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Wednesday, February 24, 2010

What's the Game Plan?


Above: Supported by Dan Garodnick, the Second Avenue subway line was a dumb, excessively costly idea from the start, and now its slow construction is killing businesses and neighborhoods in its wake. Some businesses will never return, either because they have been strangled into failure by the construction or removed by the MTA through eminent domain. Dan is at it again, supporting, with the Tenants Association, a tenant buy-out of Stuyvesant Town and Peter Cooper Village. But is this really in your best interest?

The effort by the Tenants Association and Councilman Dan Garodnick to have Stuyvesant Town and Peter Cooper Village tenants buy the complex and turn it into a co-op or condos is curious. If the object always has been to retain this complex as "affordable housing," how does the co-op/condo scenario fit into that plan?

One assumes, at its basic tenet, that if ST/PCV will be a co-op/condo, tenants will have the option of buying their apartments for probably a solid six-figure number, and thereafter pay monthly maintenance fees that could equal what they are paying in rent now. Who can afford this? Certainly not many seniors here, nor many other residents who are struggling as it is with financial issues, particularly in this woeful economy. And any word of "mortgage" in this current economy should make anyone pass out with anxiety. Those who opt to buy in will be burdened by rent-stabilized (and protected--we hope) tenants who will opt not to buy. Unless certain tenants are viewing a co-op situation as a potential to sell their apartments for a lucrative amount and make out like property bandits (in this economy this is a laugh), having tenants assume ownership of ST/PCV doesn't make much sense.

The bottom line is that if tenants had bought ST/PCV when the property was put on sale by MetLife, something the Tenants Association and Garodnick pushed for, tenants would have overpaid just like Tishman Speyer overpaid, and we would have been screwed (and rightfully ridiculed).

Furthermore, having Stuy Town/PCV a co-op or condo situation almost guarantees that, eventually, affordable housing will go out the window here and, ironically, with the very assistance of a group that has fought for affordable housing.

2/25/10 UPDATE:

The newest issue of Town & Village unwittingly exposes different statistical data for tenants buying Stuy Town and Peter Cooper Village. An article by Michael Alcamo presents the case for condo conversion of apartments that would be "affordable, both in the initial acquisition, and also on a continuing monthly basis." Mr. Alcamo, a Stuy Town resident and president of the mergers and acquisition firm, MC Alcamo & Company, states that a one-bedroom could cost "about $105,000," with the purchaser needing a down payment of "about $20.000." Regarding maintenance fees, the net monthly costs would be "about $1,076," which could be a monthly savings if the rent had been higher.

In a letter to the editor, John Monel presents figures that are different. He claims that tenants want a two-bedroom apartment for $300,000, implying that tenants would consider this a fantastic deal, but that these apartments, in this neighborhood, should go for 1.5 to 2 million! While Mr. Monel's background, if any, in real estate is unknown, his letter underlines the lack of clarity behind this whole idea of tenants buying this complex. Mr. Alcamo's figures seem instinctively too low for me, but, hey, he may be right.

Even if he is correct, however, a condo conversion plan would mean that while tenants would own their apartments, they would still be under the rules of the condo board, meaning that they could not do what they wanted (as in subdividing their apartment into smaller rental units) unless approved by the board.

So far, I have not heard debate on one important financial obligation that tenants would have to meet if they owned their own apartments or if they were owners in a cooperative housing corporation. Property taxes! These can be pretty hefty here in Manhattan. What would they be? And what's the protection against them rising dramatically in the coming years?

Another imminent problem is the renewal of this complex, not just the upkeep. Even Mr. Alcamo admits that the "lawn is a mess" and that "lighting needs repair." There are many more problems that will demand to be addressed as Stuy Town and Peter Cooper Village deteriorate through simple age--and many more costs involved in staving off this deterioration and in upgrading the buildings and the property into the 21st century.

As all this energy and brouhaha is occurring over tenants buying Stuy Town and Peter Cooper Village, I'm left wondering if we are taking our focus away from making damn sure that tenant protection laws are renewed and strengthened in our State Senate. That's the key to affordable housing.

49 comments:

Anonymous said...

I for one like many others are in favor of buying our apartments.
And hopefuly this will weed out students who are looking for the "dorm experience" and the transient population. As well as the "Moldy Cranks" who do nothing but complain, add no value to our neighborhood and try to make the rest of us as miserable as they are. Where do i sign!

