FINANCIAL DISASTER: PART I, P.2

To get the ball rolling, the co-op negotiated a new $7.65 million mortgage with New York Community Bank in 2002 at a rate of 6.75 percent. Two years later, it took out an $8 million mortgage with the National Cooperative Bank at a much more favorable 4.7 percent. That renegotiation alone saved the co-op $170,000 a year in interest payments.

But that was just the beginning. Instead of continuing to lease its rooftop antenna cell sites, the board sold them to a telecommunications company for $500,000 — a major infusion for the depleted reserve fund. (The fund now boasts a healthy $1.1 million balance.) Another source of income is a flat $1,000 flip tax assessed to apartment-sellers.

With the mortgage straightened out and money in hand, it was time to improve the property. The two lobbies (one at left) got a $28,000 facelift, including new doors, lights, paint, concierge station, mailboxes and intercom. The terrazzo marble floors were buffed to a high shine.

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Negotiations with labor unions enabled the co-op to reduce the professional staff from seven to five. Next came roof and sewage-system repairs, an elevator upgrade, new security cameras, repainted fire escapes and the refurbishing of 51 terraces. A pond in front of the building that had become a breeding ground for mosquitoes was removed and turned into a park. Today, the grounds are immaculately landscaped, and, thanks to a no-pets policy (with a grandfather clause), there are only a few dogs.

"When I first came here, the building was full of dogs," recalls Francisco Torrez, a porter who has been on the staff since 1973. "You couldn't walk out the side door because everyone walked their dog there and no one cleaned up after them. Now it's clean."

"When we have a problem, we address it the same day," adds Pedro Ocasio (at right), the live-in super, who has also been on the staff since 1973. "Things are definitely better now. There was a time when they didn't have enough money to give me a paycheck some weeks."

Those times are gone. Apartments that once sat empty now sell for handsome prices — about $175,000 for a one-bedroom (with a $408 monthly maintenance) up to $280,000 for a three-bedroom (with a $907 maintenance and a view of the Verrazano-Narrows Bridge).

Finally, the goal of becoming fully owner-occupied is virtually a reality. Of the 306 units, only 11 are rentals, owned by an investor who is a member of the co-op board. Another barometer of the co-op's newfound health is that the board has not allowed the suddenly soft real estate market to alter its central philosophy.

"Even with the market down now, we don't let people come in and make lowball offers or put down only five percent," Eisenberg says. "If you do that, everyone suffers. And the board feels subletting is a negative, so they banned sublets."

Since climbing out of bankruptcy, shareholders have enjoyed three maintenance decreases without any assessments. It's such a rare feat that Salm was given a Management Achievement Award by Habitat magazine in 2000.

Ask her if today's seven-member board is a harmonious group, and Salm replies, "Fugheddaboutit! Everyone on this board takes an interest, they're active and the manager always comes when we need him."

Read Part II

Adapted from Habitat June 2008. For the complete article and more, join our Archive >>

Photos by Carol Ott