In case you haven't received the Guterman letter, click on the pages below to read it.
I'm not a fan of any condo/co-op proposal, but it is interesting to see how people are already screwing each other in private, non-transparent deals that concern all of us residents. Let the fighting begin!
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Update 12/9/2011. The TA responds to the Guterman letter.
TA Comments on Guterman-Westwood Letter
Dear Neighbor:
This has been an exciting week for all of us as we begin to put together a bid to CW Capital to protect the long term stability and affordability of Stuyvesant Town and Peter Cooper Village. We feel confident that our partnership with Brookfield will give us the ability to deliver a plan that is both commercially viable and also satisfies our goals.
You may have received a letter recently from Guterman-Westwood Partners LLC describing an alternative partnership with tenants to bid for Stuyvesant Town and Peter Cooper Village. It is important that our community have the facts, and that is why I am sending this follow-up letter.
During this extensive process, we met with the representatives of Guterman-Westwood, as well as with dozens of other potential partners. After consulting with our advisors from Paul Weiss and Moelis & Company, we decided to select Brookfield Asset Management over all the others because they have both the credibility in the real estate market and the commitment and ability to live up to the principles and goals of the Tenants Association. Those goals are clear: to allow residents the choice to either purchase their apartment at an affordable price or to stay on as rent-stabilized tenants; to improve the maintenance and upkeep of our community; to prevent new development on open space, and to ensure that the middle-class character of Stuyvesant Town and Peter Cooper Village continues for the next generation.
There are some important facts about the Guterman-Westwood proposal that the T.A. and our Advisors find worrisome and that our community needs to consider.
1) Financial Commitment- Guterman-Westwood has outlined a “pricing plan” for tenants to purchase their apartments. We are concerned with the plan’s ability to raise the amount of capital needed to purchase the property from CW Capital. It is critical that any bid put forward by Tenants have the capability to engage CW Capital.
2) Short-Term Partner – When we began this process, the TA committed to finding a long-term partner to help our community buy the property – and then to stick around to help us improve it. Guterman-Westwood has made it clear that they would convert the property and have no continuing involvement
3) Converting to a co-op, instead of a condominium. Guterman-Westwood’s proposal calls for converting Stuyvesant Town-Peter Cooper Village into a cooperative. After careful review of this issue, we believe, along with our professional advisors, that a co-op conversion could present problems. For example, a co-op would mean a common tax lot and a master mortgage, increasing the chance of systemic financial distress that could impact every resident in the community. The risk of such financial headaches could make it difficult for residents to find lenders willing to help them buy their apartments during the conversion process. In addition, the costs of repaying a property-wide “master” mortgage would mean higher monthly maintenance charges for residents. A condominium conversion would avoid all of these challenges, allow for more flexibility when we choose our community’s governance structure, and allow us to target property tax abatements directly to rental or “affordable” apartments on a unit-by-unit basis.
We are now at the beginning of what will be a long process of listening to our neighbors, gathering feedback and input, and preparing to put forward a tenant-led bid that will put us in charge of the future of our community. I want to thank the volunteers of the Tenants Association whose work has been critical to our effort, and the thousands of Stuyvesant Town and Peter Cooper residents who have offered their support and ideas throughout this process.
I hope that you will continue to stay informed and involved as we move forward. For more information, please visit our website at www.ProtectSTPCV.org, or feel free to call us at (646) 403-9747.
Sincerely,
Alvin Doyle
The sharks are circling! They smell blood in the water!
ReplyDeleteGood for Guterman. We need to have some kind of competition and debate here. I personally don't care for the TA's "black box, don't ask any questions, we've done all of the due diligence, just sign here" approach to this whole situation. Not to mention their virtual abandonment of the affordability pledge.
ReplyDeleteHey, is it just me or was that Al Doily I saw doing a pirouette on the illegal ice rink last Sunday?!? I hear someone spotted him a free season pass...
