Rose Associates Management: Epic FAIL

Terrible snow storm readiness and turning a blind eye to dog problems exposes Rose Associates as being either unwilling or unable to manage Stuyvesant Town and Peter Copper Village in a professional manner.



In case you thought that the return of Rose Associates as managers of Stuyvesant Town and Peter Cooper Village would be a good thing, you may now be thinking that you were woefully wrong. We all know about the worst snow cleanup job in ST/PCV's history (it happened this past week in case you were hibernating) and for weeks the evidence has been accumulating that Rose Associates is doing nothing about the increasing dog problem in the complex. It's gotten so bad that now dogs are being walked freely, sometimes without leashes, right through the central Oval grounds, while close by the security guard in the booth monitoring the Christmas Tree (yes, the tree is nice) does nothing to stop dog owners and give them warnings. Dogs are now seen more frequently off leash, particularly in the back areas of buildings and dog feces/smears are like a mine field one has to be on the lookout for, a particularly burdensome chore at nighttime when visibility is poor.

Furthermore, many buildings are in need of painting of hallways and doors, missing tiles being replaced, and a better handling of the garbage situation. The descent of Stuyvesant Town and Peter Cooper Village into a slum continues. Nothing coming up in the New Year points to a change in this dreary and depressing evolution.

Armed Thefts in ST/PCV Expose Security Faults

The story is here:

http://www.dnainfo.com/20101203/lower-east-side-east-village/police-tenants-building-profile-of-stuy-town-mugger

Those of us interested in security in our complex have known for a while that the high-tech security monitors over at the Management Office are fairly worthless in stopping or deterring crime. Boots on the ground, fellas. That means security walking the beat of ST/PCV. It's good exercise and may just lead criminals to believe there is a security presence here.

Dan Garodnick Okay with Hefty MCI Increase

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.

Lenders Take Over ST/PCV

http://www.nytimes.com/2010/10/27/nyregion/27stuytown.html?_r=1

Lenders formally took control of Stuyvesant Town and Peter Cooper Village on Tuesday, ending a four-year odyssey that put this affordable middle-class enclave at the center of both the biggest real estate deal in history and a major financial debacle.

CW Capital, the company representing the complexes’ senior lenders, is now expected to begin negotiations with tenants over what could be the country’s largest conversion of rental buildings to a condominium or cooperative. That could start battles among the 25,000 tenants over whether the apartments should remain affordable or be allowed to trade openly on the real estate market.

The changes occur under strikingly different circumstances than in 2006, when a partnership of Tishman Speyer Properties and BlackRock Realty bought the 80-acre property from the original owner, Metropolitan Life, for a record-breaking $5.4 billion.

The plain red brick buildings, built by Met Life more than 60 years ago for returning World War II veterans, were considered by investors to be a gem in the rough because of their Manhattan location and sturdy construction.

The buyers expected to triple their net income by 2011 by replacing longtime residents paying regulated rents with tenants paying higher market rates. But their plans fizzled after residents resisted and the partners failed to convert enough apartments to market rents. In January, they defaulted on a $16.1 million monthly mortgage payment.

The casualties from the ruptured deal spanned the globe, as analysts revised the value of the property to $1.9 billion, less than one-third of the acquisition cost. The Church of England, the government of Singapore and several publicly traded American companies lost hundreds of millions of dollars, while three public-employee pension funds in California and Florida saw their combined $850 million investment evaporate.

On Tuesday, CW Capital, which represents a multitude of investors who held the $3 billion first mortgage, effectively took control by buying out the interests of William A. Ackman, chairman of the hedge fund Pershing Square Capital, and Michael L. Ashner, chairman of Winthrop Realty Trust. The two had paid $45 million for a $300 million block of secondary loans with the hope of taking the property away from CW Capital.

Their strategy failed after CW Capital successfully blocked them in court, although Mr. Ackman and Mr. Ashner are getting back all but the legal fees they spent. By buying the men out for $45 million, CW Capital was able to avoid future litigation, but more important, it allowed them to structure the transfer in a way that avoids, or at least defers, upwards of $100 million in state and city taxes.

“This brings one chapter to a close,” said Gregory A. Cross, a lawyer for CW Capital. “We have control of the property, and we’ve resolved all the outstanding litigation. We now have maximum flexibility in dealing with the different constituencies, in particular, the tenants.”

Little will change immediately for the 25,000 residents of the sister complexes overlooking the East River; CW had already installed Rose Associates as the manager of the 11,226 apartments, garages and retail space at the complexes, replacing Tishman Speyer Properties. Rose had managed the properties for Met Life for several years before the sale.

But CW Capital has told the tenant association and real estate executives that its first priority is to try to reach a settlement over rents and overcharges for about 4,300 apartments at Stuyvesant Town and Peter Cooper Village. Last year, the New York State Court of Appeals ruled that the owners of the complexes had wrongfully deregulated and raised rents for those apartments while getting special tax breaks from the city.

More at the above link.

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.

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.

Stuy Town Dog Wars

You know, in order to post on other matters, I may have to introduce a new blog--Stuy Town Dog Wars--that will just deal with this pesky issue of non-compliance of the ST/PCV dog rules by a good number of dog owners in this complex. There's important conversion plan news and debate up ahead, the future of Stuyvesant Town and Peter Cooper Village, so let's finalize this dog issue for the moment.

Those of you who read Town & Village saw the above Sept. 23rd front page item about rude dog owners, which continued on for two pages inside the newspaper. Dog owners who are not only rude but aggressive against anyone who reminds them that they are not following the dog rules they agreed to follow when they acquired a dog (or dogs) in this complex. In the article, a resident states that, within ten days, he got into two altercations with dog owners who had their pets off leash. One of the owners, when reminded by the resident of the rule of dogs needing to be on a leash, responded with slurs, including, "You wanna do something about it, faggot?" The other owner admitted, when asked, that she wasn't a resident of Stuy Town, before retracting that statement and replying that she had a right to break the rules!

