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!
Update 12/9/2011. The TA responds to the Guterman letter.
TA Comments on Guterman-Westwood Letter
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.