What Apartments Go For In ST/PCV

http://streeteasy.com/building/stuyvesant-town

CompassRock uses StreetEasy.com to push ST/PCV apartments. You'll see a listing at the link above.

BTW, do we have "live-in" supers?

From TA: Friday, June 13: What We Know… What We Don’t Know… What We’re Doing About It

http://www.stpcvta.org/ta/post/update-stuyvesant-town-peter-cooper-village-foreclosure

We’ve known it was coming eventually—another sale of Stuyvesant Town and Peter Cooper Village.

The Tenants Association has been working diligently for years to try to preempt this process. We have approached CWCapital with our partner, Brookfield, and repeatedly offered them an opportunity to partner with the tenants—and make their bondholders whole in the process. That, of course, is what a special servicer should be looking for.

Rather than engage and allow us access to the necessary information to finalize our offer, CWCapital made excuses while collecting hundreds of thousands of management fees every single month and accruing $90 million in default interest every year.

Now, on Friday, June 13, 2014, CW, as special servicer to the CMBS (commercial mortgage-backed securities) trusts, will foreclose on the remaining junior debt and become the owner, at least for now. They even might turn the property over to their parent company, Fortress Investment Group—and you can bet Fortress has no interest in the long-term affordability of this community.

But even though CW has tried to shut us out so far, the Tenants Association is actively pursuing all possible angles to strengthen the hand of residents during the process of foreclosure and sale. And if appropriate, we will continue to pursue our own bid.

Here’s what we know, what we don’t know, and what we are doing about it.

What We Know

1.  CW will attempt to foreclose the junior debt on June 13 and, at least temporarily, become the owner.
2.  A number of interested real estate entities have emerged as potential buyers, but in order for them to walk away as the owner on June 13, they would have to pay off the entire first mortgage (plus fees, interest, advances, etc.) within ten days. Once you add it all together, it comes to around $4.7 billion—precisely the amount that Fortress is reportedly interested in bidding.
3.  Fortress itself would likely need to come up with $4.7 billion within ten days of June 13 in order to become the owner. That is a lot of money for any potential bidder, and it is generally expected that this process will take longer.
4.  CWCapital is expected to transfer the property and not hold it themselves—but they have not disclosed the precise process that they will employ.
5.  Our homes are protected by rent stabilization, and that will not change unless the law is not renewed in June 2015. For Roberts residents, their units are covered until the J-51 tax abatement expires in 2020. We have seen no bidder other than the Tenants Association that has any plans to protect the long-term affordability of this community. Most have been determined to turn rent-stabilized units to the market quickly.
6.  This transaction is important to the City of New York, and Mayor Bill de Blasio is actively engaged in exploring ways to aid our cause.

What We Don’t Know

1.  Whether CWCapital will be compelled to sell ST/PCV to its parent company, or whether they will conduct a full auction process.
2.  Whether another lender will try to upend or stall the process set in motion by the foreclosure.
3.  Whether Fortress or any other interested buyer will try to raze buildings and/or develop our valued open spaces.
4.  Whether CWCapital will continue to shut the tenants out of this process.
5.  How or whether the City will intervene in this process.

What We’re Doing About It

1.  We are prepared to make a formal bid in an auction, if we believe it can be competitive while still achieving our goals of protecting the long-term affordability of this community.
2.  We have engaged with Mayor de Blasio, Deputy Mayor Alicia Glen, and Commissioner of Housing Preservation and Development Vicki Been and asked for their support.
3.  We have briefed New York State Attorney General Eric Schneiderman on our situation and shared our concerns.
4.  Our councilman, Dan Garodnick, has formed a citywide coalition to fight predatory equity in housing to help add weight to our battle. Fifty elected officials, including five members of Congress—among them our own congresswoman, Carolyn Maloney—have joined.
5.  State Senator Brad Hoylman, Assemblyman Brian Kavanagh, and Councilman Garodnick are working on an emergency package of legislation to be introduced at both the city and state level to help protect the long-term stability of communities such as ours.
6.  We are preparing to be loud in defense of the interests of the residents of this community. We have organized a tenant rally at City Hall at 10:00 a.m. on June 13—the date of the scheduled foreclosure—to make clear to CW and Fortress and other potential bidders that we deserve a seat at the table. If you want ST/PCV to stay as a place where we can all afford to live, be there with us on June 13.

Ultimately, we can control only what we can control. But we can continue to make sure our voices are heard and try in a thoughtful, aggressive, substantive way to affect what happens when CW forecloses—not just for ourselves but for those who aspire to live here in the future.

Anyone who plans to bid on the property needs to know: we’re here, we’re committed, and we’re not going away.

