The Hidden Price of Delaying Your FISP Inspection

An 18-story Upper West Side condo thought they were being financially prudent by delaying their facade inspection. Instead, they ended up paying half a million dollars more than they should have. Gene Ferrara, president at JMA Consultants, walks through exactly what went wrong with this building and why the problems kept compounding. The terracotta repairs turned out to be far more complicated than anyone expected, involving structural steel issues and difficult conversations with residents about moving furniture. The delays meant dealing with access agreements that became increasingly expensive and complex. Ferrara explains what this building could have done differently and offers specific guidance on timing that could help other buildings avoid the same costly mistakes. The technical details are fascinating, but what really comes through is how much money and headaches buildings could save with better planning and honest communication. Habitat’s Emily Myers conducts the interview.

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Transcript

Emily Myers: Welcome to Problem Solved, a conversation about the challenges facing New York co-op and condo board directors. I'm Emily Myers with Habitat Magazine and I'm joined by Gene Ferrara, president at JMA Consultants. Gene, great to have you with us.

Gene Ferrara: Nice to have with you as well. Hope you're staying warm. 

Emily Myers: In this episode we are going to talk about facade repairs, specifically how to save money with early planning for inspections and maintenance, and why it's so important to have compliance records, especially if your engineering consultant or property manager has changed.

So let's kick off our conversation with a look at an 18 story condo on the Upper West Side that delayed its facade inspection. Gene, can you explain why they did this and what the impact was? 

Gene Ferrara: What happened is they were going through different managers, but also they had a situation where there was financial concern.

They were concerned about doing the inspection, then they would be mandated to do certain work. The reality is it's gonna have to get done and projects just don't get inspected today and started tomorrow. And that's how it all started. Starting late in the cycle for FISP, and then having to do a project, which was a landmarks project, DOB permitting project, specialty materials projects.

So it needed an extensive pre-planning stage before you could even get going. 

Emily Myers: Okay, so we're now in FISP cycle 10, running from February, 2025 to February, 2027. What's the status of the project now? 

Gene Ferrara: We're just about ready to get going with the project because we've gotten some access agreement issues, but the project's about to start and what happened is this is a holdover from the 9C Cycle.

And, people don't realize that it takes about six months from the time you figure out what you're gonna do to the time you're doing what you need to do. And so that period of time the C cycle had finished and now we're about to open up the 10A cycle. We're filing extensions of time, our permits are just about all pulled at this point in time. So probably next month we'll actually start the project. 

Emily Myers: And what is needed on the facade? What kind of facade are we dealing with? 

Gene Ferrara: Full extensive terracotta replacement. We have issues concerning the actual steel behind the structure.

Why did the terracotta crack? That's what a lot of people don't figure out. We'll just caulk it, we'll just pin it. No. More extensive research has to go into it. And when you have structural steel laying behind it can cause multiple problems. And those multiple problems can mean multiple dollars.

And then also multiple time. And then sometimes you actually have to take the people out of the apartments to shore up the interior so the work can be done. So it's very complicated. So the sooner you start, the more unknowns get put out of the way so that the project can run smoothly. To give you an example, I got a project two years now on the east side, similar type of building where we found structural steel problems.

And because the occupant on the inside doesn't wanna move a piece of furniture or art, it is become very complicated. And that again, it's just time and money. And, time and money in New York City is getting more expensive as the days go first. 

Emily Myers: And so how have the delays impacted?

The cost of this project? 

Gene Ferrara: You have the rental fees for the bridging the pipe staging and so forth. But even more importantly, you have the access agreements , with the neighbors, and many of those go on a monthly basis. So you're paying fees and if, God forbid, you have a neighbor that has a terrace, a penthouse terrace next door, and that penthouse terrace, his owner is, he's upset.

It's not his building that has to be worked on. And he wants some sick amount of money per month. It adds up very quickly. It could be a hundred thousand dollars in a given year, and then, going to court and the legal fees. Access agreements right now are probably the major reason why projects are held up around town.

And I don't know if you saw, but I believe you guys made a mention of the Senate up in Albany is trying to pass a bill, and hopefully they can, 'cause we've been pushing it, to make some type of streamline in in how access agreements are formed, what the payouts are, and how they are going to be handled in the future because this is what's causing problems around town.

Emily Myers: And is access agreements a problem for this building? This condo on the Upper West side? 

