Sometimes I think that the fix is in. Considering the donations that local politicians get from real estate and investment firms, the reality is that the connections between our politicians--like Scott Stringer and Dan Garodnick--and big monied real estate concerns are probably tighter than anyone realizes. Certainly this issue is NOT being talked about in meetings with ST/PCV tenants, nor is anyone covering this connection in any newspaper that I know of. We will examine these connections as best we can given our limited resources. Knowing the facts does give one pause: Just whose side are these politicians on?
Last week's Town & Village contained an article about the value of ST/PCV. Titled "ST/PCV said to be worth 2.8B, but questions about plumbing remain," the article was troubling for two reasons: 1) The assessment of the worth of our complex had the complex's senior holder reps, CW Capital, "in charge" of conducting the appraisal, which completely invalidates a true appraisal of the property. That's like letting the Big Bad Wolf make an assessment of the safety of the woods for girls wearing red hoods. Let's hope no one is taken in by this scam. 2) The article mentions concerns about the plumbing in this complex and the possibility that "major repairs or upgrades" would be needed. Who would pay for this? Why the tenants, of course, with a significant MCI increase. Our Councilman Dan Garodnick's position? We quote from the article:
"In the event the plumbing system that services ST/PCV is in need of major repairs or upgrades, Garodnick said an MCI could be the way to deal with that, 'although nobody's ever enthusiastic about an MCI.'"
While the reality presented may be accurate, Garodnick's glib response is troubling, as it just about invites CW Capital to go for an MCI hit on tenants with our councilman's approval. It also places a potential wedge issue between those who seek conversion, who would definitely want an MCI upgrade, and those pro-rent stabilized tenants who would not want another MCI hitting their wallets.
I tend to believe that Mr. Garodnick has his own agenda which includes running for higher office. If WE can be useful to HIM in this process, that will suit is plan, rather than HIM being useful to US.
ReplyDeleteTrue, that is what politicians usually do. The difference here for US is that Mr. Garodnick has a vested interest. His parents live here, as well as he and his wife. He also worked for the law firm, Paul, Weiss that is representing the Tenant's Association. So I see this as win, win, win, win, WIN, if I have my wins right (which includes the ambition for higher office)
ReplyDeleteDan Garodnick doesn't give a rats ass about the residents of ST/PCV. He is only interested in buying his and his parents apartments at the special rate he will get. Just like the tenants association's board members. Face it, we were sold out!
ReplyDeleteShow of hands here....who DOESN'T think that this whole deal is a screw job?
ReplyDeleteI don't see any hands....
"Dan Garodnick doesn't give a rats ass about the residents of ST/PCV. He is only interested in buying his and his parents apartments at the special rate he will get. Just like the tenants association's board members. Face it, we were sold out!"
ReplyDeleteSold out to what?
What exactly is the alternative to a non eviction conversion? Once again,emotional complaints but no constructive ideas.
Seems highly unlikely CW Capital is looking to jack rents with MCI's.Their priority is a sucessful conversion.We all know the one major structural flaw in these buildings is the plumbing.And a major repair will be expensive.I think the likely outcome is that any MCI planned for the plumbing would be included in the purchase price of the development.
Ultimately ALL MCI's should be included in the purchase price.That would allow for those charges to come off the monthly bills and provide every regulated renter a rent reduction.
As for the political reps - They want CW Capital to compromise on the price.That would allow for some apts to be set aside as permanant regulated rentals.Other than that what else should they do?
to suggest that Dan Garodnick and the TA Board are somehow going to get a "special" deal on their apartments is both idiotic and libelous.
ReplyDeleteDan is a terrific rep for us.
I am no fan some on the TA Board but to suggest that they are corrupt is ridiculous.
Agreed,
ReplyDeleteDan is the man. The TA does all that they do without getting paid.
I think they are doing a great job and hopefully we will convert the apartments.
I agree with the previous poster. WHat I do not understand though, is CW'S announcement that they are going to renovate the remaining 500 apts and put them on the rental market. I thought Guterman's profit margin was going to be the vacant apartments that he was going to sell at market. Wouldn't they want to keep warehousing these apartments if this was the case?
ReplyDeleteEasir to sell a renovated apartment in the open market then an unrenovated apartment or CW could simply rent at a higher rent after giving effect to value of improvements.
ReplyDeleteThere is no guarantee that CW will agree to a conversion plan with Guterman or anyone else. They could choose to run STPCV as a rental until the market improves and then sell the complex to the next Tishman Speyer. They may think that the rent stabilization laws which currently end next June will be further weakened (Thanks again to the State Senate failing to pass any RS legislation adopted by the State Assembly) during the last 2 years when the Dems controlled the State Senate for the first time in decades-thanks again to Tom Duane who despite a decade of promises failed to get any legislation passed and it know appears that the Reps have regained control of the State Senate.Why Duane got 80% of the vote this year escapes my understanding-notice he didn't show up at the latest TA meeting-he simply takes the votes of STPCV residents for granted!
yes it's easier to sell a renovated unit on the open market, but only if it's vacant. This just doesn't seem to me to be the course of action one would take if looking toward a conversion. I wouldn't be so sure that your second thought isn't the one that's going to materialize.
