Condominium salesman Jack Studnicky says his occupation is to "provide life styles."
He is an ex-marine who did not go to college and at 42 he is a millionaire. Nice-looking, favoring open-collared silky shirts and gold jewelry, the most remarkable thing about Studnicky is that at one point his ex-wife, his former girl friend and current wife all worked for his company, JPS Associates, a roadshow that specializes in the marketing of hard-to-sell condominiums, known in the trade as "distressed" buildings.
He tells success stories about his sales projects up and down the East Coast. (They include Alexandria House in Northern Virginia, Suburban Oaks in Pikesville, Md., Imperial House in Baltimore, and the 9400 condominium in Ocean City, Md.)
The Plaza West in Miami Beach, however, is his first experience with removing the elderly from an apartment building gone condo. Increasingly in recent years, condominium conversions have routed elderly tenants from their high-rise homes on Miami Beach, where only one out of every 500 apartments is currently available for rent.
Studnicky usually sets up temporary headquarters in the places where he works. This time, he hopes to move to Florida on a permanent basis. He and his Desiree, a former stewardess with TWA whom he met on a skiing holiday in Aspen, are hoping to buy a house here that is priced at $600,000 and comes with a swimming pool and tennis court.
Studnicky has worked out a system of concepts, or "finesses," about how to deal with irate tenant groups. In January, he shared some of the major points of his techniques at the national convention of the National Association of Home Builders in Las Vegas.
His approach is to take "problems" and turn them into procedures. He is an expert on sales psychology.
His concept of how to deal with irate tenant groups: "Empty their minds, get them to talk, identify as best you can with what they have to say, then put back in whatever you want."
He divides his sales force into two types: "openers" and "closers," also known as "openers" and "kickers."
Openers are used to bring about what is known as the "initial interface" with the tenants. The kickers are the "group of people we keep chained up in a backroom. They know how to write a deal, how to close a sale."
Kickers are terrific for the final transaction, but when it comes to the initial "30, 45 days of interfacing with the tenants, we get Suzy Creamcheese out of somewhere and we just polish her up. It's motherhood and apple pie and the American flag. It's the all-American gal -- we purposely pick non-confrontational people, people with a lot of empathy, a lot of feeling."
At Plaza West, the woman who seems to fulfill the role of a non-confrontational opener is Mary Lankford, who has curly gray hair and a gentle voice. She moved here from Falls Church, Va., and lives with her 10-year-old daughter in an apartment in the building.
This is the kind of woman Mary is: Recently a woman in a wheelchair insisted on leaving the building to visit her husband at nearby South Shore Hospital. Mary Lankford couldn't bear the idea of the woman wheeling herself through the traffic, and so escorted her there.
During the initial interviews, the tenants are asked to fill out a little survey form about the condition of the building, their feelings about the doorman, lobby, amenities.
Studnicky says there are three basic things in life: food, clothing and shelter, and any way he looks at it, he is posing a threat. "In a thousand conversations, there will be a thousand revolts," he says.
At the third or fourth meeting, the agent comes in for the kill: "Mrs. Jones, you indicated you weren't going to buy. I'm just curious, as a result of spending three or four meetings with you -- I guess we've spent three or four hours together thus far -- I'm just curious, what are your alternatives? Where are you going to go?'
"Maybe that's the first time she's been confronted with it," Studnicky said. "Maybe she hasn't dealt with where she's going. If she even has some ideas where she's going. You want to be helpful in that direction.
"For example, if she said to me, 'I want to go to the Greenhouse,' I would quickly say, 'Greenhouse, Greenhouse, Greenhouse. Say, isn't that converting? Maybe my information is wrong.
'I've seen it time after time after time, whereby people leave one building to go to another building to go to another building and they keep getting squeezed out because inevitably the building -- it's just a suggestion, I don't know where the Greenhouse is or whether it's converting or not -- but somebody said they thought the building was converting. I could be wrong.'"
If Jones remains unconvinced, Studnicky says, "Fine, if you don't want to buy, Mrs. Jones, you don't have to buy." Studnicky can afford to say this because in the "back of your mind you're going to convince her that somebody else wants to buy."
This is accomplished through the "preview advertising campaign." Reservations for units are taken from the public, and the unit that Jones could buy for $80,000 is being offered to someone outside the building for $95,000.
"All of a sudden she becomes more interested in her building because of its perceived value," the marketing specialist stated.
The preview campaign is followed up with "high impact advertising." This is called "buying traffic," and the purpose, according to Studnicky's speech in Vegas, is clear and simple: "intimidation."
"We are interested in developing a slew -- hundreds of people -- through the building that will again galvanize in her mind the perception of what a valuable piece of real estate she really has the opportunity of owning," he said.
The purpose is to "bring more people in than you know are ever going to buy.
What we do is create an atmosphere where there may be only five real buyers, but we'll try to create maybe 200 people in the building on that particular day. In other words, it appears as though there's a lot more happening than is really happening."
With the people of Plaza West, Studnicky has developed what he calls a "special platform" because he doubts that many will be in the finanacial position to buy.
"We could convert the building at a low price and possibly make it available to them, but from a profit standpoint, from a free enterprise standpoint, it wouldn't be in the best interest of the sponsor, shall we say."