Worse, when the resident complained to security about the dog owners, he was told that security has been instructed by management to do nothing! A spokesperson for Tishman Speyer (may this company's name and Rob Speyer's name live in perpetual infamy in NYC history) refuted that, stating that security does enforce the rules. [Personally, I've seen occasional enforcement in the Oval grass area, but no place else. That's if security is around, which more often they are not.]

In another case, a Peter Cooper resident says the sight of unleashed dogs is common in PCV. When she confronted a man about his unleashed dog, his response was that the rules did not apply to him. In another incident, when she addressed a man who was walking his unleashed dog around the Oval, the man "started screaming, saying he was going to report me, that I was assaulting him." [Hm, this kind of skewered view where the person in the wrong is the one who feels put upon reminds me of something recent....]

Folks, this kind of lax, arrogant behavior on the part of bad dog owners has got to stop. If security is not up to the task, then we as residents (non-dog owners and dog owners alike) who care about how this space looks and what makes it breathable (disregarding the terrible things done to it by Speyer & Company) have to speak up. I'm not necessarily concerned about a dog along a patch of non-Oval grass, but dogs urinating on flowers and trees (which I've frequently seen), being in flower beds (ditto), being off leash or on retractable leashes stretching out longer than six feet are a definite problem, as are dogs running around in one of the playgrounds. (Today I witnessed a dog taking a crap in the middle of the AstroTurf playground.) If we put the pressure on, bad dog owners will get the message. At least most of them. To remain completely silent, either by not addressing the issue to the dog owner him/herself or to management/security, is just letting this place go to the dogs.

P.S. Perhaps it's too late now with a new management soon taking over (though that shouldn't stop enforcement of the rules), but it may be a good idea for whoever is in charge of the complex now or will be in the future to post in every building a dog rules "reminder" and a warning of dog rule enforcement.

Dog Owners Do Have a Dog Run -- All of Stuy Town and Peter Cooper!

We received these photos from a reader of this blog, taken the other day. We didn't need the accompanying text, as it's easy to see what these photos relate....


Let's see.... 3 dogs. A dog off leash, and another at the end of a retractable leash that's longer than 6 feet.


Pretty soon, two of these dogs are playing in the garden area of the Oval.


Scampering, trampling....


Hm, tasty! Perhaps a little pee-pee will make these grow a bit more?


Ah, a fourth Fido joins his friends!


The garden area was never meant to be an ad-hoc dog run. Many of the plantings are sensitive to canine intrusion and urine. There is NO debate on this. By the rules of Stuyvesant Town, known to Stuy Town tenants, dogs are NOT allowed in the grass or garden areas of this complex. Period.

But wasn't it just wonderful seeing those cute little things play!

Arrogant Dog Owner Outs Himself in T&V

Well, Stuy Town management has his name and his own words in the latest Town & Village paper. The guy flat out admits, rather boastfully, that he lets his dog in the lawn space of Peter Cooper Village. "I take the position that my dog has every right to occupy lawn space as do the trees." Well, buster, you may take that position, but it's a position that is against the dog rules here, so you are clearly violating these rules by your own admission.

This guy also must be a fan of retractable dog leashes. "A major advancement in dog walking technology is the retractable long leash." Well, it's not a major advancement in New York City, for if you extend your leash beyond six feet, you are breaking the law. Every single time I see a retractable leash in Stuy Town or PCV, it's owner eventually or automatically extends it beyond six feet. The new owners of ST/PCV should just simply ban the things in the complex.

As a final boast, he claims that his "dog bites back," whatever the hell that threat means. Mister, if your dog bites me, I will receive a nice sum of money from you in a lawsuit--and then I will be able to afford a condo here, while you'll be living in a flop in Jersey . . . with your dog.

Ackman Loses - Auction of Stuy Town/PCV On (But not so fast - Ackman appeals!)

http://www.reuters.com/article/idUSTRE68F4VJ20100916

Bond holders who own a $3 billion mortgage on Stuyvesant Town/Peter Cooper Village will be free to auction off the massive Manhattan apartment complex after a state judge on Thursday rejected an attempt by a junior debt holder to win control of the property.

New York State Supreme Court Justice Judge Richard Lowe III's ruling is a defeat for William Ackman's Pershing Square Capital, which had sought to take control of the complex, commonly referred to as StuyTown.

The ruling lifts a September 10 stay that prohibited CWCapital, which represents the bondholders, from completing a foreclosure auction now set for on October 4.

A sale would be the final chapter on the 2006 sale in which an investor group led by Tishman Speyer Properties bought the 56-building, 80-acre apartment complex, for $5.4 billion, and became the poster child of the U.S. commercial property boom.

Its failure less than three years later is emblematic of the commercial real estate bust. The property is valued at less than half the 2006 price.

Update:

9/17/10:

http://therealdeal.com/newyork/articles/pershing-square-capital-management-and-winthrop-realty-services-plan-stuyvesant-town-and-peter-cooper-village-appeal-of-ruling-in-favor-of-senior-lenders

Pershing Square Capital Management and Winthrop Realty Services, the Stuyvesant Town and Peter Cooper Village junior debt holders whose attempt to gain control of the massive residential complex through foreclosure was stymied yesterday by a New York State Supreme Court judge, aren't walking away without a fight. The joint venture officially announced plans last night to appeal the decision, which allowed the complex's senior lenders to proceed with their planned foreclosure auction early next month. In a statement, the venture said it "strongly disagrees with the trial court's ruling and will appeal the decision to the New York appellate court and will seek to stay the mortgage lender's planned property foreclosure. If [Pershing Square and Winthrop are] unsuccessful on appeal, or if the mortgage lender is permitted to foreclosure prior to a successful appeal, the value of [the partners'] investment in the mezzanine loans may be lost." Pershing Square has invested roughly $36 million in the loans, while Winthrop has put in around $10.5 million, the companies said.