Anonymous said...

You sign on the line that says "Idiot".

Anonymous said...

LOL "You sign on the line that says "Idiot". LOL
Do I detect "sour grapes"?
Maybe, but the only thing that you will be signing is the "contract for a moving company" to relocate your ("I should of bought when I had a chance") self!

Anonymous said...

If a two bedroom goes for $300K, well put me down for two units and you guys can call me an "idot" all you want. LOL

Anonymous said...

I could buy those 2 apartments for CASH, but still wouldn't do it.

No doorman, no concierge, no garage, and an apartment full of rent stabilized 20 something pukes and their dog living above my $700K investment ? No thanks.

Good luck and have fun !

Anonymous said...

And call John Monel "Skibummonel."

Anonymous said...

To: "Good luck and have fun !:
Thanks,
more for me!

Anonymous said...

I would also welcome a chance to buy my apartment.
There is only one reason why someone volunteers to tell you how much money they have.
And that reason is, they don’t have any!
And next comes the challenge, I'll show you my account if you show me your's. This is like Jr. High School all over again.

Anonymous said...

How much do you think you will buy your apartment for (1br ? 2br ?), and how much do you think it will cost you per month in maintenance ?

The estimates I've seen in the T&V seemed unrealistically low, and nobody is able to present a clear picture of how much it would actually cost to buy. There is 3 billion dollars of debt, and I don't expect those creditors to simply conduct a fire sale. If they can't get their price, they could hold on until the market improves. If you consider the 3 billion and simply divide by 11,250, you get a base price of 266,000. Of course bigger apartments would be more and smaller apartments less, but not by much since the majority of apartments here are 1br.

So $266,000 (+ or -) and that doesn't even begin to cover a reserve fund that you must have to begin operations.

I would want some guarantees from the sponsors that some order would be returned to the community, and BTW, if it's a non-evict plan (which it should be) the pets will stay for RS tenants, so that problem will continue.

When you create a co-op or condo from the ground-up, you have control over a lot of things. When you have a hybrid of RS and owners (as is being proposed and especially on this large scale) you have people who fall outside the rules because they are entitled to continue tenancy under the terms of their RS lease.

Most of New York City's large scale co-op/condo developments were designed that way from the start. No complications.

I'll be very interested to hear a real plan for all of this instead of the speculation that's been fueling all this discussion. I don't think it's as easy or as cheap as people think, but considering that apartments elsewhere are way more expensive, it would be an excellent opportunity for many people if it can be set up properly.

Anonymous said...

I too am highly skeptical of both the apt prices and maintence costs cited in the T&V article. They simply make no sense.

Anonymous said...

Finally a realistic discussion without someone telling us how much cash they have lol
I would hope the creditors would want to get this place off the their books. I agree that they will not give this place away, but, STUY/PCV is still in the Red.
And for the creditors, it may be a better deal to unload the "Pig wearing Lipstick, that STUY/PCV was turned into by it's former owners), then to hold on to it and continue to hemorrhage money.
I also agree that the whisper price is way too low. But I still think it will be a good deal to those that will buy their apartments. It could be a win/win.
We get rid of the transients (students,etc), and get rid of the few "negative, missrable, moldy, dried up, cranks" who have nothing better to do with their time then play poop detective. It has been shown, when people own their own apartment, they take much better care of their own and surounding property now that they have a vested interest in the place.
I think private apartment ownership, can really turn this place around.

Anonymous said...

Anybody who can afford to buy with $700,000 cash has no business living in a rent stabilized apartment.

Anonymous said...

Another liability that hasn't been mentioned - the $200m that the next owner may owe market rate tenants for previous over payment.

A conversion requires a financial backer to buy any apartments that the tenants themselves won't buy. These apartments are then rented to the current tenants.

The $200m lawsuit liability would either be paid by the tenants buying their apartments, by the financial backer, or split among the two.

I can't imagine a financial buyer coming in, buying apartments that must remain rent stabilized for at least 7 more years, and on top of that, paying the $200m liability.

This conversion idea just doesn't seem to add up.

Stuy Town Reporter said...

"Anybody who can afford to buy with $700,000 cash has no business living in a rent stabilized apartment."

Good point!

Anonymous said...

