Watch live streaming video from stpcv at livestream.com
Part 1; other parts available here.
Just listening to several minutes of answers makes me depressed. If this plan is accepted, that's it for the struggling middle class and certainly "affordability." I think there is no way to look at this plan otherwise. And, yes, for those who wish to make money off their STPCV apartments by flipping them at good profit, you will be able to do so, except you'll pay some extra tax on the deal. Really, this is a plan for STPCV residents who have money or who want to make money. That's the reality. This is surrender on permanent rent stabilization and the affordable rental unit in Manhattan.
I guess the good news is that it may take years for this plan, if it's accepted by the required amount of tenants and by CWCapital, to be activated. So we wait. And worry.
25 comments:
Interesting tidbit for those thinking about buying in:
The 2010 Year End "Debt Service Cover Ratio" for PCVST is 0.63x.
What does that mean?
Rents covered 63% of the debt service obligations for the underlying $3 billion mortgage.
And that's inclusive of NONE of the cost of running the community. And there is a major payroll, utility bills, maintenance costs for the buildings, reserve costs, insurance, taxes, and god knows what else (circuses, somebody will say).
The underlying mortgage holders have to be bleeding to death on this one. A further default could happen, but there's probably only 40 cents on the dollar.
Why would we bit more than $2 billion for the place, again?
http://www.marketwatch.com/story/fitch-competing-bids-for-stuy-town-show-improved-sentiment-2011-12-06
I see this whole thing as more of a positive. If tenants are not in control of this community, it's just going to stay owned by CW, or another CW, or another Tishman, or any other company who's sole purpose is to make money. And rightly so. And tenants will always suffer in one way or another under that scenario. The middle class, affordable housing, rent stabilization, etc. - over the long-term it's all going away and not coming back. (2BR apts in PCV are renting for 5K now - in this sense, it's already gone). At least by taking ownership of the complex, tenants can have more control over the way this complex is run, - and have tenants' best interest in mind. And anyone who doesn't want to buy doesn't have to. It's a change, and change is always tough, but I feel like it's a good and necessary change.
"The middle class, affordable housing, rent stabilization, etc. - over the long-term it's all going away and not coming back."
With that attitude, we certainly will lose.
Anon at 9:50am is incorrect. DSCR is a calculation of net operating income divided by debt service payments. NOI is gross income less operating expense (OpEx is included in the calculation).
The fact, still, is that after debt service the complex is in negative cash flow.Typical loans for this type of asset should be about 1.25 - 1.30x DCSR.
I hope this helps.
The Unity Pledge that most of us signed last year says that long-term affordability is our first priority.
And the TA website lists as Number 1 among the "Tenant Goals for Restructuring:
1. Long-term Affordability
We welcome scenarios which create long-term affordability on the property, either through a model of home ownership and/or permanent rent protections."
I think it's incumbent upon the TA and our elected officials to answer this question:
Where is the "LONG-TERM AFFORDABILITY" in taking THOUSANDS (most???) of ST-PCV apartments out of Rent Stabilization and converting them to unrestricted, market rate condo/coop apartments?
I was a volunteer usher at the TA meeting, and I personally delivered my card with this question to the stage. But it was not one of the questions the TA chose to answer.
RE: STR:
"The middle class, affordable housing, rent stabilization, etc. - over the long-term it's all going away and not coming back."
With that attitude, we certainly will lose.
That sentence was probably too generalized. What I meant was, "affordability" here at PCVST is on it's way out, and not coming back. 2BRs at PC and ST are going for 5K and 4K, respectively. Those numbers aren't going down, and if they do, they won't be significant drops. It's not a bad or negative attitude. It's just reality.
If and when a bid is offered and accepted, I'll be first in line to buy if the numbers make sense. And I'll be just as happy and understanding for those that do not wish to buy.
>>Where is the "LONG-TERM AFFORDABILITY" in taking THOUSANDS (most???) of ST-PCV apartments out of Rent Stabilization and converting them to unrestricted, market rate condo/coop apartments?<<
From what I'm getting, the TA has now severely curtailed this goal. "Some" apartments may be retained as permanently affordable. But, yes, it's a question that the TA has to answer, without spin or speedy avoidance.
The TA is very good at fighting MCIs and diminution of service issues. I hope they continue to do that and not get totally sidetracked by the thirst for ownership.
The rents cover 63% of the debt yet hundreds (yes?) of apartments are empty and YET the price on them is not lowered.
?
At each and every renewal of market tenants, they increase rents substantially. Leaving more apartments empty for how long? Not to mention the costs landlord spends to re-paint, clean, re-do floors.
?
"The 2010 Year End "Debt Service Cover Ratio" for PCVST is 0.63x."
FWIW, I think those figures included payments on the mezzanine notes in addition to the first mortgage. TS was paying them for most, if not all, of 2010. While there was a smaller balance on the mezz notes, the rates were higher so I think the 0.63x figure may be misleading.
