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Continental Communications Negotiation Detailed During Board Meeting

During the April 16 open Board meeting, North Shore Towers attorney Errol Brett went into detail about the recent lawsuit and negotiation between the cooperative and Continental Communications, Inc. (CCI).

In order to distill rumors and correct misinformation, Brett gave a detailed explanation about the background of the contract with Continental Communications. When the buildings were constructed in 1973/1974, Brett said the owners entered into a long-term lease with the company. It involved CCI leasing out the roof space for antennas for a 30-year period that would end in 2017.

On January 20, 1987, North Shore Towers became a cooperative.

“At that time, the cooperative inherited that agreement,” Brett said. He also said, “At that time, the cooperative received all the leases and all the detriments, so to speak, of any leases, including the Continental lease.”

Noting that the agreement predated the sponsor, Brett told shareholders at the meeting that this was not a violation of the Cooperative and Condominium Abuse Relief Act.

Brett also explained that, because of various expenses the Board had because of the conversion, the Board became indebted to the sponsor for $3.3 million. A few months after the shareholders took control of the Board of Directors, Brett said, a maintenance increase was implemented “to try to catch up.” In addition, a $500,000 loan was taken out from a bank.

In 1988, CCI came to the Board of Directors with its Board of Standards and Appeals (BSA) application to sign. Although the company had leased the roofs, it still was required to get a permit from the city.

At that point in time, Brett explained, the Board went into negotiations with CCI in order to try to bring more money into the corporation. The agreement that was reached was that CCI would have more years added to their lease and the Towers would get $700,000 and the rent would be increased to $100,000 a year, along with there being a cost of living increase provision.

CCI returned to have its BSA application signed again in 1998. Again, the Board decided to try to see if they could get more money from the agreement and refused to sign the application, although Brett said that they were obligated to do so.

Brett said that CCI started a lawsuit against the co-op and its Board of Directors, and outside counsel said that the Board did, in fact, need to sign the application.

Once again, last year in 2008, Brett said the questions were raised over if the lease could be broken or canceled. Brett said that an outside law firm recommended that it might be possible to break the agreement.

When a new BSA application was submitted by CCI, the law firm said that the Board was obligated to sign it but should do so with certain modifications.

Shortly before a scheduled August hearing that CCI had with the BSA, the company submitted an updated engineering report about the condition on the roofs. The Towers then requested an adjournment of the hearing so that they could test the accuracy of the report, but were denied.

Brett said that the main concern during the situation was the safety, health and welfare of the residents of North Shore Towers.

Furthermore, Brett explained that the only way to stop the hearings was to withdraw the application, which was done. This meant that CCI was operating without a license and the company brought a lawsuit against the individual Board members and the co-op.

The matter ended up being settled through negotiations. Brett explained the following as being results of the settlement:

-North Shore Towers will sign the application.

-CCI will reimburse the corporation for its legal fees.

-New procedures will be put in place to ensure CCI is within the proper guidelines and that the roofs are safe.

-The amount of antennas will be reduced.

-CCI can place some TV cameras on the roof for monitoring traffic.

-No agency can put anything on top of the roof that would make it a terrorist target.

-The amount of insurance needed has been increased.

-A provision has been added that says if the Towers doesn’t sign the application in the future, and CCI successfully brings a lawsuit against the Towers, the co-op will have to pay CCI $50,000.

However, Brett did say that CCI is still subject to the BSA, that they have to have everything approved and that North Shore Towers has the right to have its own engineers on the roofs.

In concluding his presentation, Brett reassured shareholders that the property is safe, nothing underhanded was done, there were no violations and that everything was done to benefit the community.

 

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