The Death of NYC's Soul - Dan Garodnick Votes Yes

For true New Yorkers, the sight of the Empire State Building is always transfixing and embracing when it's spotted, as a corner is turned or a view finally provided from a merciful street. These vistas when the Empire State Building is in sight have been decreasing in the last decade plus, with the building of innumerable slivers and high-rises in Manhattan. Now, in this disastrous economy, many of the units in these buildings are waiting for a buyer. So guess what's happened in this atmosphere? New York's politicians have decided to allow the building of another high-rise, a true Gigantor (of glass, of course) that will, when completed, forever change the postcard view of what New York has been for decades by blocking or significantly altering a view of the Empire State Building at certain compass points. This building, with the inspiring name of 15 Penn Plaza, will rise 1,216 feet, and be situated 900 feet away from the Empire State Building. Gone will be Hotel Pennsylvania, on the property owned by Vornado Realty Trust, and up will rise 15 Penn Plaza in its place.

Construction union officials supported the initiative (of course), while people like former parks commissioner Henry Stern stated that the 15 Penn Plaza "could do irreparable harm." Community Board 5, whose domain lies in that area, nixed 15 Penn Plaza. And New Yorkers, polled on the building, also were against it. Zoning regulations were also against the building, its size being 56% beyond what's allowed.

Enter the City Council, which had the final say in the matter, the same Council that voted to overturn the people's will (voted on twice by the people) to mandate two-term limits, when Mayor-for-Life Mike Bloomberg lead them on a leash that served his interests, as well as their own. The Mayor was for 15 Penn Plaza, and so were Council Speaker Christine Quinn and Manhattan Borough President Scott Stringer. The Council voted on August 25, 47 to 1 to approve the building and do away with the zoning laws that would prohibit it. Sorry to say, our councilman, Dan Garodnick, was part of this pack.

Council Speaker Christine Quinn, who has to be one of the most despicable of New York's politicians (Lord, I will offer you a sacrifice of 100 goats to make sure that she never becomes Mayor) stated: “I’m thrilled to see the potential of thousands of new jobs being created at this project. This proposal is not removing the beauty of the Empire State Building from our skyline, or even diminishing it.” Bullshit.

And guess who was quoted in Bloomberg News? Our old "friend," Bud Perrone. Yes, Tishman Speyer's spokesperson (former?) is now spokesperson for Vornado Realty Trust!

Speaking for Vornado, Bud Perrone stated that the building "will be an outstanding addition to New York’s iconic skyline. We look forward to working with the council to implement strong minority and women participation in the development and construction of 15 Penn Plaza.” Minority participation was the only item of conflict in the City Council debate, not whether the project would get approval. Approval seemed a done deal, perhaps because of the real estate monies pouring into the coffers of New York City's politicians. But we'll get to that in a moment....

I've no affection for the owners of the Empire State Building--Anthony E. and Peter L. Malkin, who seems like assholes when it comes to what lighting the top of the Empire State Building gets, honoring their Chinese lords and masters for the anniversary of the Chinese Communist state, while denying Mother Teresa a night of blue and white. But this is not about the Malkins, Bloomberg, the City Council, or whomever else. This is about New York--Manhattan in particular, and what makes this city a city and not just an island ripe for continual real estate development. It's about the soul and heart of the city, which is, if you haven't noticed, rapidly disappearing through the machinations of rezoning, mouth-watering greed and the monied interest of real estate firms and the unions who muscle the Democratic Party.

Now, with this vote by the City Council setting such a precedent, there is really no reason to hold back on other similar high rises that could potentially encircle the Empire State Building and block it from any view, forever. In fact, with the vote on extending term limits and the votes on rezoning that go on and on across the city, we see that there is really nothing stopping the Mayor or the City Council from doing anything that they want, the will or the voice of the people be damned. Perhaps, when it's realized that not enough Stuy Town and Peter Copper tenants will fall into the trap of acquiring burdensome second mortgages to pay for their proposed condos, the City Council will vote to eminent domain everyone's ass out of here, tear down the complex, and build super luxury high-rises over this ground, which you just know the real estate folks would love to do. And where will you be, if you can't afford these super luxury rents? In one of the outer boroughs or in Jersey, where, their thinking is, you really belong, you middle-class serfs.

And the idiocy of building such a monster building, right in the middle of one of the busiest thoroughfares in Manhattan is beyond incomprehensible--it's stunning. If you think traffic, both pedestrian and vehicular, is bad now along 33-34 St at Seventh Ave, wait till this building is completed and fills up with thousands of workers, if that happens (not a sure thing, in the current economy). Add also more New Yorkers who will be pasty-faced, courtesy the huge shadows cast from 15 Penn Plaza, which will block sunlight from the pavement.

The construction of this building, in this locale, is pure insanity.


A view of 15 Penn Plaza and the Empire State Building from the west.


A view of the Empire State Building and 15 Penn Plaza from the east.

It was dismaying that our councilman, Dan Garodnick, voted yes, and that he, rather pridefully, provided quotes for newspapers validating his vote. But, then again, this is the guy that's so up on the disastrous Second Ave. Subway. Googling Dan, we find he's been in some hot water with preservationists: Garodnick's Marx's Brothers building flap. And check here. And this. And this.

