MAJOR CAPITAL IMPROVEMENTS: LIDO BEACH TOWERS

The Pink Lady, as it was affectionately known, had been an opulent, 300-room hotel with indoor and outdoor pools, a golf course, beach cabanas, a hotel restaurant with a retractable roof, and such stars as Sammy Davis Jr. and Barbra Streisand performing in the circular nightclub. But after the conversion to condo, residents added balconies and punched holes in exterior stucco walls to accommodate air-conditioners. This led to leaks and maintenance problems, addressed in piecemeal fashion.

"We had an enormous number of leaks," says Shari Morse, who started as a concierge in 1999 and is now the general manager, working for Kaled Management. "For years, the board's response was to patch, patch, patch. … You fixed a leak in area A and diverted it to area B."

Finally, in January 2005, with the cupolas on the brink of collapse, the board hired an architect and an engineer to do a thorough evaluation of the property. "Entire sections of structural steel were rusted right through," says Anthony Colao, president of Flag Waterproofing & Restoration, the contractor eventually hired.

The job wound up costing $700,000 — more than three times what an earlier board had allotted for the work — and that was only the start. The architect and the engineer also proposed spending $2.7 million to repair the roofs and exterior walls.

We had to convince people

that we had to do a complete job.

"We had 50 or 60 leaks, so it was almost a no-brainer to say we needed to do some serious rehabilitation," says Parish Merriweather, an architect who was then president of the condo's board. "I was the one who spearheaded the restoration. It was an unpopular thing at the time."

It would get far more unpopular. As soon as the board approved the project, problems began to surface.

"When I signed on for $2.7 million, I thought that was a reasonable approach," says Joanne Belli, a retired teacher who has served on the board for 10 years and is now its vice president. "But when they started trying to repair the terracotta [walls], it was so much more work than they'd expected. It became apparent that this type of repair was counterproductive."

When the contractor drilled a dozen probes into exterior walls to examine the building's infrastructure, he discovered that a decorative coating had been laid over the original stucco walls — and were leaking. The architect proposed adding a weather-resistant coat, which would push the cost of the project up to $4 million. A new architect in who proposed covering the building with an exterior insulating finishing system (EIFS) and also replacing the roofs, windows, doors and terraces. The cost rose to $8.5 million.

"I voted in favor of the $8.5 million," says Merriweather, "but I went on record saying this was not going to be enough. We had to convince people that we had to do a complete job." And that was a tough sell. Informational meetings were held night and day to educate unit-owners about the growing complexity and cost. In May 2006, the $8.5 million proposal was put to a vote of all unit-owners. After rancorous debate, it passed.

"I did not vote in favor of the $8.5 million," says Belli. "I felt more things needed to be ironed out, but there was a tremendous push to go forward."

A Collapse and a Crisis

Then one of the building's four external emergency stairwells collapsed. Repairing all four stairwells, which were built and maintained shoddily after the condo conversion, boosted the price tag another $500,000.

Meanwhile, the contractor kept finding unsettling details in the second architect's design work. In late 2006, the board hired the engineer Jordan Ruzz to do a peer review of the architect's plans. Work essentially stopped while the reevaluation took place. Ruzz came up with a new design that included a more elaborate and expensive system for mounting the EIFS, as well as re-engineering and replacing all the balconies.

"I took a lot of elements of what the other architect had intended, but I implemented them in a way that would work," says Ruzz. As well, notes says Joe Humann, the project manager with Flag, the building's oceanfront location means "the work has to be geared toward waterproofing. All fasteners are stainless steel; all the metal is either galvanized or metalized [using a zinc-aluminum alloy]."

The cost of doing the job right was an eye-popping $13.5 million. Realizing there would be additional expenses, such as maintenance of the neglected storm drainage system, the board swallowed hard and passed another assessment to cover the expected $15 million price tag.