Sunday, January 31, 2010
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:
Saturday, January 30, 2010
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.
Monday, January 25, 2010
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!
Speyers' booting makes main page on Fox News:
Thursday, January 14, 2010
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.
Wednesday, January 13, 2010
The Plan, the Goal....
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.
Above: Stuyvesant Town tenant thawing out after another cold night in his ST apartment.
As we are in one of the coldest winter cycles we have seen, we must note how much "attentiveness" and care our landlord Tishman Speyer is giving us during this freeze. Just within the temperature levels allowed by law. Thank you, Jerry and Rob, once again!
Friday, January 8, 2010
Today, Friday, according to the NY Times:
"The owners of Stuyvesant Town and Peter Cooper Village, the sprawling sister complexes overlooking the East River in Manhattan, will miss a $16 million loan payment on Friday, which would put them in technical default on their mortgages, and the 20,000 residents in limbo."
Why do I think this is just a ploy by Tishman Speyer to get a government bailout here. Watch Bloomberg.
From the Tenants Association:
The news that Tishman Speyer has defaulted on the $16 million mortgage payment due today, January 8th, is the sad, but inevitable result, of a predatory and speculative business plan designed to drive out long term tenants of a stable, middle-class community. The default is the first step in what will likely be a long legal process.
Stuyvesant Town and Peter Cooper Village tenants are understandably concerned about what this means for the community. Based on the information that is available to your Tenants Association, we believe that little, if anything, will change in the immediate future. Rent should still be paid in the same way it always has been paid. You should direct service and maintenance requests to the same telephone numbers or through the same web site as you have in the past.
However, we urge all tenants to join us in increasing vigilance with respect to maintenance and service and to report any gaps or lapses to us at our Message Center 1-(866)-290-9036) or through our website contact form <http://www.stpcvta.org/contact.htm>.
As always, the Tenants Association will work closely with our elected representatives to ensure that CW Capital, the special servicer to whom control is now transferred, maintains services and the condition of the property.
The legal processes that begin today may also present opportunities for the tenants of this community. The Tenants Association, in concert with Council Member Dan Garodnick, Assembly Member Brian Kavanagh, State Senator Tom Duane and Borough President Scott Stringer – will ensure that the residents of this community have a seat at the table and that their voices are heard - loud and clear – in determining the future of our community.
Linked here is the letter sent to tenants on Wednesday by Council Member Garodnick. It has even more significance now that default is a reality.
Al Doyle, President
Stuyvesant Town - Peter Cooper Village Tenants Association
Monday, January 4, 2010
Well, well, well. So Tishman Speyer has offered a select group of current rent stabilized tenants the opportunity to acquire apartments that are well below market rate. Meaning, even the old pre-J51 lawsuit RS tenants can get in on a "deal" that may look financially advantageous.
Not so fast, says the Tenants Association:
ALERT: There’s a Catch to the 100 Vacant Apartments Offer
The Catch for Traditional Rent-Stabilized Tenants
Tishman Speyer ("TS") recently announced that it will begin leasing approximately 100 vacant apartments to those who asked to be placed on a waiting list following the Court of Appeals decision in the J-51 case. Each of these 100 apartments is rent stabilized only until the expiration of the J-51 abatement period. Tenants who receive an offer and are tempted to accept should carefully consider the consequences, even though some of these 100 apartments will be offered at substantially below market rate.
A tenant whose apartment was stabilized prior to the recent J-51 court decision and who accepts an offer for one of these 100 apartments will be moving from a fully protected traditional rent-stabilized apartment into one whose rent-stabilized status will expire at the end of the term of the J-51 tax benefit period.
The Catch for Tenants Newly Rent-Stabilized, Formerly Market Rate
Those tenants who held market rate leases prior to the Court decision should also carefully consider the consequences of accepting an offer for one of the 100 apartments. Pursuant to J-51 regulations, the lease for an apartment that is rent stabilized as a result of the landlord having a J-51 abatement will remain rent stabilized for the life of the current tenancy unless the lease contains a J-51 clause. The J-51 clause is language required by the J-51 regulations that specifically advises the tenant that the apartment is rent stabilized pursuant to J-51 and that, upon expiration of the J-51 benefit period, it will return to market rate status.
Many current market rate leases do not contain the required language. An open legal issue in the J-51 litigation is whether the landlord can "cure" this defect by adding the required language to the lease. Your Tenants Association believes that the law does not allow the landlord to correct this defect. If the Courts agree with this position, the rent stabilized status of a formerly market rate-tenant whose current lease does not contain the J-51 clause, will be protected should the landlord seek to return that apartment to market rate when the J-51 period expires. If you accept one of the 100 apartments, which will surely contain the necessary clause in the lease, you will forfeit that privilege.
So, what'd you think? Jerry and Rob Speyer were Santa Claus this year?