Garodnick: Bondholders say they’re owed $4.7 B

Dec11 TA crowd

Tenants pack the auditorium of the Simon Baruch Middle School for the Tenants Association meeting on Saturday. (Photo by Maria Rocha-Buchel)

By Maria Rocha-Buschel
While the future of Stuyvesant Town/Peter Cooper Village remains as uncertain as ever, at a meeting held on Saturday, tenants got walked through what some of the legalese concerning the foreclosure that had been planned for earlier this year and then canceled means for the community.

This was one of the topics covered at the meeting, which was held by the ST-PCV Tenants Association and attended by around 500 residents who packed the auditorium of the Simon Baruch Middle School.

Council Member Dan Garodnick discussed how when the foreclosure was canceled, the deed of property was transferred to the senior level of the trust. He said that this means the bondholders now own the property but CWCapital continues to represent their interests. He noted that the agreement put in place means that CWCapital could represent the bondholders for a term of three years, which is renewable for a second three-year term. He added that they originally acquired the property for $3 billion and are open to the possibility of conversion but only if they get back the $4.7 billion they are owed.

When a resident asked later in the meeting why the amount had increased so much, Garodnick noted that it was due to interest and fees.
“A whole list of junk,” he said. “‘Special servicing fees,’ that’s what they claim to be owed.”

Garodnick also addressed a question from a resident about CWCapital’s parent company, Fortress. While Fannie Mae and Freddie Mac have pledged to not approve of any deal that reduced affordable housing, Garodnick noted that it was possible to cut Fannie and Freddie out of the process if CWCapital hands the property over to Fortress, although he noted that this scenario is unlikely.

State Senator Brad Hoylman speaks to the crowd, while Assembly Member Brian Kavanagh and Council Member Dan Garodnick listen. (Photo by Maria Rocha-Buschel)

State Senator Brad Hoylman speaks to the crowd, while Assembly Member Brian Kavanagh and Council Member Dan Garodnick listen. (Photo by Maria Rocha-Buschel)

Along with Garodnick, other local elected officials were in attendance to address the TA’s conversion effort, the state of affordable housing and other topics.
Congresswoman Carolyn Maloney and Assemblymember Brian Kavanagh were also at the meeting and were joined later in the afternoon by City Comptroller Scott Stringer, State Senator Brad Hoylman and Manhattan Borough President Gale Brewer.

Stringer assured the crowd his office is committed to preserving affordable housing, especially given the recent Democratic losses in Albany.

“Our office is ready to partner with whatever plan this Tenants Association puts forward,” he said. “Even the most important and ambitious housing plan can’t make up the loss if Stuyvesant Towns and Peter Cooper Villages of the world are lost.”
Stringer added that it was his son’s third birthday, eliciting cheers from the crowd. But when State Senator Brad Hoylman, who spoke next, made sure everyone was aware that it was also Governor Cuomo’s birthday, the room was silent.

“It’s just a fact. We’re gonna need him,” Hoylman said apologetically among laughs from the crowd after the negative reaction.

Holyman then discussed the Democrats’ current fate in Albany.
“Unfortunately it’s not very different from what you see out the window: cold, dreary and windy,” he remarked.

Hoylman blamed poor voter turnout in the recent midterm elections for Democratic losses in the state. With the rent laws up for renewal next year, he said that the Republicans’ new operational majority will make protecting tenants more difficult.

“Some Republicans live closer to Cleveland than to Manhattan,” he said. “But physically making yourself known makes a difference. We have numbers on our side and a lot of smart people on our side.”

He added that legislation protecting tenants did get passed in 2011 when Republicans also had a majority so he encouraged residents to remain optimistic.

TA attorney Tim Collins also spoke to address specific questions and concerns about rent and MCIs.

Collins discussed rent and MCI concerns at the beginning of the meeting. Residents of 431 East 20th Street in Peter Cooper Village said that they had received MCIs for façade work at the end of November and residents from 601 East 20th Street and 2 Peter Cooper Road also received docket letters from DHCR about MCIs for façade work.

“How is it restoration and improvement?” one tenant asked, prompting laughter from neighbors. Collins agreed with the assessment, noting, “It’s not an improvement, it’s a repair.”

A notice from the TA that was released on Monday said that more buildings will likely be hit with the MCI for façade work. The statement encouraged residents to keep the docket letters they receive about MCIs from DHCR and send copies to the TA so it can keep track of which buildings have received them and help tenants fight the rent increases.

Another issue discussed was apartment inspections with tenants skeptical that management only needs to give a day’s notice to come in for inspections. However, Collins confirmed that this is correct. If management needs to get into an apartment to do any work or make repairs, the tenants need to be informed a week in advance but if they need to get in just for inspections, they only need to inform tenants 24 hours before.

Collins also addressed late fees that some tenants have been charged with, including tenants who have been charged but said they don’t have a provision for late fees in their lease.

“If you have been charged a late fee, talk to management because there is no legal recourse for the fee,” he said, adding that tenants with such a provision who have been charged more than five percent should be getting a refund. He noted that there is also some leniency for tenants who are late on their rent the first time and he recommended talking to management about the fee.

TA chair Susan Steinberg noted that the TA will be meeting with management on December 16 and would be able to address questions from residents raised at the meeting, including the lack of action from public safety concerning speeding electronic bikes, disruptive NYU students and residents who are in non-compliance with the floor covering rules.

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One thought on “Garodnick: Bondholders say they’re owed $4.7 B

  1. So Management is only required to give 24 hours notice to inspect an apartment? Are they required to tell the tenant exactly what they are inspecting for? To what degree are they allowed to snoop around an apartment? I find it hard to believe that Management is legally permitted to exercise carte blanche intrusiveness. Sounds like a Gestapo tactic to me.

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