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?”

Conversion, legal issues, rent regulations to be discussed at TA meeting

Brewer, Stringer support TA’s conversion effort

ST-PCV Tenants Association President John Marsh speaking at meeting on Saturday (Photo by Sabina Mollot)

ST-PCV Tenants Association President John Marsh at a previous meeting (Photo by Sabina Mollot)

The Stuyvesant Town-Peter Cooper Village Tenants Association will be holding its next general meeting on Saturday, December 6 at 1 p.m.

Topics will include recent legal issues, the annual review of Tenant Association activities, a conversion update, the Fannie Mae–Freddie Mac commitment to ST/PCV, what lies ahead in Albany post-election with respect to tenant issues and how New York City’s Comptroller’s Office and the Manhattan Borough President’s office will support the TA’s conversion effort.

Speakers will include TA attorney Tim Collins, Councilman Dan Garodnick, Congress Member Carolyn Maloney, NYS Senator Brad Hoylman, NYC Comptroller Scott Stringer and Manhattan Borough President Gale Brewer.

After the speakers, there will be an open mike question-and-answer session. Tenants will have an opportunity to line up before a floor microphone and ask about critical issues.

The meeting will be held at Middle School 104, East 20th Street between First and Second Avenues. Doors open at 12:30 p.m.

Letters to the editor, Oct. 9

CW, pols should help with Con Ed night noise

I’m writing to you at the suggestion of Sherman Sussman, whose complaints about noise from the Con Ed plant were recently the subject of an article in T&V.

I live in the same building as he does and would like to see Stuyvesant Town management and our local representatives (such as Dan Garodnick) take the issue of noise at the southeast corner of Stuy Town seriously. There is a guard booth at the intersection of 14th Street and Avenue C that is never staffed.

If a guard were on duty, he or she could monitor the area for unnecessary noise and help to prevent it. Noise comes from trucks entering and leaving Con Ed at all times of night. It also comes from other traffic at this busy intersection, including many ambulance and fire truck sirens. And it comes from pedestrians who tend to feel that at this remote end of 14th St., they can yell, shout and let off steam at all hours. Finally, it comes from construction work, often associated with Con Ed.

I feel it is the duty of Stuy Town management, as a landlord renting living space at this intersection, and of the city government to make sure that sirens are not louder than they need to be, especially at night, that cars do not honk their horns due to traffic congestion (station a policeman, if needed, to help with traffic flow), that pedestrians do not make undue noise.

Finally, I am waiting for the day when city buses will become quieter. There is no reason why, in 2014, they need to sound like freight trains. I hope you will follow up on Mr. Sussman’s complaints and the issue of noise pollution at Stuy Town’s perimeters.

Sincerely,

Livia Tenzer, ST

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Letters to the editor, Sept. 18

Cartoon by Jim Meadows

Cartoon by Jim Meadows

Does noisy work have to be done at 7 a.m.?

To the Editor:

The other day around 9:30 a.m. I passed a group of PCV/ST workers sitting on a bench taking a coffee break. Their leaf blowers were resting quietly on the ground along with a large pile of leaves. It was quiet, but it was very noisy earlier when these leaf blowers were operating their loud machines, probably around 7 a.m.

I say 7 because on another occasion at 7, I called Public Safety to complain about these early morning noises which make it impossible for many residents like me to get adequate sleep. Public Safety identified that morning’s noise as a street sweeper and referred me to Resident Services. The woman at Resident Services told me that this noise was necessary because management “has to maintain the property.”

When I informed her of NYC’s law prohibiting loud machine noises before 8 a.m., she referred me to the property manager. But when I called the property manager, she wasn’t answering her phone so I left a message to call me back regarding the noisy machines. She still hasn’t returned my call and I’m betting she never will. After all, what could she say?

On pcvstliving.com, management states, “We are dedicated to providing the most comfortable and convenient experience for our residents.” Also, management’s “noise policy” urges residents to “Be mindful and considerate of neighbors during traditionally quiet hours (late night and early morning).”

Furthermore, “it is expected that you will do everything possible to diminish the transmission of sound and noise.”

Huh? Is this the same management that doesn’t return residents’ calls about excessive noise? The same management that has street sweepers, lawn mowers, leaf blowers and other loud machines destroying the peace and quiet of those “traditionally quiet hours (late night and early morning)?” The same management that expects residents to “do everything possible to diminish the transmission of sound and noise”?