RSVP to tell us you’re coming and, if needed, to reserve a seat on the bus to and from the rally at stpcvta.org/june13 (you will get a confirmation). Or contact us by phone at (866) 290-9036. The bus can accommodate walkers, rollators, and baby strollers.

Buses leave from 19th Street and First Avenue at 8:45 a.m. SHARP. Estimated return time is 11:00–11:30 a.m.
You may also reach City Hall by public transportation.
Subway: Take the 4, 5, or 6 Lexington subway to Brooklyn Bridge/City Hall, or take the R train to City Hall.
Bus: Take the M103 on Third Avenue to City Hall/Park Row, or from Peter Cooper Village at 23rd Street and First Avenue, take the M9 to City Hall/Park Row (takes longer than the M103).

Guterman Responds to "TA Comments on Guterman-Westwood Letter"

STR: Referenced in a posting on the TA Facebook page, May 31, 2014:

http://www.stpcvta.org/ta/post/ta_comments_on_guterman_westwood_letter

Guterman response below.

Today, a blog was posted by AJ Miller, on the Facebook/Stuyvesant Town Tenant Association pages. AJ Miller innocently presented a previous posting (2011) by the Tenant Association (I am advised), on their own web-site and I believe, the local newspaper known as Town & Village.

The letter was not sent to me. There has been no attempt to contact me.

I would like to remind all the readers, that posting on their own web-site or even in Town &Village, does not constitute a reply to the letters and memorandums I sent to the Association and their representatives.

Certainly, any group (Stuyvesant Town Peter Cooper Tenant Association) without a hidden agenda, and considering our in-depth knowledge and experience over forty-four years, as successful real estate investors and thirty five years as principals in successful condominium and cooperative conversions, would have long ago acknowledged my many attempts to discuss the reasons, for our choice to convert the property to cooperative ownership.

The information in the TA's 2011 post, was simply inaccurate and based on inexperience and a lack of expertise in New York conversions and with cooperative housing in particular. I would also like to mention, that the accuracy of the advice and the expertise and experience of the TA advisors, is what should be worrisome to the TA Board and to the residents of the community as a whole.

While I don't want to comment at this time on our firm's reasons for selecting a cooperative form of ownership, I can tell you that the decision was based on our own personal and direct knowledge gained from the many thousands of New York City apartments that we converted to cooperative and condominium ownership.

Just to be absolutely clear, we are sincerely interested in the ownership and conversion of Stuyvesant Town/Peter Cooper Village and are willing to have a debate about the strengths of our reasoning as  compared to a condominium conversion plan. I will be happy to sit in an auditorium with a Brookfield real estate officer and with an experienced cooperative and condominium real estate partner, from both Paul Weiss et al and Moelis & Company.

Gerald Guterman

Memorandum from Guterman Copied to Firm Representing the Tenants Association

Guterman Partners LLC

M E M O R A N D U M

To:  Daniel Alpert, Jon Messersmith

        Guterman-Westwood Partners LLC

Copy:  Meredith Kane, Paul Weiss et al, 

             William Derrough, Moelis & Co

From:  Gerald Guterman

             Guterman Partners LLC

Date:  September 28, 2011 to October 31, 2011

Re:  Stuyvesant Town – Peter Cooper Village

As we discussed earlier in the week, the article in the New York Post on the trashing of Stuyvesant Town - Peter Cooper Village (“STPCV”) confirms our company’s conclusions (as a prospective purchaser of STPCV) concerning the physical maintenance of the project, as well as management’s current and ongoing rental policies. Our conclusions are the result of direct and personal on-site inspections and visits to the rental office, including interactions with rental agents at STPCV.

In short, we believe that Fortress Investment Group ("Fortress") through its subsidiary CWCapital Asset Management ("CW") and thereafter Rose Associates ("Rose") its property management agent, is managing the project to maximize the vacancy available to a subsequent acquirer and to spin up rent levels on vacant renovated apartments to market levels as quickly as possible following the “re-stabilization” of the previously deregulated units as a result of the Roberts v. Tishman Speyer Properties L.P. decision  It appears that they are aggressively screening for short term tenancies – with a focus on the multi-occupant student population that tend to take one year leases for apartments that Rose is evidently subdividing with additional partitions, to increase the number of occupants (as it is easier to maximize gross with multiple occupants sharing in higher rents). Management appears to be actively discouraging other leasing.

