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Thursday, July 3, 2014

The Lawsuits Start

This was expected.... The bloody battle begins. Who will survive? Who will win?

http://www.businessweek.com/news/2014-07-03/cwcapital-wachovia-bank-are-sued-by-stuyvesant-lenders

CWCapital Asset Management and Wells Fargo & Co. (WFC:US) were sued by lenders claiming they are being cheated out of hundreds of millions of dollars in the takeover of the Stuyvesant Town and Peter Cooper Village development in Manhattan.

CW, which has managed the 11,000-unit apartment complex on bondholders’ behalf since 2010, took title to the property June 3 by exercising a deed in lieu of foreclosure. CW canceled an auction and indicated it will put the complex up for sale.

CW and Wachovia engaged in “a continuing pattern of misconduct designed to keep CW in control” of the property and “reap an unjust windfall” of $1 billion that should go to lower-level lenders who have received nothing, according to the complaint filed today in New York State Supreme Court in Manhattan.


(Hat tip: Lo Rhent at STPC Tenants Facebook)

48 comments:

Anonymous said...

What goes around comes around.

Anonymous said...

Couldn't happen to "nicer" guys! MacArthur who runs STPCV for CW is one of the nastiest people I have ever had the misfortune of dealing with. Here's hoping for years of litigation and millions of dollars of legal fees

Hippo said...

Indeed couldn't have happened to "nicer" guys.
On the other hand, the years of litigation ahead further insures the decline of StuyTown so maybe it isn't such a good thing.
CW Cap now has all the more reason to try and suck out every last nickel from this place. Look for more NYU students, phony MCI's, dog sh*t galore, continued rape of the formerly beautiful and tranquil Oval, precipitous decline in services....you'll see. On that cheerful note I wish all a Happy 4th ( with the exception of Robbie Speyer who should rot ). And I send particularly warm greetings to STR who does such a great job. You are truly The Hero of StuyTown!

Stuy Town Reporter said...

Well, thank you, but I don't feel like a hero, that's for sure.

And a Happy 4th to you and everyone else (except the bad guys and we know who they are)....

Edmund Dunn said...

Happy 4th, STR. "I love you". Inside joke. :)

Anonymous said...

You are a hero and thank you from us also for doing this. No one else has the *alls.

Stuy Town Reporter said...

>>"I love you".<<

Well, I'm glad we got that out of the way!

Happy 4th, Edmund.

Anonymous said...

I hope that heads roll and butts get thrown in the slammer because CW has to be the most egregiously nose-thumbing entity when it comes to the laws of the City, State and the Land. They have been absolute despots and pirates in the way they have "run" PCVST. It's time that corporate evil was punished in the same way that murderers and rapists and bank robbers are punished because the people rape and kill communities and they rob communities of every vestige of dignity and autonomy. They are criminals in expensive suits. But then, so was John Gotti and his ilk.

Anonymous said...

If the place sells for more than 4B, there is no reason why the mezzanine holders should get some relief. I feel no pity for the primary debt holders. Particularly no pity for Freddie Mac & Fannie Mae. They made a bad investment. So...they can pay for their mistakes. The mere possibility of getting back their investment should be enough. Forget any interest they're owed. The mezzanine debt holders should get back their investments before anyone gets an interest payment.

Anonymous said...

No empathy for either party.
They all invested in the same Tishman scheme to destroy our community and lives. They were in "bed together" in a scheme to screw us. Now they are screwing each other.

Anonymous said...

The junior lenders helpfully point out that the place is only worth $3.5B. That figure is based on our current already over-inflated rent roll. The rent roll here will have to get further inflated to cover that extra $1B CW Crapital is demanding to cover all the fees and bullshit that any judge would throw the hell out of bankruptcy court. That's what these blood suckers are fighting over. Getting blood out of a stone money. More money out of us. If these Wall Street d-bags are trying to create an army of Travis Bickles here in STPCV, they're doing a bang-up job. Who the fuck are they looking at? Are they looking at me?

Anonymous said...

so i'm guessing the new leases will have only 1% increase s

market rate must be thrilled.

Please post back anyone who has a MR lease. It should be a small increase for all, FIRST TIME EVER. :)))

Anonymous said...

One more lawsuit to come. Possibly more. At least this ride will get plenty of press.

Anonymous said...

The filers of this law suit obviously haven't been attending any of the TA meetings. Had they, then they would be aware of the fact that any monies acquired above and beyond the primary mortgage "has no where to go".

Anonymous said...

@July 4, 2014 at 12:30 PM

I could be wrong, but my understanding is that the landlord will be allowed to increase the legal rent by 1%. My concern, as a MR tenant with a lower (and barely affordable, on our income) preferential rent is that the next rent increase will be up to the maximum legal rent. Which means we will have to move.

Please don't berate me for signing a MR lease. When my husband and I and our two children moved here in 2004, the MR rent was affordable for us. Should we have anticipated the huge increases? I don't think so. Especially when our first renewal lease increased the rent by $5. Yes, $5, or 500 cents. It was not until later that the rent went up astronomically.

