Hooray For Capital Plan - 27 East


Southampton Press / Opinion / Letters / 1861326

Hooray For Capital Plan

Congratulations to Mayor Jesse Warren and to unsung heroine Charlene Kagel-Betts for initiating a short-term capital budget program as a first step in sound fiscal long-range planning [“Range Of Improvements Are Part Of Southampton Village’s Three-Year Capital Budget Plans,” 27east.com, January 5].

I am so glad that Mayor Warren and his able village administrator are initiating at least a short-term program to avoid “crisis management.”

Look at what happens when these basic management and accounting rules are ignored: Three or four decades ago, the accounting profession finally recommended that the boards of the New York City cooperatives take a responsible view of their duty to preserve the physical assets of the co-op, as follows: (1) get a professional estimate on the remaining economic life of the building’s elements (i.e. pipes, roof, walls, etc.) and (2) budget to meet those replacement needs. Did any of the Upper East Side boards do this? Hell no! They kept on redecorating their lobby (curb appeal!) and ignoring their leaking building pipes threatening the structural integrity of the building.

Look what happens when amateurs run co-op boards in the Big City: The worst example may well be the board for 136 East 64th Street, which kept suing the sponsor during the 80s rather than replacing the building pipes.

The sponsor was exempted in his master lease from paying for assessments or increased mortgage (the way to finance capital improvements), ergo he had in effect sold the building to the tenants “as is.” Nonetheless, there were plenty of unscrupulous lawyers available for the meritorious lawsuits against the sponsor, rather than fixing the pipes.

A front page story in the New York Observer some decades ago referred to 136 East 64th as “The Incredible Sinking Building,” since the leaking building pipes had corroded structural columns in the basement, and, eventually, parallel pipes under the roof caused the roof to collapse in the late 1990s. Screw jacks had to hold up the ceiling of at least one 11th floor apartment.

The way to avoid ad hoc payment for predictable village problems is to begin an expert view, environmental and economic, of the village constituencies’ needs in the next two or three decades. It’s not by appointing political allies to a committee to skew the supposedly scientific way to find out how the village residents view the problem. The view of the residents has short-term value only.

What’s needed for a real capital budget is an expert environmental and economic review of this village and its surround in the difficult decades ahead.

Evelyn Konrad