While it is in Fortress/CW’s and, as a potential purchaser, our own interest to have the project come closest to the 10% maximum vacancy at the point of a conversion to condominium or cooperaive, there are legitimate concerns that the leasing practices at the project are  discriminatory and, as the Post article points out, are disturbing the community and upsetting tenants who we hope will ultimately become buyers of the apartments after we undertake our acquisition and condo/co-op conversion plans.  Furthermore, there is the question of whether or not Fortress/CW is instructing Rose to "park” apartments with student tenants, in a way that might be deemed by the Attorney General’s office to go beyond the spirit of the regulations governing maximum vacancy, or that the aggressive spinning of turnovers – and the multi-occupant issue as a way of pumping the rent roll – might be successfully challenged, as was Tishman-Speyer’s illegal destabilization activity, and further taint the project.

Our Investigation

I was curious as to whether the information I was hearing from my people and others was in fact the case, so I went down to the property leasing office myself.  Appearing as a prospective tenant who is quite obviously not a student, I attempted to rent an apartment in a normal and usual manner. This is an action I undertake for all properties in which we have a sincere acquisition interest.

It should be noted here, that this summary is not about age specific discrimination. My experience in the rental office is included as background only, to illustrate a personal view of one portion of this demographic change as it is currently taking place.  

I was dressed in slacks and a golf shirt and went directly to the rental office as an applicant. I had not made any advanced appointments and did not personally know any of the rental agents in the office. The rental agents told me that an advanced appointment must be made. I was told to call in approximately two weeks and make an appointment with any rental agent who answers the phone.

There were approximately six to eight rental agents in the office at the time of my visit. There were about two dozen people who appeared to prospective tenants. The average age of the prospective tenants appeared to be about eighteen to twenty-four years old. There appeared to be about three or four individuals together for each apartment and I over-heard the mention of a referral from the NYU student housing center, as a topic of conversation.

From our ongoing physical inspections of the property (by onsite tours), as well as my experiences with the rental agents at the onsite rental office, we are convinced that the concerns we laid out herein are legitimate and we should pay attention to what is going on.  

Condition of Apartments and Project

I am also particularly concerned that the assumptions we have made with regard to the condition of the renovated apartments (in terms of the ultimate sales value thereof), may prove challenged by the high-turnover, student tenancies that Rose (as management and rental agent) is pursuing.

On a broader level, it is also troubling that CW has adopted a plan (in conjunction with Rose) to convert STPCV from the middle income, stabilized, residential community we find attractive from an acquisition and conversion standpoint, to student/dormitory style housing offering one (and, I imagine a smattering of two) year leases to groups of individuals joining together to rent a single apartment. 

The lease terms would, of course, correspond to a single school year or maybe two school years with an individual student free to either rent or sublease their portion (a bedroom, or maybe even a couch or two) of the total apartment, in order to cover ever changing personal and individual plans.

We understand that CW entered into this leasing plan with the intent to continue it over and indeterminate term.  It is clearly driving up rental rates (potentially defeating the spirit of the rent stabilization laws) because of (i) the substantial vacancy allowances as well as additional equalization allowances, which additional allowances are authorized based on each vacant apartment's previous occupancy by a rent stabilized tenant who lived in the apartment for at least eight continuous (8) years. 

A major result of the current leasing practices is to directly remove the renovated STPCV apartments from protection (from unreasonable increases) under the rent stabilization laws, thereby eliminating the middle income family profile of the community by negatively impacting the intentions of rent stabilization and protections of New York City residents.

Possibility of Self Dealing

I think we also ought to be concerned here that the activity is part of a sub rosa plan on the part of CW’s parent – Fortress Investment Group – to purchase STPCV at a lower market value for the total property, based on its rental value without credit for the  potential up-side value to a condo/coop conversion.   I admit this last portion may sound “over reaching,” but we believe that their current policies and actions demonstrate that they are setting the stage to buy the property based on nearly fully leased conditions with rents at the top of the comparable market (other than those apartments that are held at lower rents through entrenched stabilization) and fairly controllable vacancies Thereafter, they may just be able to argue that they are paying a fair price.

Of course, in an auction situation (with us bidding) the foregoing would be difficult (but then again, they are showing no signs of actually intending to run an auction any time soon).  The current market value (with the condo/coop conversion potential), is still approximately $3 billion, in our opinion.

We need to monitor this situation carefully and I am having counsel work with HPD and the AG’s office to inquire as to whether any of CW’s acts might gum up the works as and when CW proceeds with the ultimate liquidation of the property on behalf of the existing senior mortgage holders.

Building Plans

I believe additional comments are necessary to further clarify my original notes dated prior to September 28, 2011 and concerning the physical dangers and other consequences of the conversion of STPCV from a middle income, stabilized, residential community with a defined average population, to student/dormitory style housing with a significant increase in the physical number of people occupying the same amount of original limited space.

