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Thursday, September 30, 2010

The Circling Sharks



With the sale of Stuyvesant Town and Peter Cooper Village coming up next week, there are a few things to keep in mind:

- The companies that will be bidding on this property want to make a very nice, sustained long-term profit. A very nice one, indeed. They are looking to the future and to the massive amount of real estate space that comprises ST/PCV.

- They are not interested in the tenants here. The tenants are, in fact, an annoyance and a hindrance to their plans for this complex.

- They still have to deal with tenants and the politicians that represent the tenants. So they will white lie and black lie.

- Because of the way matters currently stand, they will be forced to make accommodations with both tenants and politicians.

- There should be suspicion about their eagerness to go along with the idea of a condo or co-op conversion for ST/PCV.

- Whatever company or conglomerate of companies wins this complex, they will have secret plans that we will not see, but which may be revealed in the long term, once it's too late.

- This company or conglomerate will offer up to tenants the same smooth talk, b.s. nonsense that Tishman Speyer offered up when they took over ST/PCV. Check Rob Speyer's statement on the right side of this blog to remind yourself. Try not to laugh...or cry...when you read it. [May the spittle running down Rob Speyer's lengthy chin increase in volume and size year after year for the destruction he initiated upon ST/PCV.]

- One wonders how all this activity, on the part of the future owner(s) and the tenants association that's seeking a condo/co-op plan, is diverting, if not destroying, the cause of affordable housing and rent stabilization in this complex and the toughening of tenant rights in the future. What happens here, in Stuyvesant Town and Peter Cooper Village, may be crucial to the history of middle class housing in Manhattan. A wrong step, or several wrong steps, means affordable housing in Manhattan will be gone forever.

20 comments:

Anonymous said...

Great post STR. They smell blood in the waters and are readying themselves for a feeding frenzy on Monday.

Anonymous said...

I couldn't agree more with your comments about the tenants association. They have failed miserably in protecting affordable housing which they claim is their ultimate goal. The only possible way to save affordable housing is for Stuyvesant Town to remain as a rental property.

The TA is participating with these predators in continuing the Speyers goal of ultimately destroying Stuy Town and making it more luxury housing!

I believe that the board members of the TA should be required to publicly announce their intentions regarding buying, I bet all of the board members and Dan Garodnick are planning to buy. All the TA has done is merely help accomplish the Speyers plans at the tenants expense.

We need to be willing to watch their moves carefully and be prepared to file lawsuits against them and Garodnick if they screw tenants, as I am sure they will.

If you have any doubts about whether Co-op or Condo boards and rent stabilized tenants can co-exist look no further than the T&V and all the articles regarding the fights and back and forth lawsuits at Midtown East.

Anonymous said...

I'm an original tenant and I couldn't agree with you more. We are being sold out by the TA and the politicians and I have no expectation of being treated well by the new owners.

Anonymous said...

Rent Stabilization will sunset before long. Oh, not in 2011, not likely, but the handwriting is on the wall, and it's in a VERY large hand.

NYC is the last rent regulation holdout, and it's just a matter of time before the pols and the real estate industry strike a deal. And there will be so few regulated tenants left (vacancy decontrol will not be reversed), that no one will notice their tiny cry.

An affordable, limited equity co-op means that we'll be able to stay here when that day comes. The purchase price should be low enough that most, if not all, can afford it. And by limiting the resale price, it insures that it will stay affordable for future generations. There will be a waiting list again.

So forget all the paranoid conspiracy theories regarding the TA. Believe me, they're the ONLY ones on our side in this mess. It oughta be obvious.

Stuy Town Reporter said...

I doubt the purchase price will be low. At least not low enough for people to afford it without a heavy mortgage. That's what the powers that be are "banking" on--heavy mortgage for the individual, foreclosure, and the tenant is out, after giving an initial deposit of at least 10% of the asking price.

Anonymous said...

Rent Stabilization will survive if enough people fight for it. TenantPac and Tenants & Neighbors are not giving up and throwing in the towel. The TA used to care, but now they are just drooling at the thought of becoming owners and I think they are going to regret it in the long run.

Anonymous said...

"And by limiting the resale price, it insures that it will stay affordable for future generations."

That statement is so ridiculous that one doesn't know where to begin to rip it apart. However, it is only the 2nd most ridiculous thing you said. The first is "So forget all the paranoid conspiracy theories regarding the TA. Believe me, they're the ONLY ones on our side in this mess. It oughta be obvious."
It oughta be obvious but it ISN'T.