Garodnick appears relatively clean from heavy real estate monies to his campaigns, though he's getting a shitload of money from his old law firm Paul Weiss Rifkind Wharton and Garrison, which just happens to be representing Stuy Town and PCV tenants.

But Manhattan Borough President Scott Stringer is, to put it very plainly, a whore for real estate contributions, including monies from Vornado. Are term limits going to end this bozo's influence in New York politics, or will he, like Bloomberg, stay on forever?


Scott Stringer's campaigns get huge contributions from real estate interests. Is it any wonder where he stands on the building of more and more high-rises in Manhattan?

I don't know yet about the accuracy of the commentary on Speaker Christine Quinn following this interesting post, but if that $91,850 bundled from Daryl Roth is true--well, someone with more pull than poor Stuy Town Reporter should do some serious investigating. Daryl Roth, you see, is the wife of Vornado Realty Trust CEO Steve Roth, the same Vornado Realty Trust that owns the present Hotel Pennsylvania and the future 15 Penn Plaza.

Then there are all the donations from investment/money management firms that these politicians get. Why?

Mayor-for-Life Bloomberg? Bloomberg is a disaster when it comes to being the steward of NY's soul. His offhanded, arrogant response against the Empire State Building shows that he considers the ESB just a building and nothing more: "One guy owns a building, and he'd like to have it be the only tall building. I'm sorry that's not the real world." What true New Yorker thinks this way about the Empire State Building? Most Americans do not think this way about the ESB, considering one of America's great iconic symbols. Is Bloomberg that thick that he can't understand the issue? No, Bloomberg is not a stupid man, but he is soulless man. Which is why the true New York is disappearing under his tutelage.

Part of the "reasoning" behind allowing 15 Penn Plaza is that the building will provide construction jobs. Yes, but where are those construction workers coming from? where are the firms located? how much of a cut will union bosses get?

As Steven Sanders opined in the latest T & V, 15 Penn Plaza will bring "permanent jobs with tens of millions dollars in new tax revenue to the city each year." Well, there just happens to be a glut of office space in Manhattan now and in the foreseeable future, and there are many other areas where a building like this (or, better yet, two buildings half the size) could be built. If the economy does not significantly improve in the next ten years, then this will be another albatross around the neck of the city, much like that 1000 years in the making 2nd Avenue subway that politicians seem so delighted with.

Perhaps, to help out New York's troubles, the Saudis or Dubains can buy up the office space in 15 Penn Plaza and add a minaret on top with the blessings of dhimmis like Bloomberg and Scott Stringer and the rest of the City Council. Wouldn't that be a laugh?

Going, going, soon gone....

Brother, Can You Spare a Half-Million?

In the confusion over who will own Stuyvesant Town and Peter Cooper once the lawsuits are resolved, something emerged (and seems to have been missed by many) that was eye-opening for residents of the complex. In a NY Times report on August 9th concerning "billionaire hedge fund manager" William A. Ackman's "great ambitions for Stuyvesant Town," alert residents received the first real money figures for what may be in store for them should the complex turn co-op. If you thought you could buy your apartment for 100K to 200K--forget about it. You were dreaming or smoking your 60s' bong.

http://dealbook.blogs.nytimes.com/2010/08/13/ackman-lays-out-his-plan-for-stuyvesant-town/

Here are the important paragraphs:

At $3 billion, Mr. Ackman would be paying about $300 a square foot for Stuyvesant Town. That is around a third of the value of recent sales in the area. That gives Mr. Ackman a lot of room to profit — that is, if he is successful in selling a large majority of the units.

This is where it gets complicated. The co-op conversion would assign shares in a corporation to each of the apartments based on the size of the unit and its location within the complex. The tenants would have the first right to buy those shares and effectively own their apartment. The tenants, regardless of how long they have been there, would be offered a discounted insider rate to buy the shares.

Mr. Ackman has agreed on a noneviction conversion, meaning that rent-stabilized tenants cannot be thrown out for failing to buy into the corporation, while free-market tenants would be able to continue living at the property through the end of their leases.

“Even if you sell units at a significant discount to market — with market being somewhere around $800 to $900 a square foot — that should be enough to pay down the mortgage and deal with the fact that we will have units that will be losing money,” Mr. Ackman said.

About 40 percent of the rentals are free market, so that means Mr. Ackman could renovate them when they become vacant and flip them quickly at market prices. At $800 a square foot and assuming 40 percent of the rentals equals 40 percent of the complex’s square footage, Mr. Ackman could make nearly $3.5 billion.

But that is assuming those rentals stay free market. A judge has ruled that the previous owners of Stuyvesant Town improperly converted many rent-stabilized units to market rent. That means many of those units appear likely to get their rent-stabilized lease back, throwing off the whole equation.

If a large number of apartments are returned back to rent stabilization, Mr. Ackman would need the majority of Stuyvesant Town residents to buy their units for more than $300 a square foot. But while some tenants might see this as a good investment, others might not have the cash for a down payment, especially given the downturn in the economy — or their rents may be cheap enough that buying does not make sense.

With the average size of an apartment at Stuyvesant town’s being 911 square feet, according to Mr. Ackman, that would mean that if it sells at about $600 a square foot, which is well below market price, it would cost about $546,600. The buyer would need to put up nearly $110,000 cash for a 20 percent down payment. The monthly payment, with a 30-year fixed-rate mortgage at 6 percent, plus assuming $1,500 a month for maintenance and taxes, would total about $4,100 a month.

A 5 percent mortgage would bring that total monthly payment down to about $3,850, but that is still higher than market rents of about $3,000 a month for similar amount of space. (The rent-stabilized tenants pay probably half that amount.)