ReplyDeleteExcellent points.
ReplyDeleteI take nothing for granted at this point--except that CW will do it's best to extract every dime from tenants that it can. They are charged with that responsibility--expect them to execute on that goal to the best of their ability.
Keep your eyes open and your hands on your wallets (or purses, as the case may be).
None of these people are our friends.
Yea,
ReplyDeleteThe fact they are putting the 500 vacant units on the rental
market does not look good for conversion.
Anything is possible but I doubt CW Capital has decided to become a landlord.
ReplyDeleteRenovated apts will sell for more on the open market.500 apts,getting an additional 50k per after renovation brings another 25million bucks.
As for the TA and our local reps- I believe we are in good hands.They all respect this community's identity.But they are also realistic.They are dealing with the situation as it is - not how some of wish it to be.
My position is tenants should be embracing this conversion rather than lamenting it.No more landlords! No more involuntary MCI's.Reimpose the old renting standards and weed out the dormies.A community run by the tenants for the tenants.And for many an opportunity to acquire life changing equity.
I'm confident we'll have a nice balance in the end.Most will own, a substantial plurality will remain rent regulated and a minority will be market rate renters.
It is ALWAYS preferrable to be the masters of our own destiny.This deal will allow that to happen.
TA prez Al Doyl is honestly a really good guy. Dan Garodnick is not. I have spoken with both more than a few times. Al is kind hearted and genuine. Garodnick is disingenuous and unsympathetic. I would never vote for him again based on my personal experience. Al Doyle is trying to look out for affordable housing. Dan Garodnick is looking out only for himself and higher office and salary. He's a jerk.
ReplyDeleteMaxschactman: Yes, renovated apartments WILL command a higher price on the open market, but only if they're EMPTY. If they rent them out then they have to offer the inhabitants the insider price do they not? Why would they do that if they wish to convert?? Guterman himself said that his profit margin was the vacant apartments which he would sell for market or close to it.
ReplyDeleteI too am wondering why they're putting 500 units on the market if they're converting.
ReplyDeleteAre we sure of this?
seems odd. I really wonder if NYU has or will bid for it. Why wouldn't they? Our building alone is 90% students.
and yes, i too think it's a screw job. It makes no sense.
ReplyDeleteI'd bet some money that CWCapital will wait out a bit for market to go up. They'll find a sucker to give them 3 to 4 billion. NYU would be a perfect buyer.
your article should explain what MCI is for your readers.
ReplyDeleteOne major problem with "waiting out the market" is they would have to wait out the market until 2020 when
ReplyDeleteJ-51 ends and 40% of the complex goes market rate again.
CW Capital are not RE investors, I dont think waiting out the market is effective for them.
Also, their role as special servicer to the mortgage holders is to get the most $$$ from the complex in a present value sense.
With that said, I think the most value for them is still by going Coop, (they are not getting over 2.5M from anyone except the tenants)
Either way its not a screwjob, CW Capital has the right to get the most they can for the property, its their fiduciary responsibility.
People who live here know well enough what a bloody MCI is.
ReplyDeleteNobody appears to have mentioned Stuy - PCV internal Steam System. This complex does not have any furnaces / boilers. Heat and Hot Water are provided from the Con Edison Steam System. ST / PCV internal steam system has never been upgraded or for that matter had an engineering evaluation since it was built (1947). This system is in serious need of upgrade and I can assure you....it will literally cost millions. Absent a thorough engineering evaluation of the plumbing INCLUDING THE INTERNAL STEAM SYSTEM, you would have to be nuts to consider buying.
ReplyDeleteEven better. I am seriously thinking they're using this whole buy your apartment as a strategy to promote rentals.
ReplyDeleteNew tenants love that. "they might even go coop---get in now"
I don't trust them and neither should any tenant.
I'm not okay with a hefty MCI to resolve the plumbing problems, considering that I have lived over twenty years with intermittent brown sludge running out of my hot water taps for up to three hours at a time. So far, as rent stabilized tenants, we have paid for new windows, new roofs, pointing of the outside bricks, new elevators, new outside doors, and upgrading electricity in our apartments if we chose not to swelter in the heat. Did we pay for the new and improved security system with the key cards and the new and improved washers and dryers? I can't remember. I'm paying $1,900 a month rent for a 65year old kitchen and bathroom, and floors that need to be waxed, which is sometimes more than the former MR tenants pay for renovated apartments. Oh - almost forgot - those of us in the original rent stabilized apartments also had to buy our own PCVST approved air conditioners that cost three times the average. The MCI laws need to be revised. Expecting tenants to pay in perpetuity for building maintenance is ridiculous. In addition, expecting rent stabilized tenants who do not want to buy to foot the bill through another MCI increase to replace or upgrade the plumbing for the new owners is ridiculous - and greedy. Want to buy? Know what you are buying and make sure you'll be able to afford increased maintenance costs to keep the buildings in good repair, increased taxes, and absorb the financial obligations of those owners who default.
ReplyDelete