In a co op or condo a portion of the monthly maintenance - that part which represents the individual owners share of property taxes and mortgage interest. So the $1076 figure mentioned in 'Town and Village' might actually be less. There are pros and cons to everything, but it would be a plus to have ownership in a body that cares about tenants and the long term health of this community, rather than in a real estate shark.

Anonymous said...

Fortunately, STR doesn't determine eligibility for you to keep your home. I think he thinks he's living in public housing. My guess is he figures the income/asset cap should be a dollar over his stats--adjusted annually, of course. What a joke.

Hey, are you finished eating your dog yet???

Are you also advocating a change in the RS laws? I guess you also disagree with the outcome of the J-51 lawsuit.

Point of clarification: not $3 billion in debt--$5.4 billion in debt. $3 billion is just the first mortgage and, as someone pointed out, there are other liabilities. At least another $300 million in possible taxes and god knows how much in other liabilities owed to workers, contractors & others. Not saying they should be payed but they are hanging out there.

When you do the division, please remember that all of them are going to be looking for something towards their claims.

Stuy Town Reporter said...

"Hey, are you finished eating your dog yet???"

Not my dog. Though it's true I'm planning an Oval cookout when the weather gets better.

Stuy Town Reporter said...

Also, please pay attention to the post headings and content. The dog stuff is someplace else, not here. Thanks!

Anonymous said...

Sorry. I'll be more careful next time. I will rephrase: So...are you finished eating someone else's dog?

You never addressed why you feel you have the right to determine the asset and income limits for residency here.

That's on topic and a response to your post.

Stuy Town Reporter said...

"You never addressed why you feel you have the right to determine the asset and income limits for residency here."

Where did I do that?

Anonymous said...

Please pay attention to your own posts:

"Anybody who can afford to buy with $700,000 cash has no business living in a rent stabilized apartment."

Good point! -STR

Now wipe the dog off your lips and own up to your own transgressions...

Stuy Town Reporter said...

Pay attention. I wrote "good point," which is something different than mandating asset and income levels. But, now that the "point" is brought up, I would definitely look into whether someone with a spare $700,000 should be rent stabilized. More likely I'd throw his or her ass out of Stuy Town (would that be you by any chance?) and put in someone who needs and could afford affordable housing, perhaps like a returning vet, which is one of the reasons ST/PCV was built.

Anonymous said...

STR,
Come on and take a look around you. Instead of wasting your time looking for dog poop, look at the license plates of so many cars that are
parked in our loops for days on end without ever moving until the weekend. Every notice the high incidence of license plates from Pennsylvania,
Connecticut, and Massachusetts? These are cars that belong to STY/PCV residents who are in rent stabilized apartments with second homes.
And yes, it’s perfectly legal, and god bless them, I think it’s great! And no I don’t have a problem with it. So what’s my point?
My point is, You STR would be very surprised how many people DO have that kind of money or credit available to them and by no means does $700K make you rich/wealthy. When and if these apartments are ever offered to us to buy, there will be a double line of tenants with pens in hand to sign.

Stuy Town Reporter said...

We shall see about the double line. Unless "private investors" are going to be helping tenants, so that they can buy them out (at profit to the tenants) later.

Besides, I seriously doubt that tenants will be in the game to buy this place. Some big shot real estate company or consortium is going to buy this complex, not the tenants.

BTW, what's with you and dogs? Every message that you've posted in this non-dog thread (and one which I rejected) has something in it about dogs. I sense a fixation and annoyance (to the point of obsession) on anyone who wants the dog rules to be obeyed here. I guess you let your Fido do anything it wants in ST/PCV.

Anonymous said...

Those opposed to conversion because "it would not ensure long-term affordability for the future tenants" make me laugh. What they're really saying is I'm a cheap lowlife who's afraid I might have to pay a cent more than the unsustainably, artificially low rent I currently pay (a rent will soon be a thing of the past w/the sunset of RS laws).

Anonymous said...

Don't be jealous of other people's money. If one makes $175,000 a year (as Rent Stabilization allows), there's no reason they can't save it, and afford whatever is within their means. Just because you don't have a pot to piss in isn't their fault. And how would you know if that person is RS or MR anyhow ?

There's lots of rich folks living here. I walked through garage 5 one day and marveled at someones Maybach (for the uninitiated, their cheap model costs in excess of 350K). Lots of Porches parked in there too.