Based on those numbers, it looks as if tenants will be paying considerably more than their current rent to own at Stuyvesant Town, even factoring in tax savings. Many will probably choose to continue paying below-market rates (as in many cases, it would be below the maintenance costs), which will eat away at any profits made from the sale of free-market units.

------

One wonders who among us will be stupid enough to pay far more for living here than we do now. Perhaps sly deals on the side with investors who will offer a million for an apartment would make things workable for tenants (if they want to move out of Manhattan), but otherwise the above plan seems like an instant failure. Besides which, would you pay over half-a-million and get into personal heavy debt to own this run-down, feces and urine laden college town--where you will probably have to pay extra maintenance fees for neighbors who choose to opt out of the plan?

Now, somehow, I don't think the city big shots will let tenants off the hook. Ackman, if he gets the property, promises a non-eviction conversion. But that's now, before reality sets in.

I sense a royal screwing up ahead.

No Mosque at Ground Zero

Ah, the Smells and Sights of a Dog Friendly Stuy Town/PCV

A favorite corner at the Oval for dogs to piss on. All vegetation dies here, and soon the bricks will crumble.
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The summer. Hot, humid. And the stifling smells of dog urine all over Stuyvesant Town and Peter Cooper Village. Now, there's few places people can sit and relax on benches without being overwhelmed by the stink of dog urine or crap.

And when you walk these lovely grounds--watch your step....





With each passing month, dog owners are feeling more and more entitled to do what they want by allowing their dogs on the grass and garden areas, removing dog signs, going into areas blocked off for new grass to grow, tagging property with messages about dog runs, letting their dogs piss and shit wherever, releasing their dogs in stairwells to piss against the walls and pipes, letting their dogs off leash or extending retractable leashes to ridiculous (and illegal) lengths. These obnoxious air-heads don't give a damn about the rest of the community and our enjoyment of it, just as long as they get to do what they want with their Fidos.

The worst decision Tishman Speyer made--removing the ban on dogs in Stuyvesant Town and Peter Cooper Village!

And, of course, you can forget our Security being diligent concerning enforcing the dog rules here. Get off your fat asses, guys, and start giving out tickets!

Mexican Gang Tags Stuy Town

With so many Mexican workers in and around Stuy Town, you knew it would come to this. At the seat of one of the benches around the Oval (near the Security Booth of all places!), we found this "La Raza Loca" tagging.

Viva Mexico!

Someone Please Fire Stuy Town's Security Chief

Well, it happened. An elderly woman got knocked down by a speeding bicycle on the 20th Street Loop and wound up in the hospital. According to Town & Village, a rep for Tishman Speyer had the audacity to state that security is "vigilant" in enforcing the rules in Stuyvesant Town (which includes no bike riding). BULLSHIT.

Our security team is regrettably NOT vigilant (aside from a rare employee or two). Security allows bike riding right before their noses, as well as other infringements of the rules (dogs off leash, dogs on grass, etc.) Our security SUCKS overall.

The culpability rests at the top, so--SOMEONE PLEASE FIRE OUR SECURITY CHIEF. He is either clueless or, if clued in, doesn't give a damn.

Get Your Tomatoes Ready for Scott Stringer

Start preparing your tomatoes when Manhattan Borough President Scott Stringer shows up at another Tenants Meeting. Make those tomatoes as full and red and pudgy with juice as Stringer. Stringer's support of the building of a mosque right near Ground Zero is typical multicultural, pie-in-the sky flabbiness. (Scott would like pies, of course.) Community Board 1, with high-fives from Stringer and Mayor-for-Life Mike Bloomberg, have voted 29-1 to support the proposed mosque that is an obvious slap in the face to those who have lost loved ones in the 9/11 tragedy, and another humiliation of this country in the age of Obama.

May Stringer and Mayor Bloomberg's names be etched forever in the Wall of Shame, and may their descendants be placed under Sharia law and be beaten with sticks severely about the buttocks whenever they complain.

The Man Who is Helping a Tenant Buy of ST/PCV?

If you been listening to the Tenant Association and politico ST/PCV talk a few weeks ago, you may have been made aware that someone is helping the tenants, behind the scenes, in their attempt to acquire Stuyvesant Town and Peter Cooper Village.

Could this be the man?.....



Read on, from NY Observer, Eliot Brown reporting:

It was something to be avoided. As America’s biggest foreclosure waiting to happen, Stuyvesant Town and Peter Cooper Village was viewed by the financial world as a $6.3 billion bet gone bad.

David Tepper saw an opportunity.

Founder of the high-risk–high-yield hedge fund Appaloosa Management, Mr. Tepper is the king of sniffing out the undervalued among the distressed, often realizing fantastic returns. After betting big on banks at their nadir in early 2009, he topped AR: Absolute Return + Alpha magazine’s list of the year’s top hedge fund earners, raking in an estimated $4 billion for himself.

Now, after buying more than $800 million worth of bonds that control Stuyvesant Town within the past year and a half—many of them risky—he is muddying up the giant foreclosure on the property, showing that he has no interest in watching from the sidelines. In late February, he filed legal action to steer the property in a new direction, in a bid to protect—or maximize—his investment, an action being fought by the special servicer organizing the foreclosure....

Mr. Tepper’s aim, of course, is transparent: He simply wants the value of Stuyvesant Town to return to at least $3 billion, the initial value of the mortgage. That way, he can realize a maximum return on his investments.

The best solution, he said, is for the tenants to buy it themselves—a plan they are pursuing—as they have the ability to pay more given that the apartments could quickly be converted to condos or co-ops.

Mr. Tepper’s advice to the tenants: Act fast, as the markets are improving.

“Nothing would make me happier than to see 11,000 new homeowners, if the first mortgage is paid,” he said. “The way things are going and the way things are improving, I hope they act fast for their sake.”

Full article here.