Our team reviewed the current work (building) plans as submitted to the building department of New York City by CW/Rose.

 We estimate that the increase in new STPCV resident population within the same original space, (thereby decreasing fire safety, maintenance, management and sanitation services) will be at least fifty  (50%) percent over the current STPCV resident population, to as much as a two hundred fifty (250%) percent over the current STPCV resident population.

The population increase depends on the individual apartment layout and the number and position of the new room partitions installed or currently being installed by CW/Rose. An example is a recent advertisement on Craig's List....
"We are 2 early 20's females and we found a great apt in East Village (Stuy Town- near 14th and 1st). The apt is a 3 bedroom flex with a living room also. ...
newyork.craigslist.org/mnh/roo/2641099547.html "

Another way at looking at this increase in resident population, is that for every one hundred (100) apartments partitioned and leased as student/dormitory housing, the physical occupancy (in the same original space) at STPCV will increase by at least two hundred (200) additional tenant residents, to as many as five hundred (500) additional tenant residents.

To expand the reality of what is happening, for every five hundred (500) apartments partitioned and leased (Fortress/CW and Rose have already renovated and leased approximately five hundred apartments) as student dormitory housing, the physical occupancy of the additional tenant residents in the same original space, will increase by at least one thousand (1,000) additional tenant residents to as many as fifteen hundred (2,500) additional tenant residents.

Fortress/CW and Rose have made a clear statement in their (building) work permit, or in the alternative, have allowed the following statement to appear in their (building) work permit; NO CHANGE IN USE, EGRESS OR OCCUPANCY.

At best this statement is not true. At worst, the statement is deliberately false with the specific intent to mislead the Building Department and the City of New York.  

We are convinced that by allowing such statement to be prominently inserted into the (building) work permit, Fortress/CW and Rose understand that the building department does not fully recognize the drastic increase in residential tenant population or the serious potential dangers that accompany such population increases in an original, small physical space.

If Fortress/CW and Rose are allowed to continue this active partition of the original apartment as many as seven thousand five hundred (7,500) additional residential tenants will be added over the current residential tenant occupancy, without any without any increases to the physical space of the housing or the upgrades and modifications to fire protections as well as egress from the buildings, or additional and required maintenance, management and sanitation services.  

While the increased residential tenant population will occupy the same original space as currently exists this increase in population without adequate increases (in STPCV as well as in the general area of the community) in fire, police, maintenance, management and sanitation services  will place an unusually heavy burden on community services due to the increased physical danger as well as a substantially lower quality of life to the average family in the STPCV community.

In addition to our very substantial concern about the physical welfare of the STPCV residents and surrounding community, those elements that relate to "quality of life" will face serious downgrading for all of the families in the community.  The results of such deliberate and drastic "over population" has already started with the first few hundred apartments in which the partitions have been installed or are planned to be installed. 

Lastly and worthy of note are the projected costs to reconvert the property from student/dormitory style housing back to a middle income, stabilized, residential community with a well defined, average population. This process of re-stabilizing the STPCV community, will require a long number of years and a highly significant capital investment.

For clarity concerning the building permit and the intentions of Fortress/CW and Rose, I have attached an actual signed copy (as filed and accepted by the Building Department on September 16, 2011).

-----------------

STR here: I myself have questioned for years how adding partitions to an apartment does NOT change "use, egress or occupancy." This is something the TA should have fought ever since it started. I'm not aware if the TA ever challenged these type of work permits.  If not, why not?

Below is the signed copy referenced in Guterman's memorandum (click to make larger):

Guterman's Purchase and Conversion Plan Sent to Tenants a Few Years Ago

Click to make larger.

SCRIE To Be Expanded

Finally, splendid news that should be of considerable interest and assistance to our seniors and prospective seniors and a plus for affordable housing:

http://town-village.com/2014/06/02/council-backs-expansion-of-eligibility-for-scrie/

"The plan, which was first enacted in the state two months ago, would increase the maximum income a senior can have in order to qualify for the rent assistance program from $29,000 to $50,000. SCRIE (Senior Citizen Rent Increase Exemption) limits rents for people over 62 in rent-regulated housing who pay more than a third of their incomes in rent. Any rent hikes after leases are signed get paid to the landlord through a tax abatement, not by the tenants. The expansion is expected to make 22,000 additional seniors eligible for the program, Kavanagh said."

Thank you, Brian Kavanagh.

Compelling Conversation at the TA Facebook Page

Damn good points being made there at the moment:

https://www.facebook.com/groups/stpcvta/permalink/10152406618416690/

May 22, 2010