The DNAinfo archives brought to you by WNYC.
Read the press release here.

Penn South Management Reverses Claims That Hoarders Caused Cost Overruns

By Mathew Katz | November 1, 2013 4:11pm
 Penn South had to replace all of its heating and cooling pipes.
Penn South had to replace all of its heating and cooling pipes.
View Full Caption
Penn South

CHELSEA — The management of Penn South has reversed its earlier explanation for what caused a $40 million cost overrun and a year-long delay on a huge renovation to its heating systems — which they initially blamed on hoarding.

In a memo issued to Penn South residents on Thursday, general manager Brendan Keany backtracked on his earlier comments blaming the hoarding — instead pinning the expense on mechanical costs, staffing increases, and asbestos abatement.

"At no time did we indicate that hoarders were the primary cause or even a significant cause for the $40 million increase in costs," Keany wrote in the memo, obtained by DNAinfo New York.

But just last week, Keany told DNAinfo New York that the central reason that their roughly $100 million budget for replacing the co-op's HVAC system ballooned to $140 million was because hoarders had filled their apartments floor-to-ceiling with belongings.

"We had a much bigger problem than we could ever have imagined, specifically because of the hoarders," Keany said in a meeting with DNAinfo last week.

Keany said the complex's senior center paid the national hoarding expert Catherine Ayers to come in and speak to staff about hoarding. They would not say how much she was paid.

Penn South also and hired a social worker dedicated to working with hoarders, he said. He also would not say how much the social worker was paid.

He said the 2,820 unit condo hired 31 new staffers at the additional cost of $8 million to help elderly residents who could not move their own belongings to give contractors access to the heating pipes that needed replacing.

Keany said management had begun telling hoarders they could face eviction in the hopes of having them clean up their acts.

According tot he city's Department of the Housing Preservation and Development, the complex initiated 26 such "nuisance cases" against residents because of hoarding. 

Management's story was met skeptically by Penn South residents, who blamed the extra costs on contractor mismanagement.

Critics believe the complex accepted one of the least expensive bids on its contract for work on the first three buildings — RC Dolner — and then had to replace them with new contractors who have to re-do their shoddy work. 

According to Keany, RC Dolner's work will be replaced at the firm's expense. But he said F.W. Sims, the new contractor they hired to do work on the remaining 12 buildings, will charge an average about $6.5 million per building — up from RC Dolner's $4.5 million per building estimate, for a cost increas of approximately $24 million.

Keany did not mention the contractor overruns in the Oct. 31 memo, though it was brought up in the complex's annual report.

"The contractor had no experience with HVAC," said Bruce Goldman, a resident who is currently being accused of hoarding by management, and is fighting eviction proceedings. "They chose him because he was the lowest bidder. That's where they lost all the money — they were totally inept."

Keany and RC Dolner did not immediately respond to requests for comment.