lobbies sporting an "LH" logo, they came up with a moniker to match the initials: Le Havre.

But although they were good at fitting name to letters, these owners were not as good at running the property. They deferred maintenance. The cinder blocks that had been used to construct the development deteriorated, and roof and window leaks became common. By the early 1970s, the ice rink had closed, and so had one of the pools, and property owner Realty Equities was placed in receivership. In 1984, Coronet Properties, which had purchased the property at auction, did a co-op conversion. The company painted the exteriors, installed new aluminum windows and built a recreation center, Le Club, which included exercise and meeting rooms, plus a food concession.

But that didn't stop the leaks. "Management's ideology was to do repair work only if someone complained," Greenberg remembers. "And as time progressed, [the weather] continued taking its toll on the buildings."

In 2004, Michael Palladino, a hospital executive and a new board member walked into the management office and found the superintendent mulling over a five-foot-high stack of papers — all complaints about water leaks. The super told Palladino that the co-op's property manager would generally send inspectors to verify leaks in apartments, charge a lot of money to Le Havre for inspection reports and then walk away from the repairs for lack of money in the treasury. The story wasn't much better for the few roof replacements that had been done. Recalls Palladino: "They were laying tar over tar. They charged top dollar. And we got a butcher job out of it."

Believing that the 11-member board was not up to its tasks, Palladino ran for president and recruited a handpicked group to run with him. "I had no knowledge of contracts or financing," he admits. "I brought the co-op's financial statements to my accountant. He said, 'Mike, your daily budget is far below normal, you have 32 buildings leaking and falling apart, and there's not a cent in your capital budget reserve. You can only get into trouble.'"

Palladino's pitch to shareholders was equally direct: "I said, 'If you elect me, I am going to raise your maintenance, and then I'm going to raise it again. But we're going to fix this place.' The only thing I know about roofs is that they go on top of buildings — but I know how to put a professional team together."