FALL 2016
FirstService Residential
ADVANTAGE
FirstService Residential Teams with
Mayor’s Office to Offer Steam Heat
Seminars to Improve Efficiency
FirstService Residential and FS Energy
teamed up with the Mayor’s Office of Sustainability and the NYC Retrofit Accelerator Program to offer training seminars for
property managers and building operators
covering one-pipe and two-pipe steam heat
distribution systems. The seminars attracted more than 130 attendees.
“This is the latest initiative in our ongoing
commitment to improving the efficiency of
multifamily properties throughout New York
City,” said Dan Wurtzel, president, FirstService Residential. “To provide as many building operators as possible the opportunity
to learn how to improve the efficiency of the
steam heat systems at their properties, we
extended the invitation to members of the
city’s superintendent and resident manager
organizations.”
Representatives from the Mayor’s Office
and Accelerator team were available in the
FirstService Residential Learning Center
following each session to answer attendees’
building-specific steam questions.
The seminars covered
uuDistribution basics and maintenance
best practices
uuIdentifying common problems and
implementing operational improvements
uuMost common and feasible measures to
optimize efficiency, reduce energy consumption and save money
uuWhat to expect when completing the
steam portion of your LL87 study
uuEnergy Retrofit Treasure Hunt: A competition to find the largest energy opportunity in the FirstService Residential
portfolio.
The NYC Retrofit Accelerator is a one-stop
resource provided by the city to help multifamily buildings reduce operating costs and
increase the sustainability of their properties through energy and water upgrades.
Luke Surowiec, from the NYC Retrofit
Accelerator team, explains the free advisory
services available to building owners to reduce
their operating costs, increase the value of their
assets, and improve occupant comfort.
For more information, contact Kelly Dougherty,
Director of Energy Management, FS Energy,
at (212) 324-9036 or kelly.dougherty@
fsenergyservices.com.
Message from the President
Our Commitment to
Continuing Education
and Professional
Development
At FirstService Residential, continuing
education is an essential
ingredient
that arms our property managers with
the knowledge and
skills necessary to
Dan Wurtzel
effectively respond
to the numerous
challenges and complex demands of
managing multifamily properties in New
York City.
Our associates have access to a robust
library of eLearning resources through
FirstClass, our school of professional
development. The program offers online courses, audio books, videos, and
live, instructor-led webinars designed to
help our team members advance their
skills, improve their service delivery and
achieve their personal career goals.
To ensure that our managers are well-informed on the latest industry developments, FirstService Residential also regularly hosts seminars and educational
programs during which industry leaders
share their knowledge on timely topics. Due to the number of managers we
employ, these experts know they will be
addressing a large, attentive audience.
continued on page 2
ADVANTAGE • FirstService Residential • 1
Letter from the President
continued from page 1
That’s why we are able to attract key industry leaders to address
our teams directly. Recent seminars have covered
uuAmnesty for Violations: Attorney
Tim Mitchell addressed Local Law
45 of 2016 which established a
temporary program to settle outstanding Environmental Control
Board (ECB) judgments issued
by the Department of Buildings
(DOB). Mitchell covered requirements for amnesty, consequences
for failure to correct outstanding judgments and violations the
program does not cover, such as DOB civil penalties for boiler
and elevator inspections and criminal/civil court judgments.
The program runs from Sept. 12 through Dec. 12, 2016.
uuHuman Rights Law: Ted Finkelstein
from the NYC Commission on Human Rights addressed laws that
protect the rights of disabled
individuals—such as the Americans with Disabilities Act and
the Federal Fair Housing Act.
Finkelstein discussed how these
laws specifically apply to multifamily properties in New York City, including the building owner’s
responsibility for making modifications to accommodate
such individuals.
FirstService Residential
Program Enrollment
52
182
10
2 • FirstService Residential • ADVANTAGE
Buildings
Enrolled
Buildings
Enrolled
Buildings
Enrolled
uuLabor Relations: Attorney Robert
S. Schwartz from the Realty Advisory Board on Labor Relations
(RAB) spoke about matters related to staff whose employment is
governed by the 2014 Apartment
Building Agreement between the
RAB and SEIU Local 32BJ. Topics
included differences in wages
and benefits for vacation relief employees, the Family and Medical Leave Act, reduction in force actions, best practices for progressive (corrective) discipline, exemptions from transit benefit
laws and 421(a) prevailing wage rate issues.