Anonymous said...

9:07 From what I've read on the STR blog RS tenants are trying to help MR tenants too.
It seems you should get a Rent History on your apartment going back 10 years before you moved in, so from 1994 through present day. Review every increase and the calculations that removed your apartment from RS to MR. Our rent history has the names of the tenants who lived here so we can see when it went vacant.
See if that helps you too.

Anonymous said...

@9:07 AM: We RS tenants don't hold any grudge against MR tenants. We think you have been used and abused horrendously by these greedy, unscrupulous bastards who call themselves our "landlord."

If we have any gripe about any category of tenants, I think it is restricted to the unsupervised undergrad students who live in [illegally chopped-up] multi-occupant units. Our greedy landlord is to blame for this situation because these kids just don't belong here.

MR tenants who, for the most part, are respectable, responsible neighbors and an asset to the community, are being driven out by the ridiculous rents and outrageous increases. I hope you get a rent history of your apartment and manage to get your rent down to what it SHOULD be, as opposed to what it IS.

Anonymous said...

10:37 am What transpired from the history you got?

and to the other Poster?

how did it initially go up $5.00 and now so much higher? Confused!

Anonymous said...

10:37 am What transpired from the history you got?

and to the other Poster?

how did it initially go up $5.00 and now so much higher? Confused!

Anonymous said...

Doesn't matter what the rent is. hahhahahhah

we're getting another MCI , all of us, this year and another Spring 2015.

Sticky this.

Anonymous said...

@July 5, 2014 at 4:57 PM

That $5 increase was in 2005 -- a long time ago. We have had a number of renewal leases since then, some with very large increases.

Anonymous said...

How we got here
We need the courts to again tell them their "improvements" don't warrant the increases, are illegal (NYU dorms, Overcharged Reno work, etc) are shoddy (MCI intercoms, pavements), are an unacceptable scheme.

We need to take back our mostly rent-regulated community and restore our rent roll (which was perfectly profitable).

We needed the pols to implement regulations and laws at the onset of these "uncharted waters" instead of waiting until now, too late.

http://southofdub.blogspot.com/2010/01/aib-now-landlord-of-stuyvesant-town-in.html

Monday, January 25, 2010
AIB now landlord of Stuyvesant Town in New York

It's got to be one of the great ironies of the global property crash.
Allied Irish Bank, already hobbled with toxic debt from Irish property buyers, is now the partial landlord of some 25,000 people in 11,227 units in New York.
AIB is one of three banks which financed Tishman Speyer and Blackrock's $5.4bn acquisition of Stuyvesant Town and Peter Cooper Village, the historic 80-acre apartment complex on the Lower East Side, in what was the most expensive real estate deal EVER in America.
The 2006 purchase sparked near revolt by the mostly rent-controlled residents at the two complexes over Tishman Speyer and Blackrock's planned high-end rental flip.
TS&B planned on renovating the apartments and building new amenities like a gym and gardens and then raising the rents substantially beyond the reach of the city's workers who made their homes there.
It would gentrification, high-end style.
However, the developers - who are supposed to be some of the cleverest people in real estate - bought at the very top of the market and have never been able to finance their vision.
They spent the past two months scrambling for a deal to cover their $3bn debt.
To add salt to their over-extended wounds, New York's highest court told them their "improvements" so far weren't enough to warrant rent increases.
AIB and the other two banks sent a formal letter to TS&B a few weeks ago warning that they could be subject to foreclosure.
Such a foreclosure would be the second-largest default of a US commercial mortgage-backed security.
Monday, TS&B said they would turn over the properties to the AIB and the other two creditors.
Of course, this is now uncharted water for AIB and its shareholders.

Anonymous said...

11:59 you are so right. Tell me (us?) where to sign on and fight the fight. Tired of paying through the nose for crap, abuse and random increases.

Anonymous said...

Why are we paying MCIs for the pathways that Verizon chopped up and cobbled back together when they were digging the place up for their fucking FIOS?

Anonymous said...

No one argues nor fights the bogus Mci additions to our rent. THATS WHY.

Anonymous said...

"However, the developers - who are supposed to be some of the cleverest people in real estate - bought at the very top of the market and have never been able to finance their vision."

Unbridled greed, avarice and ruthlessness tend to shrink the brain cells. I don't think Rob Speyer had too many to start with. His major asset was having a billionaire daddy with defective sperm.

Anonymous said...

11:59 says it all. What a failure.

"the second-largest default of a US commercial mortgage-backed security"

Anonymous said...

What if Brookfield decides to manage ST-PCV operations from its existing office space?

This large, brand new, hi-tech commercial space could be leased out to generate tremendous rent income.

Anonymous said...

3:42 good point. They built an office building on PCVST property that could be leased out. Is it true the office building was zoned "business"? I understand why residents fought hard against it.

