News and Resources

Association Success Story - Lake Terrace Condominium Association

By: Stacey L. Adams, Commercial Loan Officer, COMMUNITY ADVANTAGE® of Barrington Bank & Trust Company, N.A.

The sun is shining. The sky is bright blue. Alas, a cruise on Lake Shore Drive. There is a gentle breeze off the lake today and the view? It is spectacular.

So did you imagine North Lake Shore Drive? Sure you did. But please turn your view to the South and drive along South Shore Drive for a moment. Presenting - Lake Terrace Condominium Association - a success story that has been a secret to most.

A Little History

Lake Terrace Condominium Association was built in 1957 as a 13-story high rise building. The association consists of 356 units, including 48 efficiency units, 210 one-bedroom units and 98 two-bedroom units. Metroplex Management Corporation converted the property to Condominiums in 1979.

The association offers a number of desirable amenities including a parking garage with over 280 parking spaces, hospitality room, exercise room, sauna, laundry facilities and roof terrace. The association’s management company also supervises 8 people which work at the association including a manager, assistant manager, head engineer and five maintenance/parking garage employees. As for the surrounding area, the building is located by other residential buildings and some small retail developments.

The Unit Owners and the Board of Directors – A Communicative Relationship

Terrace Views is a quarterly newsletter published by the Board of Directors. The Board has done an outstanding job relating information to the unit owners over the years through this newsletter. In fact, the newsletter includes articles from the Board President, Property Manager, Unit Owners and even includes a “Who’s Who at Lake Terrace…” article!! The unit owners also benefit from the quarterly updates on the on-going capital improvement projects at the association.

The Project

Alexander & Associates, Ltd. prepared a Reserve Study for Lake Terrace in October of 1998. This Study noted the immediate need for a new window system and estimated the cost to be over $,100,000.00. The current windows were in poor condition and in desperate need of replacement.

In January of 1999, the association selected Kellermeyer Godfryt Hart, P.C. (KGH), a structural engineering firm, to prepare an evaluation of the current exterior façade and window system. The façade was found to be in good condition with the exception of some deterioration due to the age and type of building. The window sealants were in poor condition and allowed water to penetrate the structure. Due to the age of the windows, there was no insulated glazing and all windows are single panes with putty glazing. Because of the poor condition of the window glazing, there was no protection from the wind, rain or other elements. The overall evaluation concluded that the condition of the exterior façade varied from fair to poor condition. The primary cause of the deterioration appeared to be related to the age of the building and the absence of a comprehensive long-term maintenance program. Each of the four façade areas: masonry, concrete, window repairs and sealants, required various levels of maintenance and repairs. The evaluation estimated the total repairs including window glazing to be over $,200,000.00.

In March of 1999, the association instructed KGH to collect bids for the exterior façade and window replacement project for the building. The association reviewed six bids for the project and ended up selecting Golf Construction for the work which included concrete patching, masonry tuckpointing, sealant repairs and painting.

In March of 1999, the association selected Auburn Corporation for the window replacement project. A Traco window system with dual pane windows was selected for the building. The window replacement project totaled over $,700,000.00 including the additions to the original contract.

The project progressed throughout 2001 and 2002 with both Golf Construction and Auburn Corporation working diligently to complete the projects on the specified time frames. The time frames were extremely important because of the nature of the large and intrusive window replacement project. The engineering firm remained involved in every step of the project and even reviewed each draw request submitted by the contractors to verify the charges were in accord with the work which had actually been completed at the property. The project was successfully completed at the end of 2002 and the building looks fantastic!

The Team

The Management Team was led by John Nordquist, Property Supervisor and Eva Vinson, Property Manager. John Nordquist has been managing the association for over 10 years, so he knew the association extremely well! John Nordquist and Lake Terrace Condominium Association are currently with The Habitat Company. These professionals helped guide the association through the overwhelming and time consuming process of soliciting bids for the projects and continuing on with the completion of the major capital improvement projects.

The Banking team was led by Linda J. Schiff, President of COMMUNITY ADVANTAGE® of Barrington Bank & Trust Company, N.A. Linda guided the association through the intimidating process of applying and closing an association loan. The loan was collateralized by a first assignment of the association assessments and all assets so that no unit owners were asked to personally guarantee the loan. The Board of Directors, the Property Managers and the Bank worked together to customize a loan program specifically for Lake Terrace Condominium Association. The loan program consisted of a two-year construction line of credit which would allow the association to draw on the line of credit during the two years needed to complete the projects. After the line of credit, the association would then convert the loan balance to a ten-year term loan. The loan program was implemented successfully and allowed the association to complete the capital improvement projects on schedule.

The Association’s Attorney was Herbert Fisher of the Herbert H. Fisher Law Office. Herbert was intimately involved with the capital improvement projects, as he reviewed all the contracts for the work along with all the draw requests on the line of credit. The association relied on Herbert to guide them through the legal side of completing the major capital improvements at the property.

The current Board of Directors at Lake Terrace Condominium Association are Thomas E. Taylor, President; Sharon Moreland, Vice President; Dr. John C. Hayes, Treasurer; Darryl A. Pye, Sr., Secretary; Fred Whitmore, Member; Robert Jones, Member; Dorothy S. Trenholm, Member; Edith C. Hannah, Member; Suzzanne O’Quinn, Member; Rita Jones, Emeritus. These are the people to thank for their generous contributions of time and talent to the success of Lake Terrace Condominium Association.

The Rest of the Story

In early 1999 and prior to the association completing the major window replacement project, the market values for the units were approximately $,000 for a studio unit, $,000 for a one-bedroom unit and ,000 for a two-bedroom unit.

The following is a sample of the average market values per year from the Chicago Tribune Homes Website.

1996 - $,500
1998 - $,000
1999 - $,000
2000 - $,250
2001 - $,250
2002 - $,500

As you can see, the market values rose significantly!! The association has experienced record increases of over 109% over the past nine years!

Another factor to consider is the improved financial situation of the association over the past three years. This was mainly due to the successful passing of a special assessment to repay the loan and good budgeting which led to the association keeping substantial balances in their reserve accounts. The association has prepaid over $,100,000.00 on the association loan over the past three years. The loan had a high balance of $,396,712.22 in February of 2002 and the current balance is down to almost $,000.00. In June of 2003, the association re-amortized the loan changing the

This article is dedicated to Eva Vinson, Property Manager Extraordinaire, In Memoriam.

January 2, 2006