The difficult economic environment which has pervasively affected our entire country, has been felt even more acutely by New York City.  With the soaring job losses produced by both failed Wall Street firms and those with contracting operations combined with the precipitous downturn in business and leisure travel, the tax base for the production of New York City revenue has substantially diminished.  Consequently, the one very substantial negative difference between the Association budgets of 2008 and 2009 and that of 2010 has been threefold – first, the July 2008 imposition of an increase in New York City real estate taxes, second, another increase which took effect in January 2009, and third, a further real estate tax increase to be effected July 2009.  New York Urban Ownership Management, LLC (the “Management Company”), on behalf of the Association, in conjunction with legal counsel, are disputing the assessments which, among other factors, have led to these increases.  Unfortunately, the Association must first pay these taxes before disputing them.  I have attached as well, some recent articles which highlight the taxing issues faced by New York City property owners.  It would appear that the Bloomberg administration is desperate to find revenues to address the City’s budgetary shortfalls and is turning, in part, to real estate tax hikes to generate badly needed funds.  The only responsible position which the Management Company can maintain with respect to these tax hikes is to (1) reduce the Association’s overall costs to cushion the impact of the real estate tax increases, (2) unfortunately, collect those tax increases from the Owners, and (3) mount a vigorous opposition to the imposition of such tax increases with the New York City Department of Finance.            Notwithstanding the City’s economic downturn, the Association, through the Management Company, has taken the opportunity to renegotiate prices for the goods and services which the Association purchases from outside vendors.  Complicating this positive action is the Association’s Union contract which provides for a 3.5% annual wage increase which is included in the 2010 budget.  In spite of such a predictable increase in Union labor and benefit costs, the Association’s Management Company has frozen non-union wages, reduced, to an absolute minimum, the use of overtime for all employees and successfully implemented a “more for less” approach with the Association’s vendors to offset it.  As such, without diminishing the level of service to Owners or Owner ambience, the 2010 Association budget will only reflect an approximate 2% increase in maintenance fees over the Association’s 2009 budgeted maintenance fees.            The Management Company has initiated infrastructure and replacement projects in 2009 as well as completed a number of similar activities in 2008, which demonstrate the Association’s constant focus on maintaining the Association’s property at the highest levels.  Although New York City hotel occupancies may be down due to a lack of business, the Association’s occupancy for 2008 was at 96%.  We fully expect that the balance of 2009 and 2010 will reflect the same level of demand from all Owners and it is the Management Company’s intention, with the 2010 budget in place, to meet, and hopefully exceed, our Owners’ hospitality expectations during their stays at The Manhattan Club. Joshua A. Wirshba General Manager The Manhattan Club 200 West 56th Street New York NY 10019