Studnicky believes that the key to a successful conversion is to "get in and get out. Profits will be eroded if you spend two years in court trying to fight a well-organized tenants' group." And he says that nothing hurts sales more than tenants picketing a building; nothing is more demoralizing for the converter than having his improvements vandalized.
The tenants at Plaza West are not well organized but if they were, they have a possible opportunity to tie up the works. Although state law gives developers 180 days to notify tenants they must leave, the Miami Beach City Commission passed a law requiring 18 months notice. The law was passed in August, just before the fall elections, and because state laws always eclipse local laws, there is no chance of its standing up in court, although it could generate a lengthy legal battle.
To avoid any such ugliness, Studnicky has devised a concept of how to rid the building of tenants who cannot afford to buy. A hardship fund "in excess of a half million dollars" has been established to give the tenants an incentive to move out.
If they are out before June 5, they will automatically receive $2,000 to help with relocation expenses. By July 5, $1,500, and by Aug. 1, $1,000. "We want to put them on notice that the clock is ticking. We're still not sure how it's going to math out," he said.
"Three years from now the elderly won't be able think of living on Miami Beach. The restaurants will be sharper, the boutiques more expensive. The elderly can't live here on fixed incomes. Miami Beach will attract the more affluent person with tax advantages. It's inevitable. It's happening. I didn't cause it."
"Goodman, what have you done to your people?"
Fay Cohen, a small woman who is legendary for speaking her mind, buttonholed the former landlord at Plaza West in the corridor outside his office one day recently. Fay Cohen says she does not worry about herself. She says she already has her condo, a pre-paid plot at Lakeside Cemetery.
"Harvey, you're like a son," she said. "Don't you hear them crying in the hallways?"
"Of course I hear them crying in the hallways," says Harvey Goodman, owner of the building from 1971 to 1979. "It would be impossible not to be sensitive to that. But I didn't do anything illegal."
Harvey Goodman is 51 years old. The son of a policeman, he has a law degree and a business degree. He is tall, but despite his size and age, he seems boyish, gangly, perhaps because his shirts -- brightly printed short-sleeved synthetics -- are perpetually untucked, draping a weight problem he sometimes kids about. Harvey Goodman is a man who can afford to dress any way he likes.
Goodman lives at Bay Point, a housing development of mansions, in a house with 14 bathrooms. The asking price on Goodman's house was $900,000. He bid $425,000. He got it for $450,000. He lives there with his second wife, Linda, and their twin daughters, Farah and Fawn, 2 1/2 years old. His home faces the same Bay as Plaza West, but from the Miami side.
Goodman also owns the Kensington Club in Hialeah, Fla., Coral Rock in Homestead, Fla., and Imperial Gardens in North Miami Beach.
In an indirect way, it was his first wife who made him the success he is. It was the early 1960s; Goodman was on the payroll at IBM. His marriage was not good, but there were the three children. Goodman would not leave the marriage unless he could support the family. He went into business for himself. He was a wunderkind . Forbves and the New York Times wrote stories about this promising young man.
Today, millions of dollars later, he is regarded in the business community as a smart fellow. Jerry Gross thinks he is a mathematical genius. In 1978 Goodman won Building Managers International's Dade (County) Chapter award in "recognition of his business ability and integrity in the operation of multi-unit buildings."
Goodman purchased Plaza West from Lionel Bosem in 1971 for $6.95 million. On Nov. 9, 1979, he sold it to the Daon Corp. for $14.6 million. mIt would have done little good to convert the building himself. The $10.5 million profit from the sale is subject to a capital gains tax of only 28 percent. If he had converted, the profit would be treated as ordinary income and the tax would be 70 percent.
He hadn't planned to sell the building. He said he was surprised when the people from Daon came along -- and by the largesse of their offer.
"You're torn," Goodman says. "You know you're going to bring hardship. But I'm a businessman, here for business purposes. If you dilute your objective, it's silly. I am not a non-profit organization."
Does he feel guilty about the hardship the sale of the building has caused its elderly tenants?
"I'll tell you frankly," he replies: "I might be inclined to feel guilty if I had not gone through the degradation of rent control.
"A completely inexperienced person (in the local rent control office) was trying to tell me how to run my business. I made an application for a rental increase and I had to go to a girl who was basically a file clerk, who was paid like a file clerk, and her salary matched her ability.
"There was no way of me discussing anything logically or fairly with her. She looked at my budget for operating expenses and she said I shouldn't be making so many long-distance phone calls. I was spending too much money on paint. She wouldn't let me properly maintain my business.
"When I took title here, the vacancy rate was between 3 and 9 percent. If it's filled you start to worry, if you are a landlord. You worry about government controls. A guilding like this doesn't have value in terms of its yearly income. In 1978 it generated $1.2 million in income and I had $1.3 in operating expenses. It is valuable in terms of the profit when it is sold. iIf you can't find buyers, it has virtually zero value.
"There is a national housing problem with respect to rental units. I am anticipating a political response to that problem: rent control with severe condo restrictions. In an abundance of caution, I sold the building before that happens.
"Daon's broker came to me and named a highly inflated figure far beyond what I thought anybody would pay for the building. So I said OK. There is an hysterical buying panic going on right now."