uuQuality of Life: Attorney Aaron Shmulewitz, from Belkin Burden
Wenig & Goldman, covered the effective use of warning letters
for resolving common neighbor disputes regarding noise, odors
and other quality of life issues, challenges to enforcing house
rules, breach of warranty of habitability, when to involve the
building’s attorney and when to litigate. He also covered the
importance of making a good faith effort to bring the issue to
resolution, including when to engage an odor migration expert
or acoustical engineer to investigate.
uuEnergy Efficiency: Luke Surowiec, LEED AP, from the NYC Retrofit Accelerator Program, spoke about the city’s new program
that provides owners and operators access to a team of building experts who can provide independent, customized technical assistance and advisory services—at no cost—to increase
the value and sustainability of their properties through energy
and water efficiency upgrades. You can learn more at https://
retrofitaccelerator.cityofnewyork.us/.
uuZero Waste: Jessica Schreiber from the NYC Bureau of Recycling and Sustainability spoke about the city’s e-cycleNYC,
re-fashioNYC and organics collection programs.
continued on page 3
Letter from the President
continued from page 2
Continuing Education for Building Personnel
We also know it’s equally important for your building personnel
to have a thorough understanding of your property’s equipment
and systems. Benefits include enhancements to safety, efficiency,
system operations and resident comfort, as well as a reduction in
maintenance costs and fewer service disruptions.
In addition to our recent Steam Heat Distribution seminar (see
page one), we recently invited all superintendents and resident
managers to attend one of six certified Occupational Safety and
Health Administration (OSHA) training sessions. Led by a loss prevention specialist, the training broadened attendees’ knowledge
of workplace safety and the recognition, avoidance and prevention of health hazards in their buildings.
In October, we have arranged for the NYPD’s Counterterrorism Division to conduct a seminar for our managers and building staff on
preparing for terrorist attacks, active shooters and other threats.
Continuing education is part of our commitment to making a difference, every day, for you and your residents.
Wurtzel to Teach
Onboarding Course at
CNYC Housing Conference
Dan Wurtzel, president of FirstService Residential, will be teaching a
course covering best practices for
“Onboarding New Board Members”
at The Council of New York Cooperatives & Condominiums’ (CNYC) annual
housing conference. The full-day conference—to be held
at Baruch College in Manhattan on Sunday, November 13,
2016—features courses led by industry professionals that
are designed to help board members better understand
the business of managing their building. Many FirstService
Residential board members have found this to be a valuable educational event. Advance registration is required
for attendance at classes. For more information, go to
www.cnyc.com/ahc/welcome.php.
55 Wall Street Embarks on $8.3 Million Project to
Cut Energy Costs, Consumption and Emissions
The Cipriani Club Residences, located at 55 Wall Street in
Lower Manhattan, is making an $8.3 million investment in
a multifaceted energy efficiency and cogeneration project.
Once completed, the building stands to reduce its energy consumption and related emissions by 42 percent, as well as cut
energy costs in half—saving $900,000 annually.
“This project is being financed with a $6.75 million loan from
the New York City Energy Efficiency Corporation
(NYCEEC), a non-profit that develops financing
solutions for clean energy projects,” said Chris
De Weaver, a managing director for FirstService Residential who helped to orchestrate
the project. “The loan is being provided
as a ‘no upfront cost’ solution, not requiring any project-level investment
by the building.”
On top of the loan, the project qualifies for $1.6 million
in rebates from the New
York State Energy Research
and
Development
Authority
(NYSERDA)
and
Con Edison.
The project centers around a 750kW combined heat and
power (CHP or cogeneration) system, which will generate
electricity onsite and use excess heat from the process for
heating and cooling. With onsite generation, CHP offers the
building’s residents resiliency in the event of outages, important in a neighborhood that was flooded after Hurricane
Sandy. Cost reduction and energy efficiency measures include new lighting, elevator upgrades, natural gas boilers
and reliable, energy-saving variable frequency drives for
major equipment.
“The NYCEEC loan allowed us to do all the recommended improvements in our Local Law 87 energy audit,” said Gregory
Brennan, president of the 55 Wall Street condominium association. “In addition, their engineers helped us to better understand how to maximize our savings opportunities.”
55 Wall Street was converted to a 107-unit condominium
in 2006. “We are taking a classic Greek Revival building and
making it part of the new Green Revival,” said John Aiello, senior property manager for FirstService Residential, which has
managed the building since 2014. “It’s great for our residents
and for the building’s bottom line.”
