The Towers of Key Biscayne, Inc.

Transcription

1 Meeting called to order at 7:05 PM I. ROLL CALL Members Present: The Towers of Key Biscayne, Inc. The Auditorium 1121 Crandon Boulevard Key Biscayne, FL Board of Directors Informational Meeting July 24, 2014 Mr. Martin Pinilla Ms. Alison Owen Mr. Mario Lopez Ms. Judy Rosenblum Mr. Perez Mr. Armando Marchi Ms. Clara Bacallao Also Present: Mr. Joe Maura President Vice-President Treasurer Secretary Asst. Vice-President Asst. Treasurer Asst. Secretary General Manager II. DETERMINATION OF A QUORUM Once a quorum was established the meeting proceeded. III. WINDOW PROJECT INFORMATION AND DETAILS Mr. Pinilla provided information on the windows project, as to the motivation, justification, investigation, methodology, funding, TKB maintenance fee analysis, and recent sales analysis. Susan Sanchez-Armengol, Combined Underwriters of Miami, Inc., presented an analysis of current insurance benefits and prospective insurance rates with Citizens or Excess and Surplus Lines Carriers. She answered questions from residents. Lisa Lerner and Jonathan Mofsky, of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, presented information to clarify ownership of the windows, as well as maintenance and repair of common area elements (the unit windows), as per the Association s condominium documents. They also explained that the Board has researched the procedures for assessment on windows, if other

2 options would be available to change ownership of the windows, and if this change would be beneficial for owners. Ms. Lerner answered questions from residents. IV. OPEN FORUM V. ADJOURNMENT Ms. Owen moved to adjourn at 9:56 PM. Mr. Pinilla second the motion. - All members unanimously agreed MINUTES TYPED BY MARIA S. PORCEL MINUTES APPROVED BY MS. JUDY ROSENBLUM, SECRETARY.

3 INFORMATIONAL MEETING WINDOWS REPLACEMENT PROJECT JULY 24 TH, :00 PM TKB AUDITORIUM

4 ITEMS FOR DISCUSSION What prompted the Windows Project? / Motivation Is it necessary? / Justification How do we accomplish it? / Investigation How do we pay for it? / Methodology How do we fund it? / Funding Is the charging method fair? / TKB maintenance fee analysis Is it worth doing it? / Recent sales analysis

5 WINDOWS PROJECT WHAT PROMPTED THE WINDOWS PROJECT? / MOTIVATION

6 MOTIVATION (1) Visible water intrusion in units in the past 18 months. A1208 A901 A501 B1207 B1206 B1108 B1008 Units Affected & Repaired B1007 C905 B906 C501 B506 D1208 B406 D1202 C1206 D1101 C1205 D908 C1002 D808 D407 D401 D107 E1003 E702 E507 E203 Damage inside units Each incident reported negatively affects future insurance rates

7 MOTIVATION (2) Preservation of Beneficial Insurance Coverage and Rates Current Insurance rates Beneficial Insurance Coverage & Rates $ 993,614 Prospective Insurance rates with Citizens Approximate 25% premium increase with inferior coverage $ 1,242,018 + possibility of 45% additional increase in premium almost at any future time $ 1,800,926

8 MOTIVATION (3) TKB Windows Facts Average life expectancy of a window is approximately 30 years TKB windows are over 42 / 43 years old Windows of other buildings of similar age in Key Biscayne have been replaced, such as Island House (10 years ago) Commodore Club, South (common areas)

9 WINDOWS PROJECT IS IT NECESSARY? / JUSTIFICATION

10 IS IT NECESSARY? JUSTIFICATION Reports on window conditions by two independent Engineering Firms: B. P. Taurinski Structural Engineers. TRC Worldwide Engineering, Inc.

