Co-op City Times 07/21/12

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Co-op City’s official newspaper serving the world’s largest cooperative community. © Copyright 2012 Co-op City Times

Vol. 47 No. 29

Saturday, July 21, 2012

Shareholders updated on status of HUD loan guarantee; Board vote scheduled for Aug. 1

25¢

HUD guaranteed loan in final stages of negotiations I’m happy to President’s Message received from the report we moved a community. step closer to possiIn short, what President bly obtaining a potenI’m really saying is tial $621 million lowthat we want to interest refinancing loan guaranteed make sure there are no technicalities by the federal Department of Housing we are not aware of concerning this and Urban Development. Negotihistoric loan, but like many cooperations are ongoing and though things ators, the low interest guaranteed look positive, we, as a Board, have a loan with HUD looks very, very responsibility to you, the shareholders, positive. to make sure that everything in a final The fact that the terms of the agreement with HUD is absolutely the HUD loan guarantee call for just a best deal for Co-op City and that there 3% interest rate is pretty beneficial is no confusion over the terms or any and will reduce Co-op City’s unanswered questions. monthly payments by between $10 I was pleased with the interest million and $12 million each year shown by cooperators at the meeting for the next 15 years. This is clearly this week in Dreiser and the legitia plus since under the current New mate questions raised about potenYork Community Bank loan, we in tial issues not clearly answered yet, Co-op City are paying 5.75% in such as the specifics of oversight interest, and that is set to increase to possibilities if the loan agreement 6.5%. Management has confirmed goes forward. As a Board, we were that New York Community Bank prepared to vote to give Wells Fargo was given an opportunity to match Bank the green light to go ahead the Wells Fargo/HUD loan but with negotiations with HUD, but declined, which is further proof of decided instead, there was no rush the truly favorable low interest rates since the deadline for closing is still of the HUD loan. two months away and we wanted to (Continued on page 2) reflect and discuss the feedback we

Helen Atkins

The skies are clearing and a rainbow appears above Co-op City just as the financial status of the community may be stabilized for the long-term in the near future as a low-interest HUD guaranteed loan is reported to be just over the horizon. Photo by Rahsaan Credit

BY BILL STUTTIG Co-op City shareholders were given their chance to ask questions and express concerns regarding the potential $621M low-interest refinancing deal to be guaranteed by the federal Department of Housing and Urban Development at an open Board meeting on Wednesday, July 18 in the Dreiser auditorium. Cathy Pharis from Wells Fargo Bank and Riverbay Counsel Jeffrey Buss updated the community on the potential deal as negotiations with the federal agency are entering their final stages and the deadline for closing on the historic loan or losing it is now less than two months away. The Board of Directors originally planned to vote on a resolution to give

Wells Fargo the go ahead to proceed in negotiating the final terms of the deal with HUD and then close, but it was decided before the meeting to wait two weeks in order to fully digest what the community had to say after hearing the comprehensive details of the loan. The historic vote on whether or not to proceed is now set for the next regular Board business meeting scheduled for August 1st. Most of the handful of shareholders who spoke seemed positive about the terms of the refinancing loan at an interest rate estimated at this time to be just 3% thereby reducing Riverbay monthly payments by $10 to $12 million each year for each of the next 15 years, for a total of (Continued on page 4)

Riverbay successfully exports power to Con Edison during this week’s excessive heat BY BILL STUTTIG With temperatures approaching 100 degrees on Wednesday afternoon, for the second time this summer Riverbay was asked to export power to Con Edison as part of the utility’s Commercial System Relief Program. Shareholders were notified as early as Tuesday of steps being taken to reduce power usage in the community in order for Riverbay to meet Con Edison’s request to export a specific number of megawatts requested by Con Edison. Those steps, included closing the laundry rooms as of 4 p.m. Wednesday afternoon, closing down the Bartow and Einstein Community Center as of 4 p.m., shutting down the rear garage elevators, and turn-

ing off all roof fans as of 4 p.m. During the first major demand request by Con Edison on June 21st, Riverbay shut down all three community centers in order to save power, but Dreiser Community Center was kept open this time in order for an important open meeting of the Riverbay Board of Directors to go on as scheduled. Also in the previous event of June 21, it was a sunny day and lighting in the garages was shut down until needed when dusk began to take effect. On Wednesday afternoon, because of the dark stormy weather, some lighting in the garages had to be provided throughout the course of the event. (Continued on page 10)

Board approves spending $2.9M from Reserve Account (See page 2)

Board approves plan to continue improvements at Co-gen Plant BY JIM ROBERTS Co-op City’s successful cogeneration plant will take the next step forward in its development by bringing a temporary team of experienced power plant leaders to help upgrade operations over the next year. The leadership team idea, recommended by Riverbay’s ongoing cogeneration consultant Bill May, will bring two credentialed professional leaders to join the Riverbay Power Plant team to provide guidance and training to the existing plant staff. During the community’s Open Board Meeting on July 18 at the Dreiser Center,

May explained that the goal of the next step in the plant’s history will be to provide new programs and additional resources to allow the Cogen Plant to “perform at its best and with the best efficiencies possible.” After continuous study by Riverbay Management over the past year, including considering proposals by outside companies to oversee operations and maintenance programs at the plant, the decision was made to continue to manage the cogen plant with Riverbay personnel. “That self perform strategy, however, (Continued on page 3)


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