By Michael Horowitz
Co-op City’s board of directors has approved the hiring of Douglas Elliman Property Management to manage the day-to-day operations of the nation’s largest housing complex.
The decision to hire the Elliman firm, which has 350 real estate management clients, came following a year and a half of delays in retaining an outside company to manage Co-op City.
Co-op City’s board of directors took action last week after receiving a “notice of violation” from HUD for failing to hire an outside firm to run the Riverbay Corporation, the housing company for the co-operative with 15,372 units that is constrained by Mitchell-Lama Housing Laws.
HUD, the major insurer of Co-op City’s $621.5 mortgage since 2004, had contended that Riverbay’s loan agreement with Wells Fargo Bank required that an outside firm be at the helm of the housing company.
With Co-op City seemingly forced to accept outside management after the community’s board of directors dumped Marion Scott Real Estate, Inc., as its managers in November, 2014, the board resisted hiring another outside firm until HUD clamped down with escalating threats, which included massive fines for individual board members and the potential removal of them from their positions of leadership.
When asked for comment yesterday (Tuesday) James O’Connor, president of Douglas Elliman Property Management, said, “We remain very interested and hopeful of working with the Board at Coop City but we do not have an agreement with them at this time.ˮ
For one of the largest real estate firms in New York, the challenge facing Elliman is a new one.
O’Connor has previously said he would welcome the challenge of making Co-op City, an entity that employs 1,075 people, work as an affordable community for persons of limited means.
Those Co-op City employees include a security force of 100 men and women with a command structure, a hierarchy of managers and supervisors, hundreds of maintenance and restorations workers, and groundskeepers.
A 15-member board of directors, made up of Co-op City shareholders, sets policies for the Riverbay Corporation, the Bronx community’s housing company.
Co-op City’s managers, who are responsible for the community’s operations, take direction from the members of the community’s board of directors.
The state’s Homes and Community Renewal (HCR) agency has oversight responsibilities in conjunction with Co-op City and other Mitchell-Lama developments that are under the state’s aegis.
When the request for proposals was first issued for a new manager in October, 2014, Paul Gottsegen, then president of the Greater New York Chapter of the Institute of Real Estate Management (IREM) said, “Assuming the management of Co-op City is a true property management challenge.
“The management company must be able to provide a plethora of services way beyond the traditional management needs of a residential co-operative.”
As well as 15,372 residential units and 275,610 s/f of commercial space, Co-op City has its own 40-MW power plant, jail, and eight parking garages. 98 percent of the complex’s annual budget of around $200 million is covered by residents’ maintenance fees.