Stuy Town Reporter said...

"There's lots of rich folks living here. I walked through garage 5 one day and marveled at someones Maybach (for the uninitiated, their cheap model costs in excess of 350K). Lots of Porches parked in there too."

By now, I'm beginning to seriously think you are a troll.

Stuy Town Reporter said...

"What they're really saying is I'm a cheap lowlife who's afraid I might have to pay a cent more than the unsustainably, artificially low rent I currently pay (a rent will soon be a thing of the past w/the sunset of RS laws)."

No, we're saying that we'd like you to financially support our living here via a much higher rent than we lowlifes pay. Thanks, chump!

Anonymous said...

STR,

Now, that's what I like, a little honesty.

Anonymous said...

I fear that at least some of our TA leaders do not believe we should have a coop/condo plan because that might mean some tenants who buy might get a "windfall profit". I suggest anyone interested in owning their apartment show up at the TA meeting on March 13. Oh ,and by the way, anyone remember when the TA actually had an election of its Board. I think we should demand an election (which you can if you are a member of the TA).I don't want the current board of the TA determining the future of STPCV by themselves!

Anonymous said...

I wish the Tenants Association would just focus on fighting for the renewal and strengthening of the rent stabilization laws and stop trying to be property owners. No way would I be interested in buying my apartment, but I do want to continue to rent at an affordable price. If I were to buy an apartment it would be not be something as old as these and would have to be in better condition. These apartments have been neglected for decades and the maintenance would be astronomical, never mind the mortgage!

Anonymous said...

a nonevict plan gives tenants the option to buy while preserving the status of tenants who choose not to buy. I fail to see why that is harmful to any tenant

Anonymous said...

Tenants' rights will become more and more diluted as buildings convert to co-ops or condos even if there is a non-evict policy in place. Stuyvesant Town should be preserved as affordable rental housing.

Anonymous said...

"Stuyvesant Town should be preserved as affordable rental housing."
Preserved? at what cost?
The place is falling apart. It took almost three weeks before the light in our hallway was replaced. The carpets in the hallway have not been cleaned in months. If we turn the microwave on at the same time the compressor in the Fridge is on, the CB blows. Paint is chipping off the walls in the bathroom, despite being repainted over and over again. My point is, the afordability that a lot of tennants are yelling about is not do-able with trying to keep up with the repairs that need to made to this place. I don not belive that this place can be maitained with the rents the way they are.
The sale of the apartments is a must for the survival of STY/PCV!

Stuy Town Reporter said...

The very problems you mention indicate that maintenance fees for condos/co-ops will be high.

Anonymous said...

The problem is some tenants want low rents, don't care about maintenance (except when something breaks in their apt. or building!) and others want to improve property and own their homes.
Let the tenant wars begin!

Anonymous said...

Yes, no argument here. Lets say the maint fee's will NOT be cheap.
Or high. I can live with that if it means, I do not have to come home to a hallway that is half pitch balck. It's ok if i can get my own electrician in and fix the wiring that that Stuytown "upgraded" back when they put the A/C's in. If I can get a stove and fride that doed not look like there 30 yrs old. I would pay.

Anonymous said...

The obvious greed of those looking to buy and then sell at a profit is very transparent.

The current rent roll is more than adequate to support the maintenance here. We need to figure out how to get rid of the legacy of debt we were left with, not make it even more expensive to live here.

ST/PCV deserves to be preserved for the middle class.

Stuy Town Reporter said...

If we go condo or co-op, that's it for affordable housing here in this complex. At least in the future. I'm not 100% against tenants making out like bandits in some buyout deal, but I don't see the prices of these apartments high enough for that to happen. If someone gave me a million dollars for my apartment, I'd probably be crazy not to say "Goodbye to Stuy," but it's really unlikely that any price for a Stuy Town apartment will be close to that, notwithstanding some people's speculation that apartments here are worth 1 to 2 million dollars. I could see a situation in the future where rent stabilized tenants would be offered about 100K-150K to give up their apartments, but that's about it. And that would seem to me to be too low for many here who have set up roots with family and a livelihood in Manhattan.

Anonymous said...