No transparency, but this much is clear: Guterman Westwood Partners are major assholes.
ReplyDeleteThe amount of LONG-TERM AFFORDABILITY guaranteed by the Guterman proposal is ZERO, NONE, ZILCH.
IMO, the TA's proposal is lacking to say the least. But the TA was 100% right in rejecting Guterman Westwood as a partner.
For the record, I haven't received the letter yet (as of today's mail).
ReplyDeleteYou are fools if you think the TA has your best interest at heart. No one is going to give this place away for free, Not CW, not BIP not Gueterman. We need to be open minded to all and see who is offering the best deal for us. It's way to early in the game to choose which is the best way to go with this. There will be more players coming to bat. Lets notmake a deal in the first inning.
ReplyDeleteWe should not be pressured into making a deal right a way. I think we should all be open minded. The TA MUST allow any developer who wants to present a plan to us to do so in writting. If we find out that the TA is not doing so, then we need to vote the board out of office. If the TA rushes this through we will all be burnt.
ReplyDeleteDoes anyone know How do we remove the TA from power? How do we disqualify the cirrent board members.
ReplyDeleteThere needs to be total transparency in this process. Including all the TA minutes.
From the TA:
ReplyDelete"You may have received a letter recently from Guterman-Westwood Partners LLC describing an alternative partnership with tenants to bid for Stuyvesant Town and Peter Cooper Village. It is important that our community have the facts, and that is why I am sending this follow-up letter."
Shee-oot! If they really wanted us to have the facts, they wouldn't have tried to get this dirty deal done in secret without involving the people they are supposed to be representing. These guys have lost a lot of credibility and have left themselves open to a lot of well-deserved skepticism.
I completely agree from a legal and financial perspective with Al Doyle's letter. It's so much better than our current position and MUCH better than Guterman's half-baked, insincere proposal.
ReplyDeleteIf you don't want to buy your unit, don't. Stay as a RS renter. But I'm eager to see the offer anyway.
What Guterman is essentially proposing is to come in, flip all the apartments, make his fee, and leave. We don't need another big developer looking to fatten his wallet. We need a long-term partner who will help us buy the property and stick with us in the long-run to make improvements and ensure stability. From my read, that's what the TA is trying to achieve.
ReplyDeleteWhy is Guterman attacking the Tenants Association and Dan Garodnick? This letter smacks of a sore loser whose proposal was rejected on the merits. What is it about our community that attracts these hucksters with their get-rich-quick schemes?
The TA's decision to go condo, instead of coop, is the right one. A coop this large would be unsustainable, and if there were financial stress at the coop, it would effect every single resident. It would also be much harder for tenants to get home loans at good rates under a coop conversion.
"If you don't want to buy your unit, don't. Stay as a RS renter. But I'm eager to see the offer anyway."
ReplyDeleteI second that emotion! Just so long as they don't start putting pressure on the RS tenants who can't afford to buy. It's bad enough we're called all sorts of nasty names by the newbies who resent the fact that our rents are somewhat lower than theirs and cannot be arbitrarily raised like theirs' can.
I mentioned this in another thread, that the Guterman organization proposes to co-op only the RESIDENTIAL units, and keeps the commercial space and parking for themselves.
ReplyDeleteThere are probably thousands of parking spaces rented at over $400 a month, I'm guessing that the 7 garages could hold 3000 + spots which could equal 10 to 15 million a year in revenue to be used for operating expenses. This doesn't even include the commercial rents. If the property doesn't get income to pay the staff and maintain the grounds, then the shortfall will come from the tenants (owners) pockets.
I'm not saying this will happen, but people better keep their eyes open to hidden costs.
We will need to hire electrical, mechanical and structural engineers to go over each and every building before we bid or accept any offers of any type.
ReplyDeleteThe maintenance on these buildings have been neglected, riddled with band aide repairs performed by lowest bidding contractors.