11 IS IT NECESSARY? JUSTIFICATION REPORTS SUMMARY & RECOMMENDATION SUMMARY: Observations confirmed that extensive corrosion damage to window units, framing and connections has occurred primarily due to exposure to weather conditions found at this oceanfront location. Wind driven rain coming through gaps between mullions was also noted. Deterioration of window frames has also caused audible wind noise to penetrate the interior of the units observed. In addition, window attachments and accessories were tarnished and oxidized impeding the proper functionality of the windows. Window tracks no longer function smoothly making opening and closing difficult. Safety issues were found due to the lack of operation in some windows constituting a hazard to the tenants. Evidence of water penetration into the interior of the apartments was found. Lastly, windows were not categorized impact windows and do not have approved Miami-Dade NOA (Notice of Acceptance). In virtually 100% of the 25 units checked there was a notable degree of deterioration and damage, based on this sample size and the evidence gathered it would not be practical to test 100% of the windows in order to develop an opinion. RECOMMENDATIONS: Based on our observation of the current conditions of windows at the Towers of Key Biscayne it would be most economical to replace the existing window units with conforming systems rather than try to repair what is in place. Water intrusion into the building structure will continue to cause damage and may compromise the building envelope if not corrected. This should be considered at the time of window replacement. Concrete inspection and restoration of the openings after removal of the existing windows is recommended. Attachments for existing hurricane shutters are causing water intrusion into the building envelope. At minimum, shutters should be removed and the holes sealed and patched prior to reattachment. Installing new Impact window systems would eliminate the need for shutters and reduce the potential for water intrusion.

12 WINDOWS PROJECT - JUSTIFICATION Results of engineering firms reports Fiduciary duty of Board members Safety of Building Maintain value of property

13 WINDOWS PROJECT IS IT NECESSARY?

14 WINDOWS PROJECT - HOW DO WE ACCOMPLISH IT? / INVESTIGATION

15 HOW DO WE ACCOMPLISH IT? INVESTIGATION / CONSULTANT SELECTION Al-Farooq Corporation (Selected) Miami Curtain Wall Consultants Corp TRC Worldwide Engineering Inc Peer Review of Window Specs was recently commissioned from the engineering firm of Pistorino & Alam Consulting Engineers

16 INVESTIGATION/ PROSPECTIVE PROVIDER SELECTION Florida Lemark / Wind Ready National Concrete Preservation Inc / RC Home Showcase National Concrete Preservation Inc / Windoor United Glass Systems Corp / Sun Metals Windows Performance Glass / IWC - Innovative Window Concepts ES Windows TISW / IWC - Innovative Window Concepts Sun Air Windows of Florida

17 PROSPECTIVE COST OF PROJECT *Note: Values provided are approximates and not final figures! Window Replacement Project $8,024, Including: Window Replacement Insurance Bond Purchase of paint for exterior walls Permits (1.8% of project cost) + $115 per unit Attorneys' Fees Insurance (for engineers Professional Liability) Engineer Consultant Fees CONTINGENCY $790, Including: Contingency for Window Project Contingency for delinquent units that fail to pay assessment (4% of Special Assessments) Estimate Total Cost: $8,815,010.00

18 WINDOWS PROJECT HOW DO WE PAY FOR IT? / METHODOLOGY

19 HOW DO WE PAY FOR IT? METHODOLOGY (1) No money in reserves for windows replacement Special Assessment

20 METHODOLOGY (2) TKB DOCUMENTS THAT DECLARE WINDOWS AS PART OF THE COMMON ELEMENT. Declaration of Condominium Page 5, Page 9, 17. Responsibility for the maintenance and repair of the units shall be that of the Unit Owner thereof. The maintenance of the Common Elements and Limited Common Elements shall be the responsibility of the Association. Notwithstanding anything to the contrary contained herein, maintenance and repairs of windows and sliding doors, the repairs and maintenance of that portion of exterior walls of the building included within the terraces or balconies shall be the responsibility of the Association, except the washing of the interior and exterior of windows and sliding glass doors shall be the responsibility of the respective Unit Owner. 18. Said Common Expenses shall also include the cost of maintaining and operating the Common Elements and the Limited Common Elements and the operating expenses of the Association in connection with the operation of the condominium, Exterior windows and frames, exterior glass-sliding sliding doors and frames and casings are Common Elements.

