Capital Project Management Doesn’t Always Trigger a Fee

Many co-op and condo boards are surprised to learn that their management company charges additional fees for overseeing large capital projects. But not all capital projects – not even some big ones – automatically trigger a fee.

“There are capital projects that don’t require additional services,” says Doug Weinstein, the vice president of the Project Management Group (PMG), which is part of AKAM Living Services. “For instance, if you are replacing a single component in the building.” Another factor that might obviate a management fee is when other professionals have been retained for a big project, requiring minimal involvement by the property manager.

Where PMG’s services tend to come into play is whenever the residents in a building are going to be heavily affected by a project – and sophisticated coordination is called for. “Entry into apartments is always a good one,” says Weinstein, noting that entry is called for when the board decides it’s time to replace all the plumbing risers or heating systems within the units. PMG coordinates with residents when the work crew can enter. The company posts notifications so that residents know what to expect and what is expected of them. For instance, furniture may need to be covered or moved out of the way.

With proper planning, a management team can minimize the disruption and discomfort of these situations. “The better the pre-construction lineup is, the better the project goes,” says Weinstein. As an example, he cites a three-pronged job PMG recently completed for the Windsor Park co-op in Bayside, Queens, with more than 1,800 units. A project manager was installed on the site full-time to oversee the logistics of having three crews working to replace every unit’s windows, air-conditioners, and intercom system. Instead of crews going in and out of apartments on separate days to complete each upgrade, “we had all three aspects of the production being done simultaneously within an apartment each day,” he says.

For that 18-month job, PMG established a monthly fee based on having full-time staff involved. “Because if we were to charge on a percentage of the job,” Weinstein says, “there is no incentive for us to save money or look out for the client’s expense on the project. So what we do is, we determine how much time we are going to spend on the project, and then we establish a flat monthly fee for that. And if it goes over our estimated time frame, that’s our issue.”