Skateboarding Ban

No, skateboarding is not banned yet in Stuy Town. But it should be.

Two reasons:

1) The cracking, slamming noise is probably the most obnoxious noise in Stuy Town and sure to disturb everyone's peace.

2) Skateboarding ruins steps and the sidewalks, or anything else a skateboarder may wish to play on.

Now, some would add a third reason: The safety of the skateboarders themselves. I've no such concerns, however. If you want to fracture one of your bones, go right ahead, just don't wake me up while you are doing it.

The Good, the Bad, and the Ugly

Kudos to the Security Guard on Saturday around 5:15 pm who actually made bicyclists get off their bikes as they tried to pass him by. He was stationed, for a bit of time, in front of the northern Oval playground (#10). Of course, once these cyclists were out of his view, they got back on their bikes. But an attempt was made. And the no bicycle riding sign is back up at the Oval guard booth.

Today, Sunday, was a disaster. Those green rails were back and no security was around to make riders get off their bikes.

On top of that... is Playground 10 for the use of sunbathers and picnics???

Pretty arrogant to set yourself up there when it's supposed to be for the use of those who want to participate in recreational play, including, many times, children. Fuckin' NYU hogs.

And what's up with the sunbathers on those mini-golf mounds? Right in front of the guard booth--and today with a dog plopped on the grass there, too!

Oh, and if you think I'm a dog hater, you are wrong. This is my favorite dog in the world, and I want to invite him to Stuy Town....

Happy Easter!

It was a happy time, it was a mythical time--when Stuyvesant Town at Easter was filled with flowers and lovely landscaping. Yes, such a time did actually exist before Tishman Speyer came to own this complex. And now we have the above, a photo taken today of the Oval "garden" on Easter Day.

Pathetic Security Gives Up on Stuy Town

Faced with a lack of motivation and will power from higher powers (including our rotund Security Chief) to make sure that the rules of Stuyvesant Town and Peter Cooper Village are being followed, our complex's security force has just about given up. They've taken down the sign at the window of the Oval guard booth which said that bicycle riding is prohibited and have put in place those ugly green barriers at four Oval points to slow down, but not stop, cyclists. These barriers are a godawful visual blight and are a pain in the ass to both pedestrians and joggers, who must twist their bodies to maneuver through the maze. WHAT A FUCKING STUPID IDEA. Whoever thought of these barriers should be FIRED.

Furthermore, security is now allowing impromptu dog runs right in the Oval area, with gatherings of dogs off leashes and the continual use of the garden and grass areas by dogs.

Security may as well start wearing badges that state "I Surrender." What a sorry state we are in now.

Why the Chief of Security Should Be Fired

It's evident that things have not been working well, via Stuy Town and Peter Cooper Village's crack security force, for quite a while. Though a portion of the blame can be laid at the feet of Tishman Speyer and their awful reign of this place (may their name forever symbolize avaricious greed and massive incompetence), it's time to get a tough attitude toward our security force--and the guy in charge of it, a hefty gentleman who ensconces himself in the Management Office for what seems all of his work day.

ST/PCV's security force doesn't have much to do, which makes their lack of will to fulfill their functions that much more annoying. They certainly are fruitless at catching anyone who actually commits a crime, as the near 100% reliance on the MCI-gift monitor center off the FDR Drive is self-defeating. As has been pointed out numerous times, you need "boots on the ground," a visible presence, to dampen the very idea of committing a crime here in this complex and, possibly, catch perpetrators in the act. But, excepting occasional vehicle tours, the occasional security presence at the Oval Booth, and the manning of PCV's 1st Avenue guard booth, you will not see a security presence much around this area.

Aside from the crime issue, there are certain rules and regs of living here, and security has proven itself to look the other way at offenses or simply not care about them. I refer to the rules and regs concerning bicycle riding and dog management. Bicycle riding is PROHIBITED in this complex, yet security does just about NOTHING to stop bicycle riders. Once in a blue moon, particularly when a Stuy Town blog notes the problem, there is a very temporary push to stop a delivery cyclist or a 6-year-old on a bike, but otherwise these two-wheelers whiz by, even in front of security, and nothing happens. WHY?

As for the dog rules, security does NOTHING nowadays, allowing dogs to piss and crap everywhere, go on the grass and gardens, go off leash or run out those stretchable leashes that extend a mile long. Furthermore, security does not say a word to thug outsiders who walk their prohibited dogs (like pit-bulls and German shepherds) through the complex.

WHAT THE FUCK IS GOING ON?

So the security here is run abysmally. That's evident. And now it's time someone paid with their job for this incompetence and lack of carrying out basic job duties. And that someone has to be our Security Chief.

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.

Bloomberg to ST/PCV Tenants: Drop Dead!

Maybe not drop dead, but get on life-support.

From The Gothamist:

Mayor Bloomberg says he won't dig into the city's wallet to help tenants of Stuyvesant Town take ownership of the foreclosed complex, saying he'd rather the deal go elsewhere. "That's not what we're here to do. We want to make sure that whomever does take it over has a profitable deal," he said. But the Daily News reports that residents think he's judging them unfairly. According to City Councilman Daniel Garodnick, who lives in Stuy Town, "the mayor should not underestimate what the city can do."

The Manhattan Democrat added that "Whether through financing or by helping the tenants partner with a nonprofit entity, the city can play a critical role." But if history shows us anything, it's that Bloomberg won't play ball with the tenants. The mayor previously refused to help residents in a 2006 bid to buy the property. Instead, sellers of the 110-unit development made a doomed deal with the Speyers, who paid a record price of $5.4 billion for the property, only to default on it earlier this year.

Though tenants bidding on this complex is perilous (more on this in a future blog entry), Bloomberg's response is sourly typical of him. I guess he must already know which of his rich pals is headed to buy ST/PCV.