The buildings seem to need to have the brick work repointed, to stop rain water from migrating into the inner infrastructure. Pluming including waste lines , and electrical risers will need to be thoroughly inspected. Without engineering reports, anyone who buys there apartment is playing Russian Roulette with their financial future. It’s the stuff you can’t see that always bites you in the end.
So, first things first. Engineering inspections! Only then can you talk price!
Anyone buying into this dump would be better off buying a piece of swamp in Florida.
ReplyDeleteAnonymous 5:45: At the meeting, I got the impression that Brookfield was planning to keep the commercial income, although the garages weren't mentioned. Whatever was said about that was glossed over very quickly without clarification. Maybe someone else got a different impression.
ReplyDelete" Whatever was said about that was glossed over very quickly without clarification."
ReplyDeleteThat is very much the MO of the TA.
“3) Converting to a co-op, instead of a condominium”….”a co-op would mean a common tax lot and a master mortgage, increasing the chance of systemic financial distress that could impact every resident in the community. The risk of such financial headaches could make it difficult for residents to find lenders willing to help them buy their apartments during the conversion process.”
ReplyDeleteA condo conversion would mean a much larger mortgage size for buyers—which also could make it difficult for residents to find lenders willing to help them buy their apartments during the conversion process. I’m not a fan of either of these proposals but I would be willing to bet that residents would more easily be able to qualify on a mortgage to buy a $250,000+ co-op than a $500,000+ condo. Not to mention that, if the prospective buyer has $50,000 to use as a down payment, that would be a 20% down payment on the co-op but only 10% on the condo—not enough to qualify you for favorable loan terms or maybe not even enough to qualify you for a mortgage of any kind in this environment.
If financing isn’t readily available to those even willing to buy, those units will revert to the sponsor so even long-time tenants that might be agreeable to take the plunge could well be disenfranchised. I’m sure this angle has not been lost on Brookfield—they get your unit at the “insider” price and you remain a tenant at their pleasure.
Haven't we been down this road before?
I doubt that the TA is holding back info and "glossing over" issues and not being transparrent in their decission making. Because if that WAS the case, I can see class action law suits against the TA and indivual civil law suits filed.
ReplyDeleteWe have been down this road before and according to my 80 year old neighbor, this "plan" has been attemtpted for DECADES.
ReplyDeleteDec-a-d-e-s
It didn't happen then for dozens of reasons and it s a slim chance to none it'll happen now. Relax Nellies.
Saying that the plan had been attempted for decades is simply inaccurate. There had been persistent rumors that MetLife was exploring the option of selling the complex, but it was never (in any form) presented to the residents, or even acknowledged by Met. So to say it was attempted is not true. It might have been considered, but not attempted.
ReplyDeleteWas attempted a few years ago. Outbid.
ReplyDeleteWas attempted before that. Check that.
No, you said was attempted for decades, that is not true, and DUH, we all know about the losing bid against TS.
ReplyDeleteI don't need to check it, I lived in ST for almost 60 years.
DUH?????? Really? REALLY? 60 years? sounds like your under the age of 10.
ReplyDeleteI think you meant "you're" rather than "your". Has anyone here completed high school?
ReplyDeletedude, they're typos. Get over it.
ReplyDeleteSo much misinformation here. The Guterman plan needs to be heard along with Brookfield and perhap 1 or 2 more credible plans. Important to realize...under any plan, as rental apartments are vacated, they will ALL be sold at market rates. Within 20 years this place will change...no stopping that. The TA has NOT formed a partnership with anyone. The TA Exec board has. The TA Exec Board and Garodnick are limiting communication & concentrating power & influence among themselves. This is wrong. They should be enabling communication & discussion and helping tenants to see where & how they can exercise power. Legally, 15% of the units here must indicate a willingness to buy for a plan to be accepted. Any plan that does not get 15% support will not move forward. It is in this voting to buy that the tenants have their only legal power.
ReplyDelete