Page 8 - New England Condominium July 2020

8 NEW ENGLAND CONDOMINIUM -JULY 2020 NEWENGLANDCONDO.COM Building EnvelopeYour Restoration Specialists Since 1981, Alpha Weatherproofing Corp. has served building owners and property managers throughout New England with comprehensive weatherproofing and building envelope restoration services. AFTER BEFORE • Concrete Restoration • Façade Inspection & Repair Specialty Coatings • Masonry Restoration • Sealant Removal & Replacement • Parking Garage Repair & Traffic Coatings • Historic Restoration • • Waterproofing Systems • Roofing & Roof Maintenance • Structural Repairs • Emergency Repairs 617-628-8888 www.weatherproofing.net • Request a free consultation • View projects • Sign up for our e-newsletter them without having to incur or increase debt Article 4 Limited Dividend co-op in the coun- obligations. Whether co-op and condo boards with gamated is required under the New York State healthy reserves end up dipping into them to Homes and Community Renewal (NYSHCR) handle COVID-related payables remains to be budget process to provide a two-year budget. seen. At this point, says Paul Santoriello, presi- dent of Taylor Management in New Jersey, ceived our approval for an increase in August things are still too fluid to make any solid bud- get predictions or revisions. “In three months 2021. That is the earliest date when Amalgam- at least,” he says, “boards might be at a point ated can ask for another increase—unless, for where they can see where their arrears are, and example, we decide to refinance our mortgage what adjustments need to be made for projec- tions going forward.” He is emphatic that they earlier increase. should not promise—or even consider—re- ducing or eliminating fees for amenities that such as a pandemic upend these communities’ have been forced to close, as this would wreak fiscal assumptions, it leaves them in limbo, havoc on operational income levels that are with little to no control. “Obviously, our crys- already uncertain. What is certain is that the tal ball wasn’t working in early 2019,” quips additional costs of more cleaning supplies, Zsebedics, “and like most co-ops, we could protective gear, equipment like foggers and never have anticipated the turmoil that would sanitizing stations, thermometers, and other ensue from this pandemic. … We continue new necessities will need to be accounted for. On the other hand, there might also be co-ops, state-supervised co-ops can’t decide some cost reductions; Stoller notes that capi- tal projects and construction not critical to implemented by August or September.” building function have been put on hold in the buildings he manages, and it is as yet un- clear when or in what capacity those projects says, “holding \\\[its\\\] own.” Notably, he adds, will resume. If it’s reasonable to assume those NYSHCR has been diligent in its communi- projects won’t be occurring in the coming fis- cal year, the projected costs associated with updates to the state of both its revenues and them could potentially be eliminated from the arrears. “I suspect that they may be monitor- budget. In terms of income, buildings and com- munities have been holding their breath to see for their affordable housing portfolio should how the pandemic will impact the collection of some or many fall into major budget deficits,” assessments and other fees. Each month tends offers Zsebedics. Collecting this data could be to tell a different story, and seems to be case- specific depending on location, demograph- ics, preparations, and communications. So financial difficulties that makes it much more far, Stoller says he has not seen any impact on difficult to dig ourselves out of a large deficit,” collection of fees from residents, but commer- cial tenants have been gravely affected. While in his client communities commercial rent is not part of the associations’ income stream and their budgets in a state of limbo: whether (those portions of the buildings he manages they, their commercial tenants, and/or their are separate entities from the co-op or condo individual residents will be eligible for—and portion), the demise of the businesses with receive—any type of assistance from the fed- which residential communities share space eral government in the wake of the pandemic. will likely have an impact, both financially and Small businesses that have received loans via in residents’ quality of life. Special Cases Regardless of the larger economic and so- cial landscape, any discussion of budgeting on their payments … for the time being. And should include a caveat: For cooperatives and residents who are employees of those recipient associations incorporated under various city, businesses might now have a paycheck when state, and federal housing programs, the ac- counting and reporting processes differ some- what from those of a typical co-op or condo. payrolls with those loans, or from their busi- In New York, these types of limited equity nesses reopening or resuming normal func- developments account for tens of thousands tion as state and local restrictions ease. of units of housing for hundreds of thousands of people. Charles M. Zsebedics is General Manager PPP access. This publication has reported on for the Amalgamated Housing Corporation the struggles and successes some associations and Park Reservoir Housing Corporation, in have had when it comes to loans and grants New York City, and explains some of these dif- ferences. With 274 units, Park Reservoir is the first Mitchell-Lama development in New York State; with nearly 1,500 units, Amalgamated Housing Corporation is the first and oldest try. As a limited dividend cooperative, Amal- “Therefore,” says Zsebedics, “when we re- of 2019, it was for the period up until August before then, and would have to consider an Thus, when unanticipated global events to watch closely, because unlike free market they need an increase in July and then have it For its part, Amalgamated has been close- ly monitoring its budget and, as Zsebedics cations with the co-op, requesting frequent ing whether the NYSHCR would need to implement some additional financial program an effort to “ensure we—and I am sure other supervised properties—don’t fall so far into he says. Waiting for Government Response There’s another question keeping boards the Payment Protection Program (PPP) can apply those funds to their rents, allowing at least some commercial tenants to stay current they didn’t a month or two ago … again, as long as their employers can continue to afford Co-ops and condos themselves have been in a type of Twilight Zone when it comes to approved under the CARES Act. (See, for ex- BUDGETING... continued from page 6