ADVANTAGE • FirstService Residential • 3
Financing Capital Improvement Projects
Has your board set aside sufficient reserve funds? Studies show that
72 percent of association-governed communities are underfunded—
a 12 percent increase from ten years ago*.
By Drew Ahrensdorf, Vice President, FirstService Financial
Many associations have not increased
assessments at the pace required to adequately service an aging property. This
deficiency has rendered some boards incapable of funding unexpected expenses, such as replacing major equipment or
addressing structural or life-safety issues
stemming from compliance with local laws.
Traditional Funding Paths
When it comes time to fund a restoration job or a capital project
that will significantly enhance the value of the property’s units, your
governance board should look at these three traditional funding
pathways.
1. Reserves: Boards should undertake a reserve study that will
predict future replacement costs and the timeline for restoring
all community common elements. These studies are critical in
guiding boards towards implementing appropriate increases
in assessments and ensuring the economic security of the association. Boards should look first to their reserve study and
their reserve fund to determine the ability to fund a project
without increasing assessments to their unit owners or shareholders or sacrificing the property’s financial stability.
2. Special Assessment: If your reserve funds aren’t enough to
cover the cost of the capital project at hand, many board’s resort to imposing a one-time special assessment. Typically, a
special assessment requires that all owners or shareholders
FirstService
Financial closed 14
loans totaling $95
million for FirstService
Residential condos
and co-ops during
the second quarter.
make an unscheduled, one-time payment to the association. This strategy
is the answer to avoid
incurring debt; however, a special assessment can cause
financial hardship for those who
can’t afford a large payment over a short period of time. Prior
to any decision to levy a special assessment, the board needs
to factor in the association’s governing documents, state laws
and the structure of the payments.
3. Bank Loan: Borrowing money for capital projects has become
common practice in the community association industry. Unlike a special assessment, a bank loan allows owners to pay
for the construction project over a long period of time. With
interest rates at historic lows and a competitive banking landscape driving down the cost of capital, accessing financing
has become an attractive funding strategy.
Qualifying for a loan requires meeting various criteria set by a
bank’s credit policy. The main factors that influence a credit decision relate to delinquencies, the number of rented units, ownership
concentration, developer involvement and the relative size of the
projected assessment increase.
Typically, association loans are fixed rate, self-amortizing term
loans that are structured one of two ways:
uuFully-Funded Term Loan: This method allows the building to
take all the loan proceeds at closing, and begin paying principal
and interest in equal installments for the life of the loan (like a
typical home mortgage). If the board knows exactly how much
the project will cost and is sensitive to interest costs, this is the
preferred method.
uuNon-Revolving Line of Credit Converting to a Term Loan: This
method begins with a non-revolving line of credit, commonly
called a “draw period.” During the draw period, the association
draws down the funds necessary for ongoing capital work and
pays interest-only payments on the outstanding amount. As the
project nears completion and final invoices are submitted by
the contractor, the association “terms out” the loan and begins
paying both principal and interest to amortize the loan balance.
continued on page 6
* Association Reserves, Robert Nordlund, October 2013
4 • FirstService Residential • ADVANTAGE
FS Project Management and FS Energy
Case
Study
Gas Conversion Significantly Reduces Utility
Costs and Emissions for Upper West Side Co-op
SITUATION
Danielle Apartment Corporation, a 79-unit cooperative located at 140 West 71st Street
in Manhattan, was burning
highly-polluting heating oil
#4, which New York City has
mandated be phased-out by
2030. To comply with the city’s
order to convert to cleaner fuels, and in an effort to reduce
the building’s carbon footprint,
lower fuel expenses and better
control heating distribution,
the board reached out to FirstService Residential for guidance on
determining if these goals would be achievable by converting their
boilers to natural gas.
PROJECT SUMMARY
Project Cost
$191.470
NYSERDA Incentive
$20,000
Cost to Building
$171,470
2014 Utility Bill Savings (vs 2013 costs)
$56,630
2015 Utility Bill Savings (vs 2013 costs)
$100,076
Construction Timeline
8 months
Payback Period
<15 months
COSTS AVOIDED
Savings from FSPM Contract Negotiations
$34,000
Avoidance of Oil #4 to #2 Conversion Mandate
$10,000
TOTAL
$44,000
2013
2014
2015
Electric
$16,688
$18,095
$15,461
Natural Gas
$2,097
$17,476
$36,548
Fuel Oil
$133,300
$59,884
$0
TOTAL
$152,085
$95,455
$52,009
SOLUTION
FirstService Residential turned to its project management subsidiary, FS Project Management, and to its energy advisory subsidiary,
FS Energy, to conduct a feasibility study for the project. They engaged a team of contractors, as well as the local utility, Con Edison,
to develop a comprehensive analysis of the costs, timeline, process
and potential savings for the board to consider.
