Look at Options Before Leaping Into Capital Projects

INSIDE TRACK – This article appears in the July/August issue of Habitat, “Insider Tips From 47 Top Management Leaders.”

We took over a building in Brooklyn, a 106-unit cooperative that had some major issues. They were having significant roof leaks. Before our takeover, they had hired an engineer who gave them estimates to do a roof replacement for $450,000 to $550,000, based on the roof containing asbestos and the need for an asbestos abatement. My firm decided, after talking to the board, that we should try to look at other options.

How could we save money? It wasn’t just the $550,000. The board was repeatedly hiring companies to repair leak damage and put patches on the roof. We brought in a contractor who we have been working with for over 25 years and tried to get another approach to the problem. He came up with an alternative: we could cover the existing roof and encapsulate the asbestos – without having to remove it. Since abatement is a complex and costly process, this would mean a major cost savings. He said he could replace the roofs on both buildings for $125,000. That will save the building over $425,000 – a major reduction.

When presented with problems, it’s always best to think about them for a while and look at other solutions that might be out there. Your first call isn’t always your best call. Ultimately, there might be more cost-effective ways to get around the problem. As this job taught us, there’s more than one way to redo a roof – and there’s probably more than one way to tackle any capital project.

Arlene Waye is principal at Awaye Realty Management.