The TA as it exists today has abandoned the tenants of Stuyvesant Town and Peter Cooper Village. The only good thing about the TA's stand is that if they win and there is a conversion to co-op or condo the TA will either have to fold or totally restructure to reflect the new demographics of ST/PCV.
For example, lets say ST/PCV goes co-op and 20% of tenants buy. Then the board at the TA would need to conform to be 20% owners and 80% renters. Since as someone suggested, if all the Board members buy then 80% of them would need to be replaced with new board members who are renters. Only then would the board reflect the tenants make up.
In fact I wonder if any board members who buy can stay at all because they will no longer be tenants. Therefore, after all is said and done here the existing TA would need to be abolished and a completely new Tenants Association would need to be formed. Otherwise, you would have the board of the Tenants Association being fully staffed by owners. This would be like having the current Board staffed by the Speyers and TS employees today, it is a clear conflict of interest.

Anonymous said...

Here is the problem with those who long to keep STPCV as a rental
STPCV was recently appraised at $1.9 billion , while the senior debt is currently about $3.7 billion. For STPCV to remain a rental someone is going to have to pay the senior debt the difference ($1.8 billion). Any of you have a spare $1.8 billion?
The only way to preserve STPCV as at least a partial rental is to sell coops to tenants willing and able to buy. Guterman's plan makes a fair amount of sense. Sell coops to tenants at about $300/sq ft (well below market in Manhattan) , sell vacant apartments for market and allow any tenant who can't or doesn't want to buy his/her apartment to remain as a RS tenant.
This plans allows tenants the option to buy their apartment at an affordable rate (by Manhattan standards) and gets funds to the senior lenders( who after Monday will be the new owners of STPCV )sooner than they would have been paid under the terms of their loan. The plan assumes that in exchange for getting funds sooner from the sale of coops the senior lenders will agree to certain concessions with respect to their loan , including reducing it from about $3.7 billion to no more than $3 billion
Which would you prefer, this plan where tenants would become owners or a new owner who will turn STPCV into market rate apartments after 2017 when the J51 benefits expire or sooner if rent stabilization is not extended beyond 6/2011. (don't think an extension is a guarantee because the Republicans have a very good chance of regaining control of the State Senate next month and even if they don't , the landlord groups have given major donations to key Dem State Senators (not just Espada who won't be returning to Albany) who helped to ensure that no housing bill was passed by the State Senate during the past 2 years when the Dems controlled the State Senate?I and many other tenants prefer the coop plan .
And I ask those advocating for rentals only-who is going to pay the new owners (the senior lenders) the $1.8 billion difference between the amount of the loan and the current FMV of STPCV as a rental ($1.9 billion)?
And PLEASE don't answer "the government". No government bailout should or will be made on behalf of STPCV.

Stuy Town Reporter said...

And I ask those advocating for rentals only-who is going to pay the new owners (the senior lenders) the $1.8 billion difference between the amount of the loan and the current FMV of STPCV as a rental ($1.9 billion)?

Why should tenants have to pay for the gross mistake of Tishman Speyer and their investors to gobble up this place at over 5 billion?

Anonymous said...

I agree with STR. Who cares if any of these predators get their money back? Why is that even a consideration?

The tenants association has agreed to let these predators get their money back so they will be given a say in the future, but it's all BS. The TA is self serving and needs to be removed from these proceedings.

Anonymous said...