Meanwhile, here's a chestnut from Jackie Mason on Bloomberg:

Eat Your Dog

The decision by Tishman Speyer to reverse the long-standing rule in Stuyvesant Town/Peter Cooper Village against dog ownership by tenants was one of the worst decisions made by the company and when TS leaves (hopefully soon), this decision will no doubt remain in place and be the gift that keeps on giving--as in more dog dumps and dog crap smears on the sidewalk, urine on the grass, noise from barking dogs in apartments, dog urine in elevators, and the ever present smell of a zoo in many parts of the complex. As was to be expected, dog owners have not obeyed the dog rules that TS set up and our crack security team (which is, let's face it, both lousy and lazy) has not enforced these rules with any consistency. I've seen dogs piss in the grass right in front of the Oval security booth without a word from the security guard inside (if he happens to be there, of course).

The dog owners of this complex have a sense of entitlement regarding their pooches and the patronizing, morally superior sense that you are sub-human if you don't love their beasts and think them cute and adorable. Perish the thought that these Fidos may actually be lessening the quality of life of everyone else in the complex.

As the years go by, it's going to get worse. Whoever will manage this place may as well give up and throw all dog rules out the window. Let dogs piss and crap wherever they want to, run free without leashes--and as for dog runs--well, that's what the playgrounds are for, no?

Now comes evidence that having a dog is bad for the environment. Yes, you green-living loving dog owners, your dog is ruining the quality of life for the entire planet and plunging it into an Al Gore Armageddon!

http://www.stuff.co.nz/dominion-post/national/2987821/Save-the-planet-eat-a-dog

Victoria University professors Brenda and Robert Vale, architects who specialise in sustainable living, say pet owners should swap cats and dogs for creatures they can eat, such as chickens or rabbits, in their provocative new book Time to Eat the Dog: The real guide to sustainable living.

The couple have assessed the carbon emissions created by popular pets, taking into account the ingredients of pet food and the land needed to create them.

"If you have a German shepherd or similar-sized dog, for example, its impact every year is exactly the same as driving a large car around," Brenda Vale said.

"A lot of people worry about having SUVs but they don't worry about having Alsatians and what we are saying is, well, maybe you should be because the environmental impact ... is comparable."

In a study published in New Scientist, they calculated a medium dog eats 164 kilograms of meat and 95kg of cereals every year. It takes 43.3 square metres of land to produce 1kg of chicken a year. This means it takes 0.84 hectares to feed Fido.

They compared this with the footprint of a Toyota Land Cruiser, driven 10,000km a year, which uses 55.1 gigajoules (the energy used to build and fuel it). One hectare of land can produce 135 gigajoules a year, which means the vehicle's eco-footprint is 0.41ha – less than half of the dog's.

More at the above link.

Why is this photo troubling?

It may just be me or my low opinion of Chuckie ("The Pork") Schumer and Christine ("No Term Limits") Quinn, but I find the above photo disconcerting. Perhaps because one can file it under "Brazen Photo Op." But there was something disingenuous about the presence of two pols (Christine Quinn and Chuckie Schumer) who never seem to turn up at tenant meetings, but managed to show up to support affordable housing in Manhattan and get their pictures taken along with hardworking Councilman Dan Garodnick, Assemblyman Brian Kavanagh and that ever-lovable teddy bear of a man, State Senator Tom Duane.

Notice Chuckie looking straight into the camera ("Please don't miss me!") and his populist fist raised in the air. After the recent victory in Massachusetts of Scott Brown, populism has become the rage in politics, it seems.

Anyway.... I guess it's good all these guys and a gal turned up on this cold day to support Stuy Town and Peter Cooper Village. So kudos to them, despite the barbs. We will pay attention to what you really do for affordable housing in Manhattan.

Of course, it would have been a shock to see Mayor-for-Life Bloomberg present. Surprised Christine Quinn didn't send him an invite.

Speaking of Schumer, here's one of his best moments in the Senate:

Ivanka Trump to Manage Stuy Town and Peter Cooper Village

Stuy Town Reporter has received word through his sources that The Donald (Donald Trump) is set to buy Stuyvesant Town and Peter Cooper Village sometime in February. The deal is close to being signed and may even happen in the next few days, with the official announcement coming a week or two thereafter. Not only is the prospect of buying the mega property appealing to The Donald's ego and his appetite for grandeur and controversy, but he is fueled by a hitherto undisclosed rivalry with Jerry and Rob Speyer, who let go of management of the property this week after acquiring it, with heavy investment, in 2006 for 5.4 billion dollars. "Trump despises the Speyers," said one source, "and thinks he can turn around Stuyvesant Town and Peter Cooper Village and make the property profitable." The kicker is that Trump has said that he wants to place daughter Ivanka in the position of managing the complex. Speaking of Jerry Speyer's son, who was in charge of Stuy Town/Peter Cooper Village, Trump stated: "Rob did a lousy job with Stuyvesant Town, and Ivanka can do so much better. She's a good kid with great instincts and, of course, has a superb background to make this property a shinning beacon in the city--and the world."

Apparently Ivanka has already checked out the property and is eager to reinvent the current four Oval Essentials to Oval Salon, Oval Chocolate, Oval Fashion and Oval Jewelry. Our sources also tell us that chances are good that the entire complex will be renamed Trump Town, and that the far-sighted Donald is even considering building a lavish casino on the property should the city legalize gambling in the future.

Jerry and Rob Speyer - Don't Let the Door Hit Your Asses on the Way Out

http://dealbook.blogs.nytimes.com/2010/01/25/huge-housing-complex-in-ny-returned-to-creditors/

The owners of Stuyvesant Town and Peter Cooper Village, the iconic middle-class housing complexes overlooking the East River in Manhattan, have decided to turn over the properties to creditors, officials said Monday morning.