Anonymous said...

3:42 what if it is as you say and the new office building is leased out to NYU for offices for managing their 3500 dorms? don't you think the new offices are for NYU as much as for Fortress CW?

Anonymous said...

Honestly, the person who keeps posting about NYU's hundreds/thousands of apartments here is getting super annoying.

Yes, there are far too many students in Stuy Town. I'd prefer there be none at all. But only a small number of apartments are rented directly to NYU, and from what I've heard, the NYU grad students in those apartments are pleasant and respectful neighbors.

The problem is that Compass Rock leases directly to students, and I believe they come from a number of schools - NYU, SVA, the New School. NYU is evil, but we can't blame them for this one, and to continue harping on their alleged back-room deals with the City Council is a distraction from the real issues.

So, no, I doubt that NYU will ever use new management office space (another of your favorite bugaboos) to manage their thousands of apartments in stuy town.

Anonymous said...

Of course this is why we oppose the oval amenities, gym, cafe and all. It's not due to tenants disliking coffee, the problem is that the leasing out of our property to businesses, paves the way for leasing out of private property (ours) to any and all business. It won't be coffee or oval study, will be a cvs, a Rite Aid, CMB, Citibank. possibly larger entities. Mark my words, this is coming.

Anonymous said...

Itda. There are more students every day here. It's not only NYU students.

Anonymous said...

Do we know how much of the property is now MR?

Do we know the rent roll monthly now? I do not think the rent roll puts the LL in the negative territory. I firmly believe they are in very NON red area.

Anonymous said...

Well 11:54 after they commented on the number of NYU student housing we checked DOB and over 3500 apartments have wall partitions. Its true.

Anonymous said...

It's pretty clear that management wants to force out the MR tenants, not the RS older lease tenants. They continually raise the MR mid lease, tack on a/c charges now, MCI which are non negotiable and refuse to negotiate with MR tenants @ the 2% to even 4% increase. Our rent is 3543 and the renewal is an additional $250 per month. Other same units are advertised at $3300 and less, yet CR will not budge on the $250. THEY don't want MR tenants to renew. Obviously the leases are not the same (unfair) as the older RS leases.

Anonymous said...

Who renovates apts in ST-PCV? Management hires union contractors for show who hire non-union workers to do the actual work. Know this for a fact. And they are "upgrading" with IKEA grade crap materials and no-name appliances. Know this for a fact too.

Anonymous said...

The lawsuit names CW plus dozens of other defendants along with CW. Anyone know who all the defendants are?

Anonymous said...

Total rip-off! I feel sorry for market eaters who are duped by this SHIT!

Anonymous said...

over 3500 apartments have wall partitions. Its true.

That doesn't mean they are all students, I would bet most are young working professionals.

Anonymous said...

Other tenants who use wall partitions are families with two or more kids. With two kids in a regular two-bedroom apartment, the partition lets each kid have his or her own bedroom.

Anonymous said...

well if it weren't for the mark renters, we'd all be living with frat students. Our entire floor was once families. now it is hubby and me on our floor with 20 loud drunken 20 somethings having weekend beer bashes.

Anonymous said...

Actually the NYU wall partitions started in 2010 through 2014 and are over 3500 of them. These are not for families with kids or young working professionals. These are specifically for NYU.

Anonymous said...

@July 9, 2014 at 4:17 PM, who said "Actually the NYU wall partitions started in 2010 through 2014 and are over 3500 of them. These are not for families with kids or young working professionals. These are specifically for NYU."

Can you provide any evidence supporting that statement?

Anonymous said...

12:06 Why do you ask for that? Trying to cover it up? 4:17 seems to make a legitimate point.

Anonymous said...

@7:34 PM

Seriously?? How is asking for evidence a way to cover something up? If 4:17 can link to evidence to support his or her factual statement, wouldn't that be the opposite of covering it up?

The role of NYU in Stuvesant Town is a serious topic. It does not help when people throw out numbers without being able to support their statements. But if 4:17 can support the numbers in the post, that would be a valuable contribution to this discussion. I look forward to seeing what 4:17 has in the way of evidence supporting the numbers he or she cites.

Anonymous said...

9:47 I can see how asking someone to reveal evidence on a blog to the general population and the offenders is an attempt to help those who are trying to cover it up. Evidence has to be revealed at the right time, in the best way to make the most impact on the case. Anyone who wants to see what has been made public can go to the respective sites to see the permits or to other resources to get whatever information they need to believe the facts. Yes, there are over 3500 student apartments chopped up for 4-5-6 unrelated occupants.

Anonymous said...

@9:27 "Evidence has to be revealed at the right time, in the best way to make the most impact on the case."

I'm sorry, but in this context, that statement is nonsense. There either are or there are not 3,500 NYU student apartments, and you can either substantiate those numbers or you can't. There is nothing strategic about it.

"Yes, there are over 3500 student apartments chopped up for 4-5-6 unrelated occupants."

Fine, whatever you say.