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Winner at Work: Porter
WINNER AT WORK
Where the Buck Stops
Richard Porter believes in taking responsibility. “The worst mistake you can make is to hire somebody and then go away,” he notes. “You have to watch everything. Management companies are not going to be as responsible as you are to see that the work is done properly. The buck stops with the board.”
Porter learned that lesson the hard way: at the school of personal experience. In the 1980s, when he moved in as a renter at the 212-unit building at 60 East 9th Street in Manhattan, he was a novice to the co-op experience. “I had always lived in a rental,” he recalls. But, on the face of it, the property seemed attractive. Built in the 1950s, it had a 24-hour doorman, a common garden, and laundry facilities, and was in the heart of the bustling New York University-Greenwich Village community.
Nonetheless, Porter soon realized that he would have to take more than a passing interest in the affairs of the building. By the time the rental converted to a cooperative in 1988, he had discovered that the boiler was dying, the roof leaked, the elevator broke down constantly, and the sidewalks were badly cracked. To top it off, the budget was in disarray.
Porter ran for office and was elected board president in 1989. He was one of seven directors who knew nothing about running real estate. “We had a situation where we were new and inexperienced and thrust into this daunting situation,” he recalls. “We had to learn through on-the-job training. It was a very difficult, very demanding job. There are so many things to do. Because we were the first board, we were left with all the headaches.”
Yet Porter did not panic. Instead, he used skills he had learned working as a senior administrator in various non-profit organizations and as a vice president at a college. “In that capacity, I was familiar with budgets and management procedures,” he explains. “In terms of how it applied to co-ops, I looked at magazines like Habitat and went to seminars.” It helped that he was semi-retired and had time to spare.
The board systematically examined the various problems and then set about prioritizing what needed to be done. “You know, everybody wants everything done but they do not want to pay for it,” he sighs. “They want us to keep maintenance down, but then where does the money come from? Eighty percent of the budget is out of the board’s control: you have real estate taxes to pay, debt service on the mortgage, the payroll. Those are fixed costs.”
Luckily, the property had a healthy reserve fund, savings from a J-51 tax abatement, and a ten-year balloon mortgage at a good rate. “So we were able to go through a number of projects before we got low on funds,” he observes. “The board could tap into that for the initial capital projects that were envisioned. For future income, Porter established a finance committee to seek out financing through a new mortgage. In 1997, the property refinanced and replenished the reserves with $500,000.
With funding available, the board implemented a capital improvement program to replace the roof, install a new boiler, repair the elevators, and put down a new sidewalk. After that, the lobby and mailroom were upgraded.
During the ten years of capital work, the board turned over and the management changed three times. Through it all, Porter has been a constant source of stability. “He’s done a fabulous job,” observes Stuart Saft, a partner at Wolf, Haldenstein, Freeman & Herz, the building’s attorney. “He is very typical of a good board president. Without becoming the building’s manager, he still remains very involved, keeping control of what’s going on. He deals with shareholders and their issues without getting into individual agendas. He treats it like a business. It’s not personal.”
Porter, who just won a 1999 Habitat Management Achievement Award for his efforts, takes it all in stride. He believes that getting involved is about doing the job he was elected to do. “You can’t expect the management to have the same concerns you have,” he explains. “They have several other buildings running simultaneously. And if you’re on the board, you must be able to take the time to devote to board membership. You shouldn’t look at it is token membership. You have to give time and energy to it. You’re running a business.
“I think some board members – not my own – only think in terms of things that are self-serving. Or they may approach issues more emotionally than they should. You have to be objective. Lots of problems come up and you have to solve them rationally.”
HABITAT, December 1999