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Friday, December 2, 2011
Power to the 99% or to the 1%: The Partnership Between the TA and Brookfield
Once again, the ST/PCV Tenants Association is trying to place a bid on acquiring Stuyvesant Town/Peter Cooper Village. This time, the TA has a partner: Brookfield Asset Management.
At the public press conference on Wednesday, November 30th, Councilman Dan Garodnick struck all the right notes: much was mentioned, and stressed, about a "non-eviction" plan and "the middle class" and "affordability." But is a deal that will require of tenants a six-figure number in mortgage loans, with maintenance fees that could equal or surpass their current rent, really affordable and a secure base for whatever middle class remains in Stuyvesant Town and Peter Cooper Village?
Let's admit from the outset that self-interest plays the most important role for everyone concerned--tenants, buyers, non-buyers, and asset management companies. While the arguments can be buttressed by lofty ideals about the middle class and apartment affordability, the bottom line is that everyone will be looking after their own interests when it comes to the sale of ST/PCV. If you are a ST/PCV resident with money to burn and believe that acquiring an apartment here at a low insider rate is good for you as an investment or for your family's future, you will be for the deal; if you are a tenant who cannot afford to pay for, or get a mortgage for, whatever the final asking price will be, or if you don't see any value in paying so much money when you are in a rent stabilized situation, then you will be against the deal. As for asset management companies...sorry, but I don't believe in the tooth fairy or beneficent benefactors. These companies want to make money, and the complex that's Stuy Town/Peter Cooper Village, stretching from 14 st to 23 st and 1st Ave to the FDR Drive, is, despite all the troubles and turmoil here, a huge prize that many are after, and NOT because they want to maintain rent stabilization and the middle class in Manhattan. At the Wednesday press conference, Barry Blattman, the senior managing partner of Brookfield, stated that ST/PCV is "the kind of real estate that our company covets." Thanks for warning us.
Brookfield's Barry Blattman
(I have to mention that I have no hardcore distrust of Brookfield, aside from my tempered cynicism regarding any real estate/asset management company being on the side of tenants. Barry Blattman seems like a nice guy and Garodnick believes that Brookfield's intentions toward tenants are "benevolent." I did a check of Brookfield's donations to NYC candidates for the past decade, and the company appears fairly reputable in who they give their money to. Note: They donated considerable money to Thompson in the last mayoral election and completely stiffed Bloomberg, though such a face-slap could be based on some personal/business clashes in the past.)
All this said, it would be petulant to dismiss outright whatever plan is still brewing amongst the key players here. According to the Town & Village, the TA and Brookfield share these goals: "a conversion plan that would allow tenants to remain on as stabilized renters if they choose and give those who wish to buy an attractive insider's price." Other goals: "maintain affordability and stability of the community with tenants free of harassment, keeping the open spaces open and improving maintenance and upkeep of the property." T&V adds, "To maintain stability, the plan includes keeping some of the apartments permanently affordable through funding from government sources." Remarkably, this latter point contradicts all the politico and TA speeches about the "middle class" and "affordability" and proves that the complex will NOT be affordable should the plan go through. Another source mentions a figure of 10% for the number of apartments being kept in affordable range. If that pathetically low percentage is true, and tenants accept the deal, then the death of the middle class and "affordability" will come to this complex much sooner than was ever anticipated.
Garodnick, Stringer, Quinn, Duane
A significant part of the plan involves Brookfield, a company that owns over 20 million square feet of property in Manhattan. According to T&V, Brookfield would be the sponsor of the plan, "putting together the money for the purchase, offering the units for sale, and then remaining the landlord and manager of the unsold apartments." At first and even second glance this arrangement means that Brookfield would be in charge, much like Tishman Speyer was in charge, but with the TA's blessings and some (?) input from a co-op/condo board should tenants win the right of apartment ownership.
For tenants wishing to make money, the TA and Garodnick are pushing for some type of cap on tenant owners flipping an apartment for considerable profit. While seemingly good for "affordability," such a stipulation will, no doubt, dampen the enthusiasm of some tenants who are already envisioning making a killing on the deal.
But right now, there is no detailed plan, just a vague template with several constructs ready to be argued over, filled in, amplified.
Center: TA's president, Al Doyle, talking with Brookfield's Barry Blattman
What concerns me most is that I see no way as to how "middle class" and "affordability" can be mentioned in the same breath with Stuyvesant Town and Peter Cooper Village if this still-brewing plan goes through. Whoever pays off 3 billion plus to the original senior lenders that CWCapital represents will be stuck with making up that 3 billion somehow, and I get the feeling that tenants and prospective tenants will be the ones ultimately footing the bill, while at the same time paying high maintenance costs on a property and buildings that are not deluxe or luxury living.
We also have to ask ourselves this question: Do we see, in the distant future, Stuyvesant Town and Peter Cooper Village as it is now? Do we see the same buildings standing here, the ones without central air-conditioning or heating, no doormen, fabricated ugly project-style after the Second World War? Or do we see something else: almost a mini-city of sleekly designed high-rises with doormen and the most contemporary modern conveniences? If the latter picture IS going to be the reality, then is it much better to start now and approach it in a straight line? Or are we going to approach this reality (if such it will be) in a zigzag line with continual squabbles, buy-ins, buy-outs, this management/that management, tempers flaring, blood pressures rising, and continual lack of certainty with tenants separated by rental status and potentially fighting each over a variety of monetary and maintenance issues? Ultimately, will everything that's here get replaced by eminent domain, either the genuine kind (upon which ST/PCV was built) or the more devious kind where the property or chunks of it will be bought out by monied interests who will, after offering tenants a sizable buyout, start knocking down the buildings one by one to erect a city of the future. (If we don't want to see this vision a reality, then the TA's efforts to have ST/PCV landmarked may not be such a mad Quixotic idea, after all.)
There is this thing called "progress" and Stuyvesant Town/Peter Cooper Village, in the judgement of some, may be standing in the way. But that other thing, "self-interest" is going be continually in the game, whether people want to admit it as the most vital component or not.
Read into these photos what you will:
(Thanks to NoSpinZone for the photos.)
DON'T FORGET THAT TOMORROW, SATURDAY, DEC. 3rd, the TA will hold an important meeting at Mason Hall, Baruch College, 23rd St. & Lexington Ave. at 1pm. Politicos and a Brookfield representative will be present! For more details visit www.stpcvta.org