FS Project Management negotiated $34,000 in savings for the
building, or 15% of the project costs.
The feasibility study showed that by converting the boiler to natural
gas, a 27% return on investment would be achieved, equaling an average annual savings of $50,000. On top of that, the building would
circumvent converting to oil #2 to comply with the city’s mandate—
a cost estimated at $10,000.
OUTCOME
FS Energy and FS Project Management secured a $20,000 incentive grant through the New York State Energy Research and Development Authority (NYSERDA) which reduced the total project expense to $171,470.
The board voted to proceed and retained FS
Project Management to ensure proper oversight and timely completion. As the building’s
representative, FS Project Management managed all aspects of the project from contract
negotiations,
AFTER
resident
communications and
contractor oversight to utilities
coordination and
punch list completion. Due to
its industry relationships and negotiating power
with contractors,
In two years, the building’s utility bills dropped by 192%, or $100,076
when compared to their 2013 utility expenses. The building has
also saved an estimated 105 metric tons of CO2, the equivalent of
22 passenger vehicles driven for one year.
BEFORE
The building further increased system distribution efficiency by installing 19 indoor air sensors throughout the building. By sending
real-time temperature data to the boiler control system, balance
and efficiency of the system was increased, saving approximately
5-10% of their fuel expenses annually.
“By converting the building’s boiler to natural gas, we were able to
save $50,000 annually on our heating bill. This enabled us to reduce the building expenses and keep maintenance costs in check,”
says Shlomo Spritzer, board treasurer. “In addition, we now have
the option to switch to oil #2 and be in compliance with the city’s
regulations. And since natural gas is the cleanest-burning fossil
fuel available, we can reduce carbon emissions by over 40%.”
ADVANTAGE • FirstService Residential • 5
ADVANTAGE • FirstService Residential • 5
Hoverboards: Should Your Bylaws Be Amended
to Ban Them?
The U.S. Consumer Product Safety Commission (CPSC) has recalled 500,000 hoverboards, also known as self-balancing scooters. The lithium-ion battery packs on these devices pose a serious
risk of overheating that can result in the devices smoking, catching
fire and/or exploding.
There have been numerous reports in the media of individual
apartments sustaining damage when a battery pack was left unattended while charging. As such, several FirstService Residential buildings have either banned hoverboards or imposed rules
against them.
One co-op board recently adopted a house rule that strictly prohibits the presence of hoverboards in the building. Another inserted
this amendment into the house rule section of their bylaws:
“Hazardous Devices: No shareholder may use, store or permit
the use of any material, device, apparatus, vehicle or other item
which is considered highly combustible and/or poses a considerable risk of fire or other hazard or which has not met federal
safety standards. This includes but is not limited to the use of
hoverboards and any other motorized leisure vehicle or product
which has been banned entirely or where use has been restricted
under local jurisdictions.”
Should your co-op or condo board consider prohibiting the presence of hoverboards on the property or the storage of such devices
within individual units?
“If the board elects to amend the bylaws, rules and/or regulations
to address the risk associated with these devices, it should consult
with the building’s attorney,” says Benjamin Kirschenbaum, vice
president and general counsel, FirstService Residential. “Any new
rule must be adopted in a manner that will be enforceable against
a resident who does not adhere to the rule.”
Financing Capital Improvements
continued from page 4
This option is more expensive because principal is not being paid
down during the interest-only draw period. However, many boards
prefer the flexibility of borrowing only what they use, and are comfortable paying a premium for that convenience.
Attractive Features and Flexibility
There are many attractive features of association loans that give
boards a tremendous amount of flexibility:
uuFirst, there are typically no prepayment penalties for making
additional principal payments or paying the loan off entirely. In
most cases, the only time a prepayment penalty applies is if the
loan is refinanced with another lender.
uuSecond, most banks will lend up to 10 years but increasingly
banks are extending amortization to 15 or 20 years. This reduces
the monthly payment and makes financing more affordable for
unit owners or shareholders.
