By Konrad Putzier
Co-op City, the world’s largest co-operative housing development, is looking for a new property manager.
The board of directors of the Riverbay Co-operation, which runs the Bronx Mitchell-Lama complex, has sent out requests for proposals (RFPs).
Firms can bid to manage either the entire complex, or just the residential or commercial portions.
While the current property manager, Marion Scott Real Estate, is expected to bid for the job, the RFP is an indication that a majority of Riverbay’s board of directors is willing to switch managers.
The RFP is bound to cause a stir among New York’s property management firms. “Assuming the management of Co-op City is a true property management challenge,” said Paul Gottsegen, president of the Greater New York Chapter of the Institute of Real Estate Management (IREM). “The management company must be able to provide a plethora of services way beyond the traditional management needs of a residential co-operative.”
The property manager would not only have to oversee 15,372 residential units and 275,610 s/f of commercial space, but also a 40-MW power plant, a jail, a public safety force, eight parking garages and more than 1,000 employees.
Jeffrey Buss, an attorney with Smith, Buss & Jacobs LLP who represents the Riverbay Corporation, explained that a property manager would also need “good budgeting skills” in order to keep maintenance costs for the co-op shareholders affordable. 98 percent of the complex’s annual budget of around $200 million is covered by residents’ maintenance fees, according to Buss.
Bids are due by November 19, and Buss said he expects a decision by February. To complicate matters, the property manager has to be approved not just by the Riverbay Corporation, but also by the Federal Housing Administration, the New York State Division of Housing and Community Renewal, and Wells Fargo, which granted the complex a $621.5 million mortgage in 2012.
Buss said the Riverbay Corporation has so far received requests for the full bid package from around 20 property management firms.
A pre-bid meeting is being held today (Wednesday) at 10 a.m.
One of the firms planning to bid for the job is FirstService Residential, a major New York-based property manager. The company’s New York president Dan Wurtzel told Real Estate Weekly that FirstService “has the resources to handle this project”.
Marion Scott Real Estate has been Co-op City’s property manager since 1998. Over the past years, the Co-op has spent around $300 million on capital improvements.