Guterman: Tenants should organize and demand conversion

By Sabina Mollot

Gerald Guterman, the landlord and developer who’s previously expressed an interest in bidding on Stuyvesant Town and converting the place to a co-op, said this week that he is no longer interested in buying although he would like to participate as a consultant in a tenant-led effort to do so.

In a written statement he sent to Town & Village on Tuesday, Guterman said: “I do not believe that I will participate in any auction sale for STPCV. I would rather be helpful to an organized and laser focused tenant association. I can already feel the excitement and lifecycle satisfaction.”

Though CWCapital never agreed to discuss business with him, and the Tenants Association ultimately chose a different partner in its own effort to bid, Guterman still pitched his co-op plan to tenants, which he said would have cost them, on average, $315 a square foot for their apartments. However, those numbers were based on a winning bid of slightly over $3 billion. Following the recent news that CW was foreclosing and its own parent company Fortress was preparing a bid of $4.7 billion, Guterman told T&V he was no longer sure he was still interested in buying.

At this time, CWCapital is still in talks with the mayor’s office and local elected officials, working with the ST-PCV Tenants Association on a plan that would maintain affordability for apartments in the complex that are still in fact affordable.

CWCapital declined to comment on Guterman’s statements, which were aimed at urging tenants to organize and even take legal action to demand a conversion and other changes in the community. The Tenants Association also declined to comment.

Guterman issued his statement after seeing some comments on the Stuyvesant Report blog, which were questions about his motivation and credibility. This followed a previous comment he made, that’s since been highlighted as a post, which also urged tenants to organize on a conversion and other issues.

Tenants’ priorities, he stated, should include re-settling “Roberts v. Tishman Speyer” as well as re-settling existing MCIs, converting the property to an ownership one with tenants free to resell their homes at market price after a 48-month period and having unsold apartments sold to a nonprofit organization that would keep them as stabilized rentals for a 20-year period.

Guterman has also been openly critical of CWCapital for its housing of students and use of pressurized walls in those apartments, which he says creates strain on electrical and plumbing systems on 65-year-old buildings that weren’t built to be dormitories. Therefore he said stopping and reversing the practice of dorm housing is also something tenants should demand. He also said he believes it’s led to a change in occupancy, which could be a safety hazard.

“In case of an emergency, how do you get people out in those old elevators?” he asked.

He’s also been open about blasting the unexpected rent increases issued in ST/PCV last year, which were mid-lease hikes given to 1,100 “Roberts” tenants and five MCIs. The latter, however, were since reduced or eliminated for most tenants due to a Tenants Association-brokered settlement.

“People sign a lease and expect to sign a lease without getting a surprise,” said Guterman. “Even if you’re talking about $50 more a month (for an MCI), people live check to check. These people don’t have unlimited income.”

As for his suggestion of working with a “laser focused” tenant group on a conversion and other issues in ST/PCV, Guterman said he would do it in exchange for “a small retainer” so he can be legally involved. “I love the business. I love the excitement of it,” he said.

In the written statement, he recommended that tenants engage in a “gloves off” fight.

“Organized tenant strength cannot be fully appreciated unless you are the ‘target’ of such organization,” he said. The current management of ST/PCV, he added, has no idea of what could happen “in a sophisticated, tenant-sponsored, ‘gloves off’ financial and legal battle for the very economic ‘heart and soul’ of the property…

“In my career, I have found that final decisions are never final. Nothing is over until a property is sold to someone else (assuming there is no personal obligation). If the will of a tenant group is strong enough and leadership is sophisticated, all negotiations can be re-negotiated ad nauseam.”

In recent years, Guterman, who’s been in the real estate business for over 40 years, said he’s sold many condominium buildings in Florida, having sold all his properties in New York in 2005.

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