Gene Ferrara: Yes. Yes. And almost every building we have. . And if you're lucky, it's only one neighbor that may need your assistance in the future. Most of the times it's four neighbors that are lower and will never need your assistance in the future, and that becomes the most difficult type of access agreement.

Emily Myers: So can you provide an estimate of how much this particular building perhaps could have saved with better planning? 

Gene Ferrara: Probably close to about 500 to $600,000, because the way that we would've went about the project would've been as rushed. And the pricing of when it was purchased and certain other things that are in the marketplace probably would've saved considerable amount of money.

Now, what I tell my clients is, if you're in an A cycle, you should be doing the inspection six months before it even opens. Most of my proposals right now for the 10A cycle have been put out. So the cycle has not even opened up. And I tell my clients, I tell 'em every time, please, don't wait till the last month of that cycle to retain an engineer.

You're gonna get hurt. And it's not only us, it's the boom truck companies, the scaffolding companies. And now the DOT has kicked in this beautiful new way of going about giving permits for the boom trucks. You can only do it on the weekend. You can only do it between the hours of six o'clock at night and three o'clock in the morning.

It's getting more and more difficult. So when you have enough weekends in a cycle for two years, you can spread it out. But if everybody waits till the last minute, there's only so many boom truck companies and there's only so many weekends that you can work. And they're normally very cold. They wait and we freeze.

That's the way it works, but that's how it goes. 

Emily Myers: Okay, so that's a good reason not to delay because you get a crunch at the end. 

Gene Ferrara: With all the contractors, with all the engineers and so forth. And what good is it doing you? You may have that opportunity to budget and have an assessment now. You learn about it in the beginning of the cycle. You plan for it. You have six months, or maybe you wait a year to start the project, but in the meantime, you've been assessing for the monies and it's not as much of a shock on the shareholders. Because that's the next thing you see the shareholders freaking out because they have all these added expenses and I don't blame 'em to some extent.

 I don't think it's a board's fault as much as it is, there's so many things they have to pay for. As you guys report in your magazine. Seems every week there's a new law, code, or something to follow. 

Emily Myers: Did a property manager or engineer change have any impact on this building's progress through the inspection cycle? 

Gene Ferrara: In this particular one, I'll give them a little kudos. I think they were expecting a safe filing. I could see it in their minds when I broke it to them. And now with Zoom calls, I think it's real important that the engineer have photos ready to explain what he's found and why he's saying what he's saying.

'Cause if not, people just put money towards an issue and they don't wanna spend it. It's just the way it is. It's our nature. But if I show you a photo of something that's pretty damn ugly sitting 20 stories up in the air over the street line, and I tell you, you gotta get a bridge up and we gotta move it along, and there's a big project, they can't deny it in their own minds. Listen, there's there's enough work and we have 46 years in business now. It's okay if you deny that you have to do something in your own mind, but it's not gonna go away. And what I tell people is that you were under false understanding that your prior engineer told you that everything was fine.

And you wanted a safe filing. But a safe filing doesn't mean that work won't have to be done the next cycle. Or maybe he didn't really report what he should have reported as being accurate. And if he caulked a bunch of cracks in terracotta the last time around and now this cycle, we go back and that caulk is separated by an inch and a half, no, it's not gonna be safe this time around.

And it wasn't safe the last time around. You just didn't investigate it properly. So that's what I tell clients. Our average client list now, 20 to 30 years we've been on buildings. And it's, with different boards, different managing agents, but the buildings seem to stay with us and we really like that because then there's no surprises.

They know when their next job is, they know what their expenditure, and we know that a bump at this building up on the 13th floor in the corner really is nothing to worry about. It's the way the building was built, we're used to it. 

Emily Myers: So what you're saying is this condo thought that they would have a safe filing, which means that their facade is safe and deemed safe. But there were further conditions. 

Gene Ferrara: That was the ninth cycle. Go around and, and there was shock. And they look at me like, you're making this up. And I go, listen, here's the photos from your building. Look at it. She goes, that can't be our building.

I said, okay, let's take a far away shot. They're in disbelief and really, I understand where they're coming from, but if an engineer didn't do his proper job and didn't inspect the building, listen, we do this all the time. People say to us we don't have money. Could you make us SWARMP? Can you do just enough work to get us through this cycle so that the next cycle, we'll have enough time to plan for a job and we'll start it early and we'll get it outta the way?

