TA not scared off by $4.7B debt figure, Residents mixed on if they’d buy

Jan1 Susan Steinberg

Susan Steinberg, pictured at a June Tenants Association rally (Photo by Sabina Mollot)

By Sabina Mollot

They want how much?
At a recent meeting of the Stuyvesant Town-Peter Cooper Village Tenants Association, tenants were told by Council Member Dan Garodnick about how the property’s bondholders say they’re owed $4.7 billion. A far cry from the roughly $3 billion in senior debt that was initially believed to be the amount CWCapital would have to recoup on the disastrous Stuy Town deal of ’06, the comment by Garodnick drew a collective gasp from the audience.

As Town & Village previously reported after the meeting, the $4.7 billion figure was explained as being due to interest and fees.
“A whole list of junk,” Garodnick informed neighbors. “Special servicing fees, that’s what they claim to be owed.”

The figure is also the same amount that Fortress, CW’s parent company, planned earlier in the year to bid on the complex.

While this amount would be reflected in the price of individual units in the event of a conversion, the TA maintained last week that it is still interested in bidding and a conversion, and that the TA’s partner, Brookfield Asset Management, is also still on board.

“It’s not a wonderful position (to be in),” Susan Steinberg, chair of the Tenants Association, said this week, while reflecting how at one point the property had been valuated at around $2 billion. “It’s creeped up more than twice that. The insider price is not going to be as appealing.”
But, she added that the TA’s talks with the mayor’s office on preserving affordability were still ongoing. “I’m hoping a structure for a sale will be reached that is palatable for everybody,” she said. “The 4.7 billion reflects a lot of interests, but I’m not giving up. I’m not being discouraged. It’s not over until the gavel bangs down and you hear the word ‘sold.’”

The mayor has so far not taken a position on the TA’s goal of a non-eviction condo conversion, though he’s focused on preserving affordability at the approximately 6,000 apartments in ST/PCV that are still in fact affordable.

Meanwhile, Garodnick said he too still believes a condo conversion is the best way to maintain stability at the property, where the smallest units, five newly built studios, currently range in rent from $3,162-$3,420.
“I think giving people that choice has great value for the deal and for people who live in the community,” said Garodnick.

This week, this Town & Village reporter quizzed a few residents to see if they thought purchasing their apartment would be in the cards for them – should an actual offer ever be made.

In response, one resident of five years answered, “hell yeah.
“I’d buy my apartment and my neighbor’s apartment,” he said.

The resident wouldn’t provide his name, explaining that his company represents the property’s lenders. But, he added, he thought any such possibilities were far in the future. “It’s going to be a long time. It’s not just a matter of being able to buy or not. It’s getting the necessary permits and in terms of upgrading the place, all of this is complicated. People are in rent stabilized apartments that haven’t been renovated since the 50s. Do you charge rent stabilized people equally? What if you’re paying $5,000 a month? I pay three times what my neighbors are paying. Two of my neighbors pay less than $1,000.”

He also said he tenants those in unrenovated apartments would find ways to buy, too. “You can always find someone to lend you money like family,” he said, “and then you can turn around and sell. I’ll lend my neighbor the money so she can sell to me in six months.”

Another resident, a woman who lived in Stuy Town for over 50 years, said she couldn’t answer the question without knowing the price.

“You can’t ask people if they could afford it if they don’t know what the price is,” she said. Still, she was open to the idea. “I would consider it because this is a very ideal place to live in New York. Even though I’m a senior, I would think of it more for my daughter more so than to live here. A lot of seniors would do it for their children.”

Another senior, however, felt differently.
John Pertusi, who’s been a resident for 47 years, said, “I’m 85 years old. I have no prospects for the next 15 or 20 years. So I certainly would be personally opposed to it.”

Lance Levitt, an 18-year resident who works for a small software company, said he was interested if the price was within the realm of reality.

“It’s always been a thought,” said Levitt, who lives in an unrenovated apartment. “They’ve been talking about it since the first sale. If it’s affordable we can do it, if not we can’t. It’s pretty black and white.”

He added that his stepmother also lives in Stuy Town and if he could, he would want to help her buy as well.

One resident for over 30 years told T&V he wouldn’t even consider buying until a policy is put into place that would “get rid of the transients.” However, he doesn’t think that will happen, nor does he believe CW is in any rush to sell, anyway.

“They’re waiting for the 1947-1953 people to pass on to increase the percentage of (vacant) apartments. It’s a business. It’s a waiting game. They’ve waiting this long. Can they wait another year?”

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