Reply to STR
STR-I know you are smarter than that.
This is America. A deal was made between Tishman Speyer and the lenders. It failed. The senior lenders on Monday will be foreclosing on the property on Monday, thereby eliminating the $2.5 billion in mezz debt and equity invested in the deal. the senior lenders will now own the property. they will continue to own it unless someone makes them a deal they like. Guterman's deal (or something like that ) could work for the reasons I wrote earlier today.
Are you suggesting that the banks simply forgive $1.8 billion just to make the tenants of STPCV happy? Sorry , even in the land of Obama that doesn't happen (actually Obama did do that in the GM and Chrysler bankruptcies but that was because of huge poltical favors he owed to the unions) . That isn't going to happen here.
So unless you and other tenants who don't want any coops have $1.8 billion , your choice is a plan like Guterman's or facing a future in no more than 7 years of more and more apartments becoming market rate when the J51 benefits expire and, in the interim, likely dealing with a new owner who will use all means possible to kick out old RS tenants (just like TS did ).
The true villians here are Pataki and Bruno who years ago forced the Dems to accept the deregulation of apartments in exchange for continuing RS , thus creating market rate apts in STPCV for the first time, whixch allowed MetLife to sell STPCV for $5.4 billion.WE therefore cannot go back to the early days of STPCV under "mother Met". We must now play the cards we have been dealt in the best way possible and I believe Guterman's plan (or something like that is the best way we can play those cards.
As for the TA. In the past I have been a critic of the TA Board . But in this case they did the right thing by hiring some very smart and experienced advisors at Moelis and Paul Weiss. I know that some TA Board members prefer keeping STPCV as a rental while other prefer a coop/condo plan. In any event, they have no legal right to bind any of us and they recognize that. At the end of the day, we must accept that starting on Monday we will have a new owner (almost certainly the senior lenders) and they hold the vast majority of the cards.

Stuy Town Reporter said...

Are you suggesting that the banks simply forgive $1.8 billion just to make the tenants of STPCV happy?

No, I'm suggesting "up yours" to the monied powers that put in way too much money for this place (their mistake) and now expect to be bailed out by the tenants converting to a condo or co-op plan.

Anonymous said...

TS, Blackrock and MetLife got us into this miserable mess. Let them swallow the outstanding debt. I don't see why tenants should suffer as the result of their diabolical greed and avarice. I will never buy my apartment here. If I ever buy a place it will certainly not be here. It would be nothing but a money pit because it has been allowed to fall into such decay and the ambience it once had has now disappeared and been replaced by drunken, noisy, self-centered students and "yunnies." Thanks, but no thanks. As for the TA, it reminds me of the old saying about the fox guarding the chickens.

Anonymous said...

Rent Stabilization will survive if enough people fight for it?

No, Rent Stabilization will survive if our wonderful elected representatives in Albany vote in favor of it. You must have a lot more confidence in them than... well, virtually everyone in New York!

I'd rather not be dependent on them renewing RS laws every few years. My guess is that somewhere down the line, the RSA and REBNY will target Manhattan first.

If they have the votes, they can say, "OK, we'll extend RS laws for the outer boros, in exchange for decontrolling those "rich Manhattanites that don't need it anyway". With that approach, they may well get Dems from BK, BX, QN, & SI to go along, With a few well-placed campaign donations, of course.

In fact, that was the very line Pedro Espada gave for squelching last year's rent reform bills. "High Rent High Income decontrol is a Manhattan issue", he said. "No one in my district pays $2,000+, or makes over $175K".

Anonymous said...

Then we have to put pressure on those reps in Albany, don't we. Sitting around being defeatist won't help us. It will help them though.

Anonymous said...

Just read that Andrew Cuomo has tapped Rob Speyer as a member of his "advisory board." Don't think I'll bother to vote in the gubernatorial election. It's a choice between asshole or asshole.

Anonymous said...

Andy Cuomo was an asshole long before Little Robbie Speyer went into (ruining) the family business.
Still, I'm a little surprised that goatf----r is getting involved in a campaign that already has too many cooked.

For me, not voting isn't an option when Paladino looms so large. Just hold your nose, fill out the ballot, insert, and drink heavily afterwards!

Anonymous said...

I think Carl Paladino is what the Italians call a "Gavone." The uncle/brother/inlaw that you always hope won't show up to family gatherings, weddings, communions, anniversaries, etc., because he'll insult and embarrass everybody, have appalling table manners and pick his nose at the table. When he shows up, everybody looks at each other and asks "Who invited HIM?"
Cuomo has a face and a voice that could scare small children (Halloween face!), but he's definitely the lesser of two evils. He should know better than to deal with the likes of Rob Speyer though. That's really dredging in the gutter!

Peter said...

Little Robbie is a charter member of the Lucky Sperm Club.

I don't doubt the Speyers gave Cuomo some money. And perhaps Mario and Jerry serve on a board together, and Jerry asked a favor: "please give him something to do in the election before he ruins the business entirely!" Who really knows.

Anonymous said...

Andrew Cuomo forced Fannie and Freddie to make sub prime loans. Then the whole thing goes bust, the economy tanks and New Yorkers will elect him Governor as his reward for forcing the worst economic climate on the US since the great depression. Unbelievable! Only in New York could this happen. Anybody But Cuomo!!!!!!