The decision by Tishman Speyer Properties and BlackRock Realty comes four years after the $5.4 billion purchase of the complexes’ 110 buildings and 11,227 apartments in what was the most expensive real estate deal of its kind in American history, Charles V. Bagli writes in The New York Times.

The surrender of the properties, first reported by The Wall Street Journal, ends a tortured real estate saga that saw the partnership make expensive improvements to the complex and then try to rent the apartments at higher market rates in a real estate boom. But a real estate downturn and the city’s strong rent protections hindered those efforts, leaving the buyers scrambling to make payments on loans due for the properties, which have been a comfortable harbor for the city’s middle class since they opened in the late 1940s.

“We have spent the last few weeks negotiating in good faith to restructure the debt and ownership of Stuyvesant Town/Peter Cooper Village,” said the statement by the partnership. “Over the last few days, however, it has become clear to us through this process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives.”

Metropolitan Life built the complexes for World War II veterans in the 1940s, when the city was in desperate need of new housing. It received tax breaks and other incentives in return for maintaining low rents. The buildings became home for generations of workers searching for an affordable spot in Manhattan.

But with the real estate market soaring in 2005, MetLife decided to sell. Tishman Speyer and BlackRock won an auction the following year.

This month, the partnership headed by Tishman Speyer defaulted on $3 billion in debt on the properties, and in the last few days secondary lenders have been calling to replace the partnership.

Under one scenario, Tishman would have been offered a long-term contract to operate the complex, but it rejected that plan. Lenders will now be looking for new managers for Stuyvesant Town, and its smaller adjacent property, Peter Cooper Village, where the rents are typically higher and the apartments more spacious.

The surrender of the property is a huge blow to Tishman Speyer, which controls Rockefeller Center and the Chrysler Building. When it spearheaded the Stuyvesant Town purchase, it projected itself as the best stewards of such an iconic property.

But instead Tishman Speyer and its partner BlackRock found themselves facing a mountain of debt. It had been negotiating since November to restructure $3 billion worth of loans and to hold on to the properties, which cover 80 acres east of First Avenue, from 14th Street to 23rd Street. But their reserves, once stuffed with $890 million for capital improvements, interest payments and renovations, were left virtually depleted.

The rents collected did not cover the mortgage payments, as the new owners failed in their efforts to increase net income by steadily renovating and deregulating vacant apartments while raising rents substantially.

For tenant advocates and urban planners, the sale underscored the loss of affordable housing in the city and the highly speculative financial structures that, they warned, would only end in disaster.

------------

And in another report, TS spokesman Bud Perrone finally has a comment!

Over the last few days it became clear the only viable alternative to bankruptcy would be to transfer to lenders control and operation of the 110 buildings and 11,000 apartments overlooking the East River, partnership spokesman Bud Perrone said.

"We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city," Perrone said in an e-mailed statement.

Yeah, thanks for thinking about us, Bud! About time!

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Speyers' booting makes main page on Fox News:

Financial Scandals to Be Revealed?

One wonders where all this is heading--if properly investigated. Lawsuits, heavy fines, jail time.... Perhaps we are just seeing this start to break apart:

Singapore's www.temasekreview.com, Damon Yeo:

Government Investment Corp (GIC)’s massive S$1 billion loss on their Stuyvesant Town investment is shrouded in much mystery. Before the news of a default broke out, very few outside of the GIC framework actually knew that our national sovereign wealth fund actually had an open position in this upmarket New York real estate. There was no mention of this investment in GIC’s annual report 2008/09 and if you search for “Stuyvesant” on GIC’s official website site, a nil search is returned.

More here.

Oh-Oh: Landlords and the State Legislature

The Plan, the Goal....

http://www.crainsnewyork.com/article/20100113/INS/100119958#

Albany urged to end multifamily mess

Only the Legislature can prevent years of legal limbo for landlords following the November court ruling against Tishman Speyer on Stuyvesant Town, say real estate attorneys and other experts. The court held that landlords of properties receiving J-51 tax abatements could not remove apartments in those buildings from rent regulation and lease them at market rates. But it did not say whether landlords who have been doing that since the early 1990s would have to refund past rent payments.

The ambiguity will lead to a rash of lawsuits, insiders say. Law firms are already courting clients with advertisements. “Ambulance chasers,” says Jerilyn Perine, a former city housing commissioner who now runs the Citizens Housing and Planning Council of New York, envisioning a legal free-for-all reminiscent of the lead paint and asbestos eras.

But it's not just lawyers. The state Division of Housing and Community Renewal is advising tenants who believe they may be affected by the ruling to file overcharge complaints with the agency. DHCR estimates that 40,000 units are affected; Perine guesses 30,000 to 35,000. Whatever the number, getting loans to renovate or buy the buildings involved is nearly impossible, because future rent rolls and owner liability are unknown. “Rather than leave this issue to be slugged out owner by owner, tenant by tenant, the Legislature should create some clarity about statute of limitations and rent overcharges,” says Perine.

The Legislature could allow landlords to give back their tax abatements retroactively so they would not have to reclassify market-rate apartments as rent-regulated and repay huge sums to “overcharged” tenants. The cash-strapped city could collect a cool $300 million, insiders say. To minimize protests from tenant groups, an exception could be made for tenants whose rent represents a significant portion of their income, as Senate Housing Committee Chairman Pedro Espada Jr. has suggested. The tenant lobby might still balk, but landlords would argue that market-rate renters are mostly well-off New Yorkers who freely signed leases and don't deserve six-figure payouts to reimburse them for rent they willingly paid.