Doesn't mean that we should pay $3 billion for this place--or anything at all, for that matter.
Perhaps I'm missing something, but from what I've read and heard the TA HAS addressed long term affordability. They've addressed it through the proposal to have two tiers of offering prices for units: one with a discount to market with unrestricted sale and one with a deeper discount with restrictions (long term affordability). The unsold units are to be run by a non-profit I believe and to remain under rent stabilization laws. If what people are referring to is simply the removal of rent stabilized housing stock from the market well this is true, but rent stabilization itself assures ultimate unaffordability.
For the record, I too yearn for the halcyon days of Met Life, when it was quiet here and neighbors respected one another. When there were no dogs yelping day and night and defecating and urinating all over the property. When I didn't have to smell marijuana smoke drifting through the halls etc., etc. Well it's over, and the best chance we have, I believe, is through what the TA is trying to get done. It certainly seems to me to be the most egalitarian option we have.
@11:23 AM: Well said. You've given me hope. As a RS renter who cannot afford to buy, the TA plan seems like a much better prospect for people like than more and more disgusting, POS landlords like Tishman Speyer and the current whoevertheyares.
"The unsold units are to be run by a non-profit I believe and to remain under rent stabilization laws."
This was addressed at the Q & A portion of the TA meeting. Brookfield will own those units and will be able to sell them. One assumes, based on everything else (including legal protections), that rent-stabilized tenants will still be able to live in their apartments.
From T&V:
"Brookfield, meanwhile, would be allowed to sell apartments even if they're occupied by renters, according to Kane [attorney Meredith Kane, who was answering many questions for the TA]. Of all the comments made on the stage...this one got the most murmurs from the audience."
"Brookfield, meanwhile, would be allowed to sell apartments even if they're occupied by renters"
So if I opt out of buying and I want to remain a RS tenant, then I guess I’m obligated to have my apartment ”available” for inspection by perspective buyers. How lovely.
So if I opt out of buying and I want to remain a RS tenant, then I guess I’m obligated to have my apartment ”available” for inspection by perspective buyers. How lovely.
THAT alone will make me vote against the plan! BTW, it's "prospective" buyers. (I used to teach English and just can't help myself!) ;-)
You guys need to read up on plain old New York State conversion law. It sure would save a lot of time. Rent-stabilized tenants in a conversion have no obligation to buy, and their apartments can be sold to investors. The buyers of those apartments do NOT come in and inspect them. Why make stuff up when you could get some facts?
This URL is very slick, Brookfield is the "man behind the curtain" here, not the TA.
http://www.protectstpcv.org/
@poster at 3:34 pm: Thank you for the information. Please remember that most of us have never had to look into these matters before and don't even know where to look. The TA isn't exactly forthcoming with answers to sensitive questions. The TA only tells us what they want us to hear and do not want to go into any details. Remember, they stonewalled a lot of questions at the meeting last Saturday.
"The buyers of those apartments do NOT come in and inspect them."
@Anony 3.34 PM-are you 100% sure on that? Why would any "prospective" (thanks for the correction Anony 2.25 PM) buyer buy sight unseen? The only example I can think of right now is Tudor City, was that that the MO for that conversion sale? Just asking.
By the way:
"Diana Taylor is perhaps most famous as the arm candy of New York City's top plutocrat Mayor Mike Bloomberg. She is however, an accomplished woman of her own means, and was on the GOP's short list to challenge new Democratic Senator Kirsten Gillibrand for her seat in 2010. She also sits on a handful of corporate boards, including Brookfield Properties, the real estate holding company that owns the land Zuccotti Park was built upon. Another seat she fills is on the prestigious Sotheby's Art Auction house board. Sotheby's is currently in midst of a four-month lock out over union contract disputes with their art handler's union. Art handlers do the work of physically moving the art around and ensuring the art is kept safe. At issue? Sotheby's wants workers to give up their 401ks. Local 814 President Jason Ide also tells the New York"
http://www.dailykos.com/story/2011/12/10/1043964/-Mayor-Bloombergs-girlfriend-has-a-Let them-eat-sh*t-moment?via=blog_1
This blog would improve hugely if the commenting population had the slightest clue about the topics. Buyers of unsold shares (which is how occupied apartments are known) only buy on one piece of data: the age of the rent-stabilized tenant. They do not care at all about the interior. What would an inspection possibly reveal? The entire apartment will be gut renovated anyway. What are they so interested in.....your wallpaper?
Older RS tenants should make sure to get a young relative on the lease to make your apartment less desirable to some prospective buyer.
All coop and condo conversions have to be approved by the state attorney general. Here's a link for the handbook on that site: http://www.ag.ny.gov/publications/COOP%20CONDO%20Conversion%20Handbook%202-13-08.pdf
You can't just "add a younger relative" to your lease. They have to actually live with you, and they need to be in a defined group of relationships (as in children or grandchildren). But you all might be living together for decades. Are you ready for that?
Post a Comment