21 METHODOLOGY (3) TKB DOCUMENTS THAT INDICATE METHOD OF CHARGING COST ACCORDING TO UNIT AREA (SQ FT = PERCENTAGE OWNERSHIP). AMENDMENT TO THAT CERTAIN DECLARATION OF CONDOMINIUM OF THE TOWERS OF KEY BISCAYNE, AS RECORDED AMONG THE PUBLIC RECORDS OF DADE COUNTY, FLORIDA, ON AUGUST 16, 1972, IN OFFICIAL RECORDS BOOK 7850, COMMENCING AT PAGE 375. Paragraph 6. The "PERCENTAGE AND MANNER OF SHARING COMMON EXPENSES AND OWNING COMMON SURPLUS and THE UNDIVIDED SHARES, STATED AS PERCENTAGES IN THE COMMON ELEMENTS which are appurtenant to all of the Units of The Towers of Key Biscayne Condominium (Phase 1 and Phase 2) shall be set forth in Exhibit "F", sheets I through 12, inclusive, of the ORIGINAL DECLARATION, said Exhibit "F" being incorporated herein by reference.

22 METHODOLOGY (4) TKB DOCUMENTS INDICATING MANNER & PERCENTAGE VOTE REQUIRED TO MAKE CHANGES TO THE DOCUMENTS. Page 4, Declaration of Condominium 11.2 An amendment to this Declaration made by the Sponsor shall be evidenced by a Certificate executed by the Sponsor with the formalities of a deed and shall include the recording data identifying this Declaration. An amendment made to this Declaration by Unit Owners shall be evidenced by a Certificate executed with the formalities 0f a deed, which Certificate need not be executed by the Unit Owners, but need only be executed by the President or any Vice President of the Association attested by the Secretary or any Assistant Secretary of the Association, and shall be executed by them with the formalities of a deed and shall include the recording data identifying the Declaration, and an Affidavit executed by the President or any Vice President of the Association shall be attached to the certificate certifying that sixty-six and two-thirds (66 2/3%) per cent or more of the Unit Owners entitled to vote Voted in favor of the amendment provided, however, that no such amendment shall adversely affect the lien or priority of any previously recorded institutional mortgage as it affects 11 condominium unit: 66 2/3% = 359 units owner votes in favor.

23 PROSPECTIVE ASSESSMENT / APPROXIMATE COST PER UNIT TYPE Unit Models Sorrento Estoril % ownership Approximate cost of prospective Windows Special Assessment per unit type ( $8,815,010 ) $ 23,448 $ 17,710 Sandpiper Flamingo Biscayo Antigua $ 21,844 $ 16,194 $ 14,307 $ 11,204

24 WINDOWS PROJECT HOW DO WE FUND IT? / FUNDING

25 HOW TO FUND IT? / BANKS CONSIDERED City National Bank BB&T Bank United Chase Total Bank Banco Popular (Popular Association Banking)

26 HOW TO FUND IT? - BANK PROGRAM SELECTED City National Bank Offer 4.25% interest Beneficial Conditions

27 WINDOWS PROJECT IS THE CHARGING METHOD FAIR? / TKB MAINTENANCE FEE ANALYSIS

28 IS IT FAIR? TKB UNITS COMPOSITION AND % OF OWNERSHIP Unit Models Sorrento Estoril Sandpiper Flamingo Biscayo Antigua # of Units Approximate unit area (Square Feet) Units with 6 windows or more % ownership Units with 3 windows or less

29 IS IT FAIR? - TKB MAINTENANCE FEES ANALYSIS (1) Unit Models Approximate unit Area (sqft) / % Ownership Approximate Quarterly Maintenance Fee Approximate Annual Maintenance Fee Sorrento 2534 / $ 4, $ 17, Estoril 1914 / $ 3, $ 13, Sandpiper 2361 / $ 4, $ 16, Flamingo 1750 / $ 3, $ 12, Biscayo 1546 / $ 2, $ 10, Antigua 1211 / $ 2, $ 8,371.60

30 IS IT FAIR? - TKB MAINTENANCE FEES ANALYSIS (2) Unit Models Annual Maintenance Fee (per unit type) # of Units Approximate Total Annual Maintenance Fee (per unit type) Sorrento $ 17, $ 192, Estoril $ 13, $ 3,559, Sandpiper $ 16, $ 184, Flamingo $ 12, $ 133, Biscayo $ 10, $ 2,096, Antigua $ 8, $ 368,350.40

31 IS IT FAIR? - TKB MAINTENANCE FEES ANALYSIS (3) Units with 3 windows or less Combined maintenance fee total Sandpiper Flamingo Biscayo Antigua $ 2,783,178 Sorrento Units with 6 windows or more Combined maintenance fee total Estoril $ 3,752,284

