LONG-RANGE PLANNING P.2

En-Power studied the building's energy systems and developed a laundry list of possible improvements, along with estimates of the costs and the amount of time it would take for the improvements to pay for themselves. The first two projects, with grant assistance from the New York State Energy Research and Development Authority (NYSERDA), were a $25,000 replacement of all fluorescent lighting with high-efficiency T-8 fluorescent bulbs, and the installation of $20,000 worth of new controls on the building's two boilers. A subset of that was the installation of two new boilers to produce domestic hot water, a $250,000 job with a four-year payback.

With city mandates looming, the board went ahead and converted the heating system's fuel from No. 6 oil to natural gas — a $175,000 task with a one-year payback through reduced fuel costs. Another major job was the $250,000 replacement of the aging rooftop chiller that cools water for the fan-coil units in every apartment. Scorrano calls these improvements "gifts that keep on giving."

According to Plan 

Following its long-range plan, the board is now considering installing a combined submetering system for heat and power, plus an update to the air-conditioning system. "They're definitely a proactive board," Scorrano says. "They looked at both capital and energy-saving projects, and they're doing it over time because that's the right way to do it. As equipment wears out, they'll be ready to replace it."

With the major infrastructure work completed, the board is now putting the finishing touches on $1.5 million worth of exterior projects that mix function with aesthetics. A taxi smashed into the front of the building five years ago, and the board, after making temporary repairs, then took the opportunity to beautify the damaged vestibule, enlarge the driveway and replace the sidewalks on all three sides of the building.

In October, as it checked off the last items on Rand Engineering's original five-year plan, the board re-hired the firm to develop a new blueprint — a tacit realization that long-term planning is not something a board does just once. It's an ongoing process.

"We know that all of the uncontrollable costs — for water, energy, taxes — will continue to rise," Feigin says. "If a board is not proactive in addressing these expenses, it's being irresponsible. People in this building still complain about our energy costs, but it would be so much worse if we hadn't taken these initiatives."

An Ounce of Prevention...

But given that long-range vision doesn't come cheap, is this an option available only to well-off buildings?

"Not really," insists Steve Decker, an account executive with Cooper Square Realty's Goodstein division, which has managed 180 East End Avenue for the past seven years. "You need a board that takes its time to prioritize what it wants to do. A lot of it is foresight — preparing — and knowing what the issues are and budgeting for them properly. That way, you can do it without heavy increases in maintenance and assessments. This board was successful at upgrading because they spread it out over several years and looked for the best prices."

Michael Dirzulaitis, the board's treasurer and also a commercial real estate consultant and developer, agrees, noting: "If they think it through, anyone can set up a long-range plan financially. You have to systematically think through the systems in the building. How old are they? Is the elevator creaking? Is the façade leaking? Whatever your resources are, you need to make a plan to set aside resources to renew your infrastructure." 

While the board and shareholders at 180 East End Avenue have demonstrated that they're willing to take the long view, Dirzulaitis stresses that this doesn't mean the board has a blank check. "There's a disposition on this board — and in this building — to look at opportunities for upgrading, not just maintaining, the property," he says. "But it's got to be strategic and prudent. It can't be willy-nilly." 

As Feigin sees it, long-range planning is not about the money; it's about every board's responsibility, both to its current constituency and to future generations.

"You have to figure out how to budget for this," he says. "We're looking at 2012 and we can see that we're facing a $400,000 deficit — unless we raise maintenance. You have to figure out how to budget, and you have to rely on consultants and your professionals. If you don't plan ahead five, ten years, you're passing on a mess to the next board."

From the January 2012 issue of Habitat magazine. For print-magazine articles back to 2002, join our Archive >>