CW Capital officially owner of ST/PCV

Stuyvesant Town leasing office (Photo by Sabina Mollot)

Stuyvesant Town leasing office (Photo by Sabina Mollot)

By Maria Rocha-Buschel

CW Capital formally took ownership of Stuyvesant Town and Peter Cooper Village in a move to prevent a “mysterious investor” from taking control of the property, the New York Times reported yesterday.

The paper noted that an unidentified company notified the loan servicer that has controlled Stuyvesant Town and Peter Cooper Village since 2010 that it would be exercising its right to buy a key loan on the property. As CW assumed this was the first step in the unknown company’s attempt to seize control of the complex and force bankruptcy, after which a new owner would then try to buy the property for a low price, the company moved to file the deed on Tuesday and finalized the deal in court on Thursday. As a result of the deal, CW Capital paid $117 million in taxes to the city and $19.8 million to the state.

In an official statement, CWCapital confirmed it had acquired title to Stuyvesant Town and Peter Cooper Village on Tuesday through a deed in lieu of a foreclosure, canceling the auction that was planned for June 13.

“CWCapital Asset Management (CWCAM) determined this action to be in the best interest of the certificate holders and provided the greatest stability for the community,” the company said. “This ‘deed-in-lieu’ will have no impact on residents or on property operations. CWCAM has previously said that it would begin to evaluate disposition alternatives in the latter half of 2014.  That estimate has not changed.”

Although the identity of the company is unknown, the Wall Street Journal noted that the Government of Singapore’s real estate investment arm, GIC, has held a part of the mezzanine debt for years and it would have been possible for more junior holders of the debt to make a move to control the property by buying the piece owned by CWCapital, which controlled the senior most portion of the debt. It is not clear if GIC still owns that piece of the debt.

City Council Member and Peter Cooper resident Dan Garodnick said he’s optimistic about the foreclosure’s cancellation.

“This eliminates the circus that could have unfolded at a mezzanine foreclosure sale,” he said. “It is the right next step that will give time for a more considered process that can protect not only the bondholders, but also the tenants and the city.”

As T&V reported on June 5, Garodnick and other local elected officials are drafting emergency housing legislation that will be introduced at the city and state level. The legislation was mentioned in an email from the ST-PCV Tenants Association sent on Tuesday as a response to the expected foreclosure, although the council member declined to discuss details. Since the news of CW’s court action, Garodnick said he still expects to move forward with the legislation.

State Senator Brad Hoylman, who is working with Garodnick on the legislation in addition to Assemblyman Brian Kavanagh, was also hopeful that the city would protect affordability in Stuyvesant Town.

“The 25,000 resident population of Stuy Town-Peter Cooper is larger than many cities in New York,” Senator Hoylman said. “Imagine the response if, say, Kingston or Glens Falls or were being sold off to real estate investors! We can’t make the same mistake twice by sitting idly by as thousands of homes are being sold out from under middle-class tenants. I’m encouraged by the City Administration’s stated goal  of ‘using every tool at its disposal’ on a solution that protects affordability at Stuy Town-Peter Cooper. This is a critical test of our will and ability to change direction and make preservation of affordable housing a priority.”

Although the auction for next Friday has been cancelled, the ST-PCV Tenants Association is still planning to hold a rally in front of City Hall that day because they are continuing to fight to acquire the property with Brookfield Asset Management.

“A tenant-led purchase is the only defense against a predatory equity takeover,” the TA said in an email blast to neighbors on Thursday after the news broke that CW Capital had taken ownership of the site. “We could be sold to the highest bidder or even to CW’s parent company, Fortress Investment Group. That’s why our rally for June 13 is as important as ever.”

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Pols planning housing ‘emergency legislation’

Council Member Dan Garodnick (second to left) with Assembly Member Brian Kavanagh and State Senator Brad Hoylman pictured at a January meeting of the ST-PCV Tenants Association meeting, with (far left0 TA attorney Tim Collins

Council Member Dan Garodnick (second to left) with Assembly Member Brian Kavanagh and State Senator Brad Hoylman pictured at a January meeting of the ST-PCV Tenants Association meeting, with (far left) TA attorney Tim Collins (Photo by Sabina Mollot)

UPDATE: Since this story ran in the June 5 issue of Town & Village, CWCapital moved to formally take ownership of ST/PCV, a story in the New York Times reported. According to Council Member Dan Garodnick, he still expects to move ahead with the emergency legislation.

By Sabina Mollot
In response to the upcoming foreclosure sale of some of the Stuyvesant Town debt, local elected officials are drafting emergency legislation to help protect the stability of the community and others like it.
However, it’s unclear what that legislation would do or if it would impact the foreclosure process in any way.
The legislation was mention in an email sent by the ST-PCV Tenants Association to neighbors on Tuesday afternoon, in response to being asked what the association was doing about the foreclosure.
Along with scheduling a rally on the day of the sale, Friday, June 13 at 10 a.m., in front of City Hall, the email mentioned that the TA had approached the mayor as well as the attorney general to ask for help. Additionally, the TA noted, “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.”
When asked for details on the legislation, Garodnick said he couldn’t provide any yet.
However, he said, “We are contemplating a variety of options. Hopefully we’ll have more soon. I can’t say much more than that at the moment.”
He also said that he’d been in touch with the mayor’s office about the impending foreclosure. “My sense is that they are looking at ways to be helpful,” Garodnick said.
The mayor’s office hasn’t responded to T&V’s numerous requests for comment on the subject of the Stuyvesant Town foreclosure.
Last week, Garodnick announced the formation of the Coalition Against Predatory Equity, which is aimed at keeping affordable housing from turning into overleveraged housing.
Garodnick, who’s also an attorney, added that the only parties with the power to stop or delay the foreclosure are those “in the capital stack.”
The TA said in the Tuesday email it wasn’t sure if one of the debt holders would attempt to stall the process or if CWCapital would attempt to continue to shut the TA out of the process. CW has still declined to talk business about the TA’s hope for a condo conversion plan. The company has also declined to discuss a bid reportedly being prepared by its parent company Fortress, of $4.7 billion.
“Ultimately, we can control only what we can control,” the TA said. “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.”
The Tenants Association, along with asking tenants to show up for the rally, is seeking volunteers to flier buildings.
The TA is also offering bus rides to City Hall. Those who want to reserve a seat are asked to register online.