Working with Professionals Your building's in-house service providers

Most co-op and condo dwellers are well aware of the responsibilities held and services provided by their building’s top-tier contractors–otherwise known as the managing agent, the accountant and the attorney. Working as a team, this group of people facilitates the more abstract aspects of running a multi-family residence; addressing board and tenant issues, balancing the books, and keeping the whole endeavor within the letter of the law. A co-op or condo is more than just a home, however. It is also a business that employs vendors and contractors, and residents can only benefit from familiarizing themselves with the independent contractors who provide their buildings with common in-house services like laundry rooms, gyms, and basement storage facilities.

Duds ‘n’ Suds: Who’s Handling Your Skivvies?

Certainly the most widespread of building amenities, laundry facilities have long proved to be a good investment for many co-ops and condos. Generally hassle-free moneymakers, on-site laundry facilities are both a convenient amenity for tenants and a stable source of revenue for the building itself. What’s more, most companies that install washers and dryers also repair and maintain them, and some even manage them as well.

Typically, when first engaging a contractor to install washer-dryers in a building, most boards initiate a bidding process. This process, while seemingly simple the first go-round, can become increasingly difficult later on, particularly if the chosen provider insists on having the right of first refusal written into their contract. The right of first refusal clause stipulates that when a laundry service provider’s current contract with a building expires, the provider has the right to meet any genuine bid from a competitor. Should the company match the bid, the building is bound to allow that company to continue operating, regardless of whether or not the building wishes to switch vendors.

Although the right of first refusal clause has become increasingly less standard operating procedure among laundry service providers and careful negotiation may eliminate it, some companies prefer to keep the clause in their contract. Board members would be well advised to involve their attorney in review of the final contract. If a board is going to tie their building to a vendor for a long period of time, it’s in everyone’s best interest to pay close attention to a provider’s service reputation and history.

Once the board has addressed the first refusal issue, it should then turn its attention to ensuring that the laundry facilities it intends to install are of equal or better quality than facilities located outside the building. According to Howard Herman of Wascomat Washers-Dryers, a laundry service provider in Inwood, New York, "this means that maintenance contracts should provide service within 24 to 48 hours of when a building needs it, and that the equipment being installed is of top quality."

A key component in top-quality machinery is efficient energy use. For instance, front-loading machines, which can be more costly up-front, will pay better dividends in the long run because they are more energy efficient, saving the building money in water and gas charges. Not to mention the fact that they wash better and last longer, all of which translates into the building’s initial investment being earned back even more quickly.

But whether a building’s board is installing laundry facilities as a profit-making venture, a luxurious amenity for residents, or something in the middle, they need to determine how the room should be managed. A number of companies not only install the machines and set-up the room, but also provide the necessary maintenance. Wascomat, Coinmach in Roslyn, New York, and Mac-Gray Services in West Orange, New Jersey, are three such companies that eliminate the need for hands-on management by a building’s board by establishing a lease agreement that provides they run the room, service it and collect the money. Under this type of arrangement–usually performed by an operator who essentially owns the machines and rents them out–the co-op or condo is paid either a percentage or a flat fee off the total revenue generated by the machines. The service provider deals with all the paperwork, bookkeeping, and maintenance, and the board and building reap the benefits, both in profit and convenience.

Get Physical: Health Clubs and Exercise Facilities

Somewhat less prevalent than laundry rooms, in-house health clubs not only contribute to the overall prestige of a building, but often increase its market value. "It’s a top amenity in the attraction of upscale, professional home buyers," says Bob Hoshour, a commercial account representative at Omnifitness, a Manhattan-based company that sells, installs and maintains gym equipment. "A gym provides a highly-desired personal service to each and every shareholder,"

The process of installing a gym facility often begins with the managing agent or a committee of board members performing a feasibility study. Should they decide to proceed based on their findings, the committee–or sometimes the managing agent–then meets with vendors, consultants, architects and contractors in order to gather the necessary information by which to compare offers.

In assessing various offers, some of the most important issues to consider, as outlined by Hoshour, include "budgeting [of construction, equipment and maintenance]; legal issues [liability, safety, security and building codes]; know-how [employing fitness consultants]; and the availability of public space [how much is needed]."

Hoshour urges, however, that "price not be the sole deciding factor," but rather "the question that should be constantly considered is, who and what company will be there after the purchase. Who will return your calls when you have a question or concern?" Gregory Cilek of Iowa Sports Management, a fitness management and design company in Manhattan concurs, and adds, "Don’t just go by the bottom line. Ask for it to be broken down."

Which means, in the word of former Omnifitness vice president Gary Peak, "Select leading name brands of equipment, and purchase commercial equipment only. Work with reputable fitness equipment distributors, keep your equipment up-to-date, and periodically replace items or add pieces and maintain equipment in top working order."

In sum, in order to establish an in-house fitness facility that gets used and appreciated rather than gathering dust, a board must take pains to provide a quality experience for residents–something to inspire them to exercise in-house, rather than seeking outside alternatives. Says Cilek, "Create an environment commensurate with many of the City’s gyms; providing towels, water-fountains, bathrooms and exercise mats; sponsoring classes and fitness courses and just keeping things interesting for the residents."

Storage Facilities: Cages or Cubbyholes?

One of the most frequent complaints made about living in New York City is the lack of storage space. Tales abound of Manhattanites keeping their shoes in the oven and their suitcases stored beneath their beds. Because of this, many co-op and condo residents are especially eager to install storage facilities in their buildings, transforming unused basements into much-needed–and coveted–additional closet space.

Unlike laundry and gym facilities, in the case of storage systems, boards most frequently have the option of engaging in a profit-sharing arrangement with the storage unit company or of buying the units outright. Given that, the key element for boards to consider is whether or not they want to own and manage the facility, or contract these responsibilities to an outside company. Because of the New York State Lien Law, as well as the necessity of sale and disposal insurance when establishing storage facilities, the latter option is often more appealing, as it protects the building from insurance and legal risks.

One such company that provides a full storage service is Bargold Storage Systems, which builds and installs tenant storage systems at no cost to the building. By handling all the administrative services, including rental agreements with tenants, monthly billing and collections, as well as being responsible for maintenance, general upkeep and repairs, Bargold removes the onus from the board members and managing agent. Moreover, because the building receives 25 percent of whatever rent Bargold receives, they are turning pure profit on this amenity. However, for this to hold true, it is necessary for a building to be sure that people will want to rent space–and that goes double when the building is buying the lockers and managing the space outright.

In the end, as with all building amenities, it is crucial for board members to do their research before committing to a service contractor. The relationship a board cultivates with the providers of services like laundry and fitness facilities and storage companies will dictate the level of satisfaction and service the building residents will receive. Better relations and a clearer understanding of how the board/contractor partnership functions will enable all involved to derive maximum benefit from the arrangement.

Ms. Globerman is a freelance writer and former Manhattanite.

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