32 WINDOW PROJECT IS THE CHARGING METHOD FAIR?

33 WINDOW PROJECT IS IT WORTH DOING IT? / RECENT SALES ANALYSIS

34 IS IT WORTH DOING IT? TKB UNIT SOLD PRICES IN THE PAST 12 MONTHS (1) Estoril E501 F501 A807 B107 C1102 A1102 F1101 B1002 A508 E707 E702 Sorrento F1202 Unit Sale Price $870,000 $926,000 $750,000 $1,699,000 $985,000 $1,170,000 $980,000 $1,155,000 $1,540,000 $1,070,000 $935,000 $1,200,000 Average Sale Price $1,098,181 $1,200,000 Information from Miami-Dade MLS

35 IS IT WORTH DOING IT? TKB UNIT SOLD PRICES IN THE PAST 12 MONTHS (2) Unit Sale Price Average Sale Price Unit Sale Price Average Sale Price Biscayo Antigua A406 E1204 $655,000 $667,000 F1104 C904 $550,000 $480,000 $515,000 D504 $680,000 Flamingo D505 $561,750 F1103 $675,000 $675,000 D306 E903 $665,000 $660,000 $676,000 Sandpiper C405 $1,775,000 $1,775,000 E506 $695,000 B1105 $485,700 B1005 $850,000 A604 $840,000 Information from Miami-Dade MLS

36 IS IT WORTH DOING IT? TKB UNIT AVERAGE SOLD PRICES vs. APPROXIMATE ASSESSMENT PER UNIT TYPE Unit Type Average Sold Price (in US dollars) Approximate Assessment (in US dollars) Percentage of Average Sold Price (%) Sorrento $1,200,000 $ 23, % Estoril $1,098,181 $ 17, % Sandpiper $1,775,000 $ 21, % Flamingo $675,000 $ 16, % Biscayo $676,000 $ 14, % Antigua $515,000 $ 11, %

37 WINDOW PROJECT IS IT WORTH DOING IT?

38 WINDOW PROJECT Questions & Answers Open Forum

39 WINDOW PROJECT THE CONDOMINIUM ACT CHAPTER 718 FLORIDA STATUES FOR 2013 SECTION A-B-C (5) Each board of administration shall adopt hurricane shutter specifications for each building within each condominium operated by the association which shall include color, style, and other factors deemed relevant by the board. All specifications adopted by the board must comply with the applicable building code. (a) The board may, subject to s and the approval of a majority of voting interests of the condominium, install hurricane shutters, impact glass, code-compliant windows or doors, or other types of code-compliant hurricane protection that comply with or exceed the applicable building code. However, a vote of the owners is not required if the maintenance, repair, and replacement of hurricane shutters, impact glass, code-compliant windows or doors, or other types of code-compliant hurricane protection are the responsibility of the association pursuant to the declaration of condominium. If hurricane protection or laminated glass or window film architecturally designed to function as hurricane protection that complies with or exceeds the current applicable building code has been previously installed, the board may not install hurricane shutters, impact glass, code-compliant windows or doors, or other types of code-compliant hurricane protection except upon approval by a majority vote of the voting interests. (b) The association is responsible for the maintenance, repair, and replacement of the hurricane shutters, impact glass, code-compliant windows or doors, or other types of code-compliant hurricane protection authorized by this subsection if such property is the responsibility of the association pursuant to the declaration of condominium. If the hurricane shutters, impact glass, code-compliant windows or doors, or other types of code-compliant hurricane protection are the responsibility of the unit owners pursuant to the declaration of condominium, the maintenance, repair, and replacement of such items are the responsibility of the unit owner. (c) The board may operate shutters, impact glass, code-compliant windows or doors, or other types of codecompliant hurricane protection installed pursuant to this subsection without permission of the unit owners only if such operation is necessary to preserve and protect the condominium property and association property. The installation, replacement, operation, repair, and maintenance of such shutters, impact glass, code-compliant windows or doors, or other types of code-compliant hurricane protection in accordance with the procedures set forth in this paragraph are not a material alteration to the common elements or association property within the meaning of this section.