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Turning the tides at Co-op City. (Profile of the Week: Marion Scott Real Estate).

Turning around a distressed property is not an easy task in general, and it certainly isn't a piece of cake when you have to work with affordable housing projects. But over the years Marion Scott Real Estate has earned a reputation for doing just that. In the past few years, the firm's name has become practically synonymous with Co-op City, a 15,374-unit co-op complex in the Bronx that has undergone a complete makeover since Marion Scott took over its management.

According to Herbert D. Freedman, secretary and general counsel of the firm, Co-op City is one of the greatest challenges he encountered in his career. "We were the first management company to be brought into the [development]," he explains. "It has enormous infrastructure rebuilding needs and it is so large that to do any one repair throughout the whole complex takes about a year."

And Freedman, who has been with Marion Scott Real Estate since its inception, has seen the worst of them.

"We didn't start out that way, but what's happened is that we always wind up getting these distressed properties," he says. "For example, there was a project called Lexington Gardens. Everybody said to us 'Don't touch it, it's the worst building around. Nobody has been able to fix it up." And we invested in it, we turned it around and now it's a terrific building."

According to Freedman, Marion Scott has the resources to deal with more than just infrastructure problems and cosmetic repairs. Part of Lexington Gardens' trouble had to do with the building's crime connection - drug-traffickers used it as a look out point. But over the years, the firm has learned to resolve such issues without much hardship.

"We put in special glass panels to obstruct their view," he explains. "Within a month, there was a significant improvement."

Another point that Freedman is proud of is Marion Scott's ability to stay within the budget.

"Right now, we are doing about 10 miles of underground pipes at Co-op City, which were going to cost them about $35 million," he says. "We were able to bring it down to $20 million by repositioning the program. We try to come up with a repair program that would allow us to fit the expenses into the budget."

"We even had a slogan for the ad campaign," agrees Kenneth R. Silverman, the executive general manager for Co-op City. "'Live within your means, and beyond your dreams."'

When he talks about his projects, Freedman assumes the confident tone of a man who has a no-nonsense approach to business. A real estate lawyer by training, he met Marion Scott. the firm's founder, when the latter first came to New York. Freedman became his legal counsel, then a friend, and when Scott entered a bid to serve as a management agent for Rochdale Village, Freedman was instrumental in helping him get the assignment.

"In the late 1980s, Integrated Resources Inc. (the firm that Marion worked for) ran an affordable housing operation," he recalls. "There was talk of an employee buyout and in the course of the bidding, Rochdale Village came out for a bid for a management agent. Me and Marion decided to try to get that. And it turned out that none of the bidders had management experience, except me."

That was how Marion Scott Real Estate was born in the early 1990s. Today, the firm has about 100 full-time employees and oversees some of the largest affordable housing complexes in the city. According to Freedman, the reason he and his colleagues have been so successful so far is because they try to focus on doing their job and meeting the budget, instead of joining in the political squabbles that often pull apart co-op boards and management agents.

"Nothing would happen without a board that understands and supports improvement," he explains. "Before we came in, there were stories about infighting at Co-op City. But now everyone understands that we are not about politics, but about doing a good job for the housing company. We really want to improve the buildings."

Silverman admits that taking care of the complex is no easy job, but what keeps him going is the knowledge that, once repaired, RiverBay at Co-op City will be a wonderful piece of real estate.

"Everything you do there is a challenge," he admits. "But underlying it all is beautiful real estate."

And even though managing a complex so large is an almost impossible job, Silverman insists that he believes in a hands-on approach to business.

"I am there 12 hours a day, 5-6 times a week," he says. "Our philosophy is that we don't just drive by our properties. We are there all the time."
COPYRIGHT 2001 Hagedorn Publication
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Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Misonzhink, Elaine
Publication:Real Estate Weekly
Article Type:Brief Article
Geographic Code:1USA
Date:Nov 28, 2001
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