Is there a condominium community anywhere that doesn’t need to build up its capital reserve? Looking for extra income, some communities show success with traditional fund-raising methods. But even better, new technologies are cropping up that can offer extra income to associations with land or facilities capable of hosting specialized equipment. At the same time, many “green energy” companies are looking for sites to lease for their solar or wind-power structures.

Success with these new options, however, may depend on all kinds of variables. In a small town in Massachusetts a few years ago, the town planner was surprised to hear from the deacon of the local Congregational church. “How do I get in touch with AT&T?” the deacon wanted to know. Scuttlebutt had apparently reached his congregation about the possibility of a big cellular phone company looking to site a cell tower or receiver in the town center, where cell phone service was rather spotty.

Under the town’s zoning, “stealth” towers were specified, meaning that cell phone carriers were encouraged to install receiver equipment on or in existing structures or buildings, so they’d be camouflaged. Church steeples were specifically mentioned by the Planning Board. They were usually an ideal height and could harbor the necessary electronics with no visual impact to the village “viewscape.” Church leaders soon became aware that cell phone carriers paid healthy lease fees to any landlord willing to host the equipment, worth thousands of dollars annually. The deacon was not alone in asking, “Where do we sign up?”

Opportunities to partner with technology and energy companies, and collect some much-needed income, are on the upswing. Cell phone carriers have been partnering for years now with property owners in desirable locations who have the land or structures that can accommodate receiver equipment. Despite the hurdles, schools, churches, businesses, and homeowners have benefited—so why not condominium communities?

Capturing Communities as Customers

It sounds like a true “win-win” situation, but even with ideal options for “stealth” installations, a residential community may run into zoning hurdles, or success may just be an issue of the stars being aligned or getting all of your ducks in a row. Steve Margolis, president of Margolis Management & Realty, LLC, in Hamden, Connecticut, cites an example. “I was approached by Sprint for a cell tower [on a community’s property]… They were ready to pay [rent] of $1,250 per month. The tower they proposed had room on it for two more carriers who would also pay rent. Unfortunately, abutters in the surrounding neighborhood cut it down. It eventually got installed on the roof of a nearby senior residence.”

Communities may have an edge in partnering for profit with corporations, Margolis continues. “A company like AT&T sees a community association as a captive audience… for their bundled services for DSL, phone and TV, at a per-unit introductory price.”

“For instance,” he adds, “about two years ago, an AT&T representative offered to come to a meeting, present the program, and he’d pay $25 per unit to the association just for letting [the company] in the door. Plus, they’d pay another $100 to the association for each unit owner who signed up.”

New revenue opportunities to boost a community’s capital fund should always warrant a board’s attention—as well as revisiting the old standards. Margolis admits that he has seen associations organize grass roots money makers such as, “flea markets, tag sales… even hosting a hot dog roast by the pool.” But he warns that with any new source of revenue, board members and management “have a fiduciary responsibility to use best accounting practices… for their associations.”

Communities with extra space or amenities can always open them up and charge admission, Margolis points out. “There’s a property in North Branford [Connecticut] that includes a par-3 golf course, and they offer it to non-residents to use, for a fee.”

Many communities offer similar uses of their properties to non-unit owners as a revenue-generator. These include community rooms rented for classes or functions, fitness centers, pools and tennis courts. They can be managed as an extension of the business model that is already in place to manage the community property.

There’s Insurance for That…

But does a board face extra liability when opening up their facilities to the public? “The ‘association risk’ that is addressed by most communities’ general liability insurance… doesn’t consider these [extra] activities,” states Bernie Gitlin, president of Global Insurance Network of Needham, Massachusetts. He adds that in cases where outside vendors are on the property, and paying for use of the space, “We make [them] show indemnification… a certificate of insurance.” He contends that all condo boards are “under a lot of pressure to raise funds,” but potential losses or risks must be balanced against any monetary gains. “You just need to tell your insurance company what you are doing. Boards can always buy some separate, or extra insurance… it wouldn’t be that expensive,” he notes, to cover these kinds of activities. “Plus, although there is no guarantee [of protection] you can always make users or guests sign a waiver…”

Other opportunities may not involve extra insurance. In more dense communities, especially garden-style or high-rise buildings, the laundry rooms are communal and usually pay-as-you-go. “These laundry operations can be a source of revenue for the association,” states Margolis. “There are companies such as Mac-Gray [of Waltham, Massachusetts] that will install the washing machines and dryers at your property and the association gets paid a fee.”

Negotiating for Extra Cash

At Northborough Property Management Co., of Northborough, Massachusetts, principal Michael Beyranevand agrees that laundry facilities can be a steady source of revenue. He advises, “Take a look at your laundry contracts… you may be able to renegotiate with the current vendor, or put it out to bid. It’s worth the time to do some research and find a better deal.” He has helped associations find extra income in some unexpected ways. “We had one community that rented out storage cubicles. Also, if a property has extra parking spaces, sometimes they can be rented out. We also have a community where the association provides a space, a water hose and washing equipment and they charge a fee for people to wash their cars.”

He adds jokingly, “I’ve heard of some communities that enforce their rules and regulations… and collect fines for the violations.” While fines do supply some revenue, if enforced consistently, the violations should decrease and fines collected should dwindle. One positive outcome may be that when rules are regularly enforced, they are subject to scrutiny for validity and fairness and might get updated and improved.

Margolis notes that there are compromises involved when a community earns extra revenue by hosting events and inviting non-unit owners into a condo property, “When you start opening up a private community to the public, you may have to abide by different regulations or legal standards, such as when people can ask for ‘reasonable accommodation’,” with reference to some disabilities. As far as taking on extra liability is concerned, he contends that “associations do have general liability insurance… but people can sue for anything.” This holds true for unit owners, guests, or outside customers paying for services or amenities on a condominium property.

Finding extra cash, as he points out, can also come in the form of cost savings, including “cost-reduction programs from utility companies. There are government-sponsored programs that come up from time to time. Two of my client communities have a deal going with Northeast Utilities. In one case, we had an electric contractor come in and retrofit about 30 lampposts that used to house high-pressure sodium lamps and now use compact fluorescents. We even got a no-interest loan to do the project from the utility company.”

While boards and managers may research government websites to find applicable programs for their properties, most utility companies are a good source of information, since they are usually administering the programs. Better yet, sometimes the local expert is the best resource. “To figure out what was available [for energy savings],” notes Margolis, “I called the contractor directly and he came down and took a look.”

Greenbacks for green energy

One rising technology that offers “free” money with little or no effort or extra liability on the part of the host community is solar panel installation, now being offered by firms that pay rent for use of rooftops, parking lots or other open spaces. Charles Bailey, president of the consulting firm Apollo Works LLC of Hubbardston, Massachusetts, states that his energy clients “pay rent to the property owner, often a straight 20-year lease, to install stationary PV [photo-voltaic] panels on a flat roof, with an area of at least 10,000 square feet. It can also be arranged as a discount on electricity. This works out for commercial buildings that use a lot of electricity, and works better for them than the fixed lease because you’re buying a hedge against the [future] cost of energy.”

Because “green” initiatives—from local and federal agencies—have been promoting alternative energy such as solar and wind, creative entrepreneurs are responding. Many plans and options are becoming available from green energy and telecommunication firms all over the country. All they need is a host with some usable real estate, whether it’s existing structures or open space. Many condo communities are in a prime position—they have that real estate as their common property, and should be able to take advantage of new revenue as these offers arise.

Marie Auger is a Massachusetts freelance writer and a frequent contributor to New England Condominium.