6 • FirstService Residential • ADVANTAGE
uuThird, closing costs are minimal for association loans. Since
there is no physical collateral, the title and attorney fees are
much lower than if real property was involved. The collateral of
an association loan is the assignment of the assessment income (in the event of default, the bank steps in and receives the
assessment income).
Bank loans are a creative way to establish a payment plan for owners or shareholders. Banks are willing to customize the financing
structure to fit the needs of each project. As more and more banks
service the community association industry, this drives down the
cost of financing, enables better terms and conditions and provides associations with more options.
If you anticipate a financing need in the near future, please speak
with your property manager or FirstService Financial’s Drew
Ahrensdorf at (212) 324-9081, to walk you through the process.
FirstService Residential Managing New York’s
First Micro-Unit Apartment Building
FirstService Residential has added the city’s first micro-unit apartment building to its management portfolio. Located in Kips Bay,
Carmel Place is a nine-story development comprised of 55-units
each measuring approximately 300 square feet.
“As the first housing design of its kind in New York City, Carmel
Place serves as a groundbreaking prototype in size and infrastructure that sets a new precedent for multifamily residential living,”
says Dan Wurtzel, president, FirstService Residential.
Carmel Place features a community room with pool table and television, fitness center, roof deck with a grill and lounge and a virtual
concierge, among other amenities. Select residences are serviced
by Ollie, an amenity and lifestyle provider that includes weekly
housekeeping by Hello Alfred, an app-based personal butler service, as well as access to activities and common areas at other
buildings within the Ollie network.
“Carmel Place demonstrates that quality of living is not dependent on the size of the space in which one resides,” adds Wurtzel,
“if that space is intelligently designed and supplemented by stateof-the art amenities.”
A Night Owl
Breakfast
A Night Owl Breakfast was recently launched at 100 United
Nations Plaza. The quarterly gatherings, organized by FirstService Residential General Manager Drew Kanter, provide
an opportunity for the overnight staff and management to
interact face-to-face and discuss ongoing building issues.
FirstService Residential has managed the 237-unit condo
since 2012.
FirstService Residential
Publishes Hurricane
Preparedness Guide
Pictured L-R: Frank Baber, Resident Manager; Gabor
Sebestyen, Concierge; Drew Kanter, General Manager; Courtney
Baur, Door Attendent; Thinzar Kyaw, Assistant Property
Manager; and Ronny Cochachi, Concierge/Door Attendant.
The potential for a hurricane to impact New York City is
greatest from August to October. FirstService Residential
has created a Hurricane Preparedness Guide—a tool filled
with instructions, checklists and links to city resources—
to help your building staff and residents prepare to weather any storm. Download it today at www.fsresidential.com/
nyhurricaneguide.
ADVANTAGE • FirstService Residential • 7
622 Third Avenue
New York, NY 10017
www.fsresidential.com
FirstService Residential Receives
Awards from New York Building
Managers Association
FirstService Residential was named Management Company of the Year by the New
York Building Managers Association (NYBMA) at the group’s 96th Annual Grand
Ball. Founded in 1917, the NYBMA is the oldest organization comprised of resident
managers and superintendents from across New York City.
In addition to the company-wide honor, several of our associates were presented
with Honorary Member Awards in recognition of their support for the NYBMA.
Advantage is published for board members and
owners of properties managed by FirstService
Residential. While every effort is made to achieve
accuracy in this publication, it is not intended
as advice to any property, and FirstService
Residential shall not be liable for any damages
resulting from reliance on the accuracy of
information contained herein.
Have a comment about this newsletter? Send an
email to [email protected].
FirstService Residential supports the highest
social and environmental standards. We are
contributing to conservation and responsible
management by using FSC-certified
paper and print products.
FirstService Residential’s Green Mission
(Pictured L-R): Keith Werny, president, CityLine Division; Maria Auletta, senior
property manager; Tom Padilla, senior vice president; Tom Smajlaj, president,
NYBMA, and his son; John MacGowan, managing director; Scott Casazza, former
president, NYBMA. Missing from photo is Marc Kotler, senior vice president.
8 • FirstService Residential • ADVANTAGE
Environmental responsibility is a corporate value
for FirstService Residential and our subsidiaries.
By striving to set a green standard for the real
estate industry, we aim to find opportunities—
within our operations and for our clients—to
develop innovative and cost effective solutions
that promote environmentally sound practices.