I said absolutely. If the building will allow it, meaning that the conditions will allow it. That is our goal, if that's what you want. I don't need the thing to happen right away, but I do need you to know that this is a temporary fix and we have buildings that do this. This is called project management, because you may want to connect it or group it with something else that you have to comply with. Recently, this month in Habitat, there was an article that I had done a few months ago and it spoke just to this.

You have to manage each and every one of these exterior projects and inspections so that you can combine them to get your maximum payout, as far as the value of what you're doing. So in this particular project we have coming up now ,it's done, it waited so long, it'll take so long to do that the inspections done on the exterior on this project will count towards the 10C inspection. Okay. So they don't have to rehang the building and they'll save on this particular building, it'll be about a $75,000 savings. 

Emily Myers: So what you're saying is grouping projects might work, but delaying doesn't.

Gene Ferrara: Delaying doesn't, no. 

Emily Myers: Okay. So that's the sort of principle takeaway. Other takeaways for boards, perhaps those who might say, I don't have terracotta, lucky me. Would you say perhaps a new construction building, how comfortable can they feel as they go into the next cycle?

Gene Ferrara: When I started as a little one in the industry, I actually worked for a new construction company. It was called HRH Construction, and we built new construction back in the day, Starrett housing and all those others, and that was the boom, that was the mid eighties to late eighties boom.

And you had buildings going up quicker than I think you can count the floors in a day. And there was quality control issues. Especially with concrete, exposed concrete and so forth. So it's not only terracotta, it's exposed concrete and precast. People who have buildings with ornate precast units.

There was recently a building, I don't know if you guys remember, it actually was terracotta and it was one of the tallest buildings in New York. And it went through a major redo very shortly into its make. And you say how the hell did that happen? I'm a believer of keep it simple, stupid, because we live in a climate area in which you have freeze/thaw daily, maybe two or three times a day. You have moisture and you have to put products on the outside that are protected, that don't have an exposure or an early death, okay? As they say. And if you really look at terracotta and you look at how long it lasted in the marketplace, a hundred plus years, and you look at the condition of some buildings even now, I would never have expected terracotta to have lasted that long.

Okay. I could tell you now when you use precast and it's not the right precast or you don't waterproof it right? You could put it in in one year. Five years later, you're already looking at it cracking crazy. So it depends on the product, depends on how you put things in, it depends on the flashings behind, depends on the exposure.

But each product has its own downsides. And that's why it's important when people say I'm gonna remove the terracotta, I'm gonna replace it with precast. Okay. It's not lasting a hundred years. And then you have the other terracotta that's around it. I'm not an advocate of putting, cast stone or a material that is porous next to a material that's not porous. And if you get water on the backside, it causes problems. So you don't want to cause a bigger problem for the other products that surround it. It's a complicated mix and we all look at price. But we look at reality first. Because if you can't do it because it doesn't make real sense in the long term, then the client should be informed of that immediately.

Not to save the money, which may be a 10% savings on a project, let's say, but you know what it is. And the other thing is lead time. Terracotta could be 10 months out. 10 months, that's a crazy number. And it's getting more and more. Even with limestone now, it's becoming a little bit because the different supply houses have closed and retired and there's nobody to take over for 'em.

So it, it's complicated and that's why, like I said, do it early so you can manage the downsides that you're gonna face and you're not in a rush. 

Emily Myers: And regarding the sort of durability of materials, how important is it then to have a record of compliance through the years? 

Gene Ferrara: We had a client years ago that decided not to tell us about things they knew.

 I don't want to get into the address, but there was a litigation. We won. And I would have to say God was looking out for everybody. Nobody got hurt and so forth. But we found a building on the Upper East Side in the sixties that knew they had a problem on a side of a building.

They hired an engineer. They went through a bidding process, decided not to do the repairs. And never told the engineer afterwards of the situation 'cause you couldn't see it. And then they never told me of the situation. So we start working on the building on the other side and something falls off the top of the building and so forth.

So why do you have to have records? Because it's just like your doctor asked you when you go into a physical. Sir, have you had any records of cancer? Did you have a heart? Did your mother have diabetes? Did this one have that? You know what, we need a fighting chance. Okay? And that's to protect you.

And it's to protect the public, and it's to protect our own workers. It's very important. 

Emily Myers: Goodness. Lots of information there and lots of advice for boards. So Gene Ferrara, thank you so much. 

Gene Ferrara: Thank you as well. 

Emily Myers: That's Gene Ferrara, president at JMA Consultants.