By Sabina Mollot
Developer Gerald Guterman, who recently expressed his desire to see Stuyvesant Town tenants organize to demand a conversion and re-settle the “Roberts” and MCI settlements, while also hiring him as a consultant to help with the effort, has continued to pursue tenants as clients by drawing up a contract over the weekend.
However, he wants to see at least 5,000 tenants participate in such an effort. Otherwise, he warned, his LLC company, West Palm Beach-based Guterman Partners, won’t take the job.
“Before we can accept an ST/PCV assignment, it will be necessary for at least five thousand (5,000) separate residents families to sign a Consulting Agreement with a consulting subsidiary of Guterman Partners, LLC,” he said.
In exchange for his services as an independent contractor, he’d get $10 per participant (a total of at least $50,000).
His statement was part of a letter he wrote directed to tenants (though so far unmailed) asking them a number of questions such as whether tenants were told they’d be charged for the MCIs they received and for the “Roberts” tenants, if they received “the full dollar recovery” in damages for all the rent they overpaid. The letter also went into quality of life issues.
“ST/PCV residents, were you told (when you signed your lease) that the building you lived in was being converted to ‘high population’ student/dormitory housing?” He also blasted the recent concerts in the Oval as a scheme to attract students.
He also said, after the news that CW’s parent company Fortress was preparing a bid of $4.7 billion, that he wasn’t sure he was still interested in preparing a bid of his own, preferring instead to be a consultant in a tenant-led effort.
The contract itself, while saying Guterman would provide consulting services, makes no mention of the re-settlement of litigation, student housing or other issues he wants tenants to fight. Those issues are instead mentioned in the letter. Questions include asking if tenants were told, upon signing their leases, that the Oval would be rented out for commercial purposes or that businesses would come “alive” right on the Oval or that the quiet of tenants’ apartments would be disrupted “because the landlord is using mass-entertainment to attract students to the recently converted dormitory housing?”
He also invited tenants to contact him through the email address: firstname.lastname@example.org.
A spokesperson for CWCapital declined to comment on Guterman’s letter.
As for the odds of Guterman being able to secure all the signatures he wants, it may prove a challenge. In May, 2013, attorneys representing tenants in the “Roberts” suit had a tough time just getting tenants to file their paperwork authorizing them to receive their damages checks. So much so that the Tenants Association and local elected officials stepped in to go door to door in ST/PCV in an effort to get tenants to file. This, recalled lead “Roberts” attorney Alex Schmidt, was even after all the “Roberts” tenants received documents in the mail with application forms.
Schmidt declined to comment on Guterman’s letter.
In previous statements directed at tenants, Guterman urged a “gloves off” fight in court against CWCapital in order to renegotiate “Roberts” and the MCI settlement and force a conversion and the end to student housing and apartments with pressurized walls.
When asked about this, an attorney very familiar with “Roberts,” Leonard Grunstein, said he thought that a court agreeing to re-consider the case was highly unlikely. After Stuy Town was put up for sale by Met Life, Grunstein was hired by the Tenants Association to help with a tenant-led bid. It was then that he discovered that landlords benefiting from J-51 tax abatements could not deregulate apartments, which is what ultimately led to the “Roberts” lawsuit.
“I don’t think that can change,” said Grunstein. “Anything is possible, but it doesn’t sound realistic. You would have to prove that they are overcharging new tenants.”
Another attorney, Jeffrey Turkel, who represents owners and groups representing the real estate industry, told Town & Village that generally, courts don’t like to overturn cases.
Turkel, along with a partner at his firm, Rosenberg & Estis, represented the Rent Stabilization Association, an owners’ organization, in “Roberts” when the RSA submitted an amicus brief, or document in support of Tishman Speyer.
Although he didn’t want to comment on “Roberts” specifically, Turkel said, “If someone wanted to undo or overturn a stipulation, they would have to establish fraud or mistakes or overreaching or something like that. Once a stipulation of a settlement is signed by two parties it is binding. What courts don’t like is for people to sign a stipulation and then come back and say, ‘We didn’t mean it.’ That’s basic, settled New York law. Otherwise, you’d have chaos.”
The Tenants Association, meanwhile, responded to the letter by defending its own conversion plan and partnership with Brookfield Asset Management.
“Now that our property is in play again, we expect old and new players to surface from time to time,” TA Chair Susan Steinberg said. “We are committed to delivering on our goals of long term affordability and stability for this community, and believe we have the right advisors and partners to accomplish that goal.”