Three Keys to Handling a Massive Capital Project

By the time it reached the age of 50, the 200-unit, red-brick tower at 345 East 81st Street in Manhattan needed some serious work, from the lobby to the roof. Now that millions of dollars of capital projects are winding to a completion, all parties involved agree that there were three keys to success: careful planning, constant communication, and a roster of competent players. 

First came the planning. “We have four major projects going on,” says co-op board president John Bauman. “We started two years ago when we put in three new elevators, then we upgraded the ventilation system, replacing all the fans on the roof that serviced bathrooms, kitchens and the public hallways. We are now almost done with the facade renovation. Next we will do the lobby and hallway re-decoration. All together this is a $4 million project.” 

Six years ago, aware of the building’s needs, the board refinanced the underlying mortgage, reducing interest payments and adding approximately $1 million to the reserve fund. Two-thirds of the money for the capital projects was drawn from the reserves, and the other third came from an 18-month assessment. 

The work on the facade and more than 100 balconies is being overseen by the New Jersey-based engineering firm JMA Consultants, which has done work on the building since 1999. “We will complete the facade project in the spring of 2018,” says Gene Ferrara, president of JMA. “We are somewhat delayed with the work on the last few balconies in the back of the building because the access permission from the neighboring building was held up, and now the winter weather has set in and we can’t restore concrete in low temperatures.” 

After extensive bidding, the board hired the Edras Group as contractor, and the facade project started in July of 2016. One money-saving strategy was to stretch the soft costs over two Local Law 11 cycles, Ferrara says. “The building needed special inspectors, expeditors, environmental consultants, and a site safety manager, and permits had to be obtained and signed off,” he says. “We had to make sure that we would stretch out the time until the next facade repairs are due.” 

The board opted for parapet and brick replacements, brick repointing, balcony coatings, soffit coatings, re-caulking of windows, and some other maintenance items. “We used an enhanced balcony curb-coating system,” says Ferrara. “It came with a 10-year manufacturer’s warranty and five-year contractor’s warranty.” 

The second key was open communications. “It all went so well because we had weekly meetings,” says property manager Albert Mayas of Charles H. Greenthal Management.  “The board president, the consultant, the contractor, the resident manager and us, the managing agent – we discussed all issues and our progress. We were able to tackle everything right away.  Any concerns about costs, or if additional work should be done, or when anything unforeseen came up – it never took more than one week to resolve any such issue.” 

Experience was the third key. “In this particular case we had seasoned players,” says Ferrara. “They were involved in these kinds of projects for years. We have worked with the managing agent, the board president, and the contractor for many years. We all knew what each one expected, and we all knew what to look out for. That’s why it worked.” 

Board president Bauman was especially impressed with JMA’s site manager, Patrick Riley. “I think he knows the condition of every brick in the building,” says Bauman. 

A major capital project like this also requires communication with the residents. “We did coordinate work based on an individual’s needs or requirements,” says Mayas. “Sometimes we have to help residents moving and storing their balcony furniture. These projects were also about helping the shareholders cope with all the ongoing renovation.” 

PRINCIPAL PLAYERS – BOARD PRESIDENT: John Bauman. PROPERTY MANAGER: Charles H. Greenthal Management. CONTRACTOR: Edras Group. ENGINEER: JMA Consultants. MORTGAGE LENDER: Sterling National Bank.