Your living a pipe dream if you think Stuy/pcv can ever get out from under this mess. Ownership will work. I do not think most people are interested in flipping their apartment. I think most people would like a nice place to live, and I think they are willing to pay a bit more for it. And, there can always be a clause that anyone who buys their apartment must wait five years before they can sell it. Thare are ways to prevent flipping. Being allowed to buy our apartments will rid us of the transients, and the terminally miserable, the hemorrhoids who add nothing and give back nothing to our neighborhood. Condos/co-ops, the way to go!

Anonymous said...

"The obvious greed of those looking to buy and then sell at a profit is very transparent." The only thing obvious is that you will nt be able to afford your apartment. I belive most people here would like a nice place to live, and I bet if they were offered ownership and the chance to turn this place around. They would take it. it does not make them greedy.

Anonymous said...

So instead you would rather have Lefrak buy property? Lefrak and his buddies are donating millions to prevent RS from being extended past June 2011 or at the least to make RS even weaker than it is now. Between rent increases and MCIs most apasrtments are not affordable housing today and they will only get more expensive and if RS dies or when J51 benefits expire in either 2017 or 2020 then all bets are off as to rents and who will reap the benefits?
Lefrak!So you would prefer a temporary maintenance of " affordable housing" with all upside going to Lefrak then to allowing any tenant the right to own his home and get any upside on his apartment and with greater assurancesfor renters than Lefrak would ever give us???
I fail to see the logic

Stuy Town Reporter said...

"And, there can always be a clause that anyone who buys their apartment must wait five years before they can sell it."

There you go. Already telling me what I can do or not do with my apartment--if I buy it.

There's going to be a lot of quarreling among owners/tenants coming up. Blood will be spilled.

Anonymous said...

There's a Wilbur Ross/Lefrak shill on this board.

Anonymous said...

Already those who could afford to buy their apartment are making disparaging remarks about those who don't have that kind of money and want to continue to rent. I guess there's enough of the spirit of TS and Blackrock to go round.

Anonymous said...

Be prepared for blood being spilled at the March 13 meeting, particularly if a rumor going around that the TA board want. to preserve some of the complex for affordable housing and low income housing in perpetuity is true,
Remember the Board of the TA hasn't stood for reelection in years, thus they are not legit,That is what a lawyer friend of mine told me

Anonymous said...

....WHERE ARE YOU???????????????????
don't leave now!

IT'S GETTING EXCITING AROUND HERE

Stuy Town Reporter said...

Hmm, seems we are in a holding pattern.

Anonymous said...

Right of First refusal- that is what should have been in place before Tishman came in, it was a law written for Mitchell Lama, but REBNY killed that, and duh Bloomin' mayuh was no help. Eminent Domain done right. We should have that. That would keep costs down for buy-in. This land was originally given by condemnation for nuthing.
I don't like people who complain about the 'old poop complaining cranks'. this was built for them, honor them, and their respect for the original no dog & dont ruin the grass rules. maybe some modification was needed, but we ended up in alot of poop!
RE Purchase -v-rental-well we should be committed to preserving affordable housing stock, especially for our municipal employees, and families just entering the middle class. have to figure how to make the wrongly destabilized not sue the tenants if we were to be new owners.Tishman. met life.....should be responsible for that...oh all the 'ifs'in life.(Horrible commercial)
There should be a time commitment priority, that would avoid keeping thew NYUers. People who have been in Stuy Town/PC for a good x ## of years. And no vacancy decontrol. I also say for rental-priority to city workers, or any civil servent...sorry all, but people work at not high salary, to have a pension, and do the public good, let them have a priority to come in, when there are newbies. And no hit & run buy/sales. there needs to be a commitment to the community.
Eminent Domain. Then sell to the tenants. and have rentals...To NYC residents first..meybe some immediate family. Anti displacement. Community building- good urban planning- precidents- keep the family support network, i want to have my kids afford to be near me. I am no math maestro, but there must be tricks in the trade, and new ones to invent. with all of your brains. Do it right & righteously. Lower buy-ins, lower rent. lame duck mayor. something gotta give- EMINENT DOMAIN-bye bye profiteers, good riddens, and don't leave us holding the bag. Original residents should get the best deal- lowest scale buy-in- not many left-give em & their families the break. Honor our roots. Honor the principals- that's my 10 cents-no one gets to buy & run, oor immediately sublet...hefty penalty fee. get the gold dust out of your eyes ye with visions of sugarplums. Dont spit in the face of those who may stick their necks out in public office for our good. Its about a home