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Friday, October 1, 2010
Condo or Co-op - The Fall of Stuyvesant Town/Peter Cooper Village as We Know It?
There have been so many things written and said about the future of Stuyvesant Town and Peter Cooper Village and the possibility of the complex being turned into tenant-owned condos or co-ops, that I thought it best to have a central clearing house post (that can be bumped up to top position when warranted) to explain and debate what is going on and what the future may hold. At the outset, I must underline that I have no background in real estate, so some of this is as confusing to me as it may be to you. But that's the purpose of this post--to seek and make clarity on an issue that affects most of the tenants here.
I say most, because there is a significant transitory student population here for whom the issue of conversion or no conversion has little or no interest. It should be stressed that this transient population benefits the owner who can easily use these student apartments for self-serving purposes, unless there exist some long-term contracts with the colleges and universities who rent out these units, which I doubt. That's why Tishman Speyer loved students and actively sought to get them into the complex. These students are a chunk of the population here that is in the "owner column," as far as what can be done with their apartments. And these students certainly have no interest in joining tenants battles against the owner. They are just here to use the grounds and the rooms and then, after a year, they are gone. Perfect for an owner who wishes to raise rents on apartments and not get into trouble with long-term tenants.
Anyway, I'll be adding pertinent material to this post in the coming week and even weeks on the fate of this complex.
To start off, let me state that I am seeing another "divide and conquer" issue arising very fast with the possibility of tenants owning their own apartments. The tenants who opt for conversion will join now the investors who will own the complex, and so for them, rent-stabilized tenants will become an annoyance and a burden. Simply put, the condo or co-op tenants will begin to start thinking of rent stabilized tenants as leeches who are, at the very least, not paying for maintenance while they are. And I believe maintenance fees for this place are going to getting higher and higher, considering how old it is and how much it has fallen into disrepair and ugliness in the last year or so. Any new improvements will also be a financial burden on the conversion tenants, who will now, along with the owner or owners of Stuy Town/PCV, be for capital improvement rent raises whereas before conversion, they would have been against. These conversion tenants will also have no interest in pro-tenant rent laws, as they would see that the best relief for them, from their own financial burden, would be to have everyone own an apartment here or pay higher market rates for one.
So, it seems very obvious to me that the conversion idea contains the seed of disunity--even hatred between the two classes established: conversion tenants (now owners of their apartments) and rent-stabilized tenants.
The fact that the ST/PCV Tenant Association is actively pursuing a condo or co-op conversion (at this point it is undecided which) means that if conversion succeeds, the Tenant Association will have difficulty in being "fair and balanced" and may not work toward keeping and strengthening tenant laws.