Noise is definitely a quality of life issue and both management and residents should be expected “to do everything possible” to maintain at least a reasonable, if not high, quality of life for humans on the property, not just the physical property itself.

After all, what’s more important, humans or property maintenance? So would it be possible for our dedicated, mindful and considerate management to schedule the operation of all those loud noisy machines at the same time when the PCVST workers were having their coffee break at 9:30 a.m.? It’s very simple really. All the quiet work and coffee breaks could be scheduled in the early morning while the loud and noisy work would be performed after 9:30.

It would be nice to be awakened in “those traditionally quiet hours” of early morning with the comfortable experience of bird song instead of Armageddon.

John Cappelletti, ST

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Letters to the Editor, Sept. 11

Owning won’t end problems with students

To the Editor:

I fully support Larry Edwards’ demand for a conversion “that is affordable to all the tenants who live here today and to those who have been living here for 30 to 40 years or more.” (Town &  Village, Sept. 4).

However, assuming that owning an apartment will prevent transient college students from noisy partying at all hours is unrealistic in today’s real estate market. The neighboring universities will merely buy up blocks of apartment condos or co-ops as investments and turn them into student dorms with the same “howling in the courtyards,” and “waking up their neighbors at 3 or 4 in the morning.”

As for affordability, only stronger rent stabilization laws can keep apartments within the middle class, not “ownership.” Today’s “market rate” for two-bedroom Manhattan co-ops ranges from $750,000 to over a million. Families earning under $300,000 a year will be shut out.

This has nothing to do with building owners, the Tenants Association, or elected officials – all  are powerless against the so-called “free market.”

And for wealthier people who can afford to “own,” they might still find themselves living next door to howling students. They might as well join the party.

Elliot Markson, ST

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Deadline has passed, but Stuy Town affordability talks will continue

Mayor Bill de Blasio, seated with Council Member Dan Garodnick, ST-PCV Tenants Association President John Marsh and others, meet at Garodnick’s apartment on Tuesday. (Photo by Bob Bennett, mayor's office)

Mayor Bill de Blasio, seated with Council Member Dan Garodnick, ST-PCV Tenants Association President John Marsh and others, meet at Garodnick’s apartment in July. (Photo by Bob Bennett, mayor’s office)

By Sabina Mollot

Sunday, August 10 marked the end to a 60-day deadline that CWCapital had given to the Tenants Association, the mayor’s office and local elected officials to come up with a plan aimed at keeping ST/PCV apartments affordable (that is, the ones that are still affordable — around 6,000). However, according to a spokesperson for the mayor’s office and Council Member Dan Garodnick, all parties have agreed more time is needed.

“We’ve had productive conversations with CWCapital about protecting affordability at Stuy Town and Peter Cooper Village,” said Wiley Norvell, a spokesperson for Mayor Bill de Blasio. “And all parties have agreed it’s in the best interests of the city, the tenants and CW Capital to continue those talks in the months ahead before any action is taken.”

In July, the mayor joined local politicians and Tenants Association leaders for a coffee klatch at Garodnick’s apartment, which was aimed at discussing proposals that would interest CW. One possibility has been using tax incentives to preserve affordability. The TA discussed its condo conversion plan, and later said the mayor was open to the idea, though he ideally would prefer the apartments kept as affordable rentals.

Following the deadline, Garodnick said, “The conversation has started but certainly not ended.” The time is needed to “get into greater detail about ways to protect longterm affordability.”

This post will be updated if CWCapital responds to a request for comment.

CWCapital foreclosing on Stuy Town debt

Stuyvesant Town leasing office (Photo by Sabina Mollot)

Stuyvesant Town leasing office (Photo by Sabina Mollot)

By Sabina Mollot
After years of remaining silent on its plans for putting Stuyvesant Town/Peter Cooper Village up for sale, CWCapital made a move on Tuesday to foreclose on the property’s mezzanine debt and then it was reported that Fortress, CW’s parent company, was preparing a $4.7 billion bid.
Neither Fortress or CWCapital would comment on that report, but in a brief written statement, the special servicer of the property, which also manages a chunk of the mezzanine or junior debt, said that a sale was scheduled to take place on June 13.
The company went on to say the action “will have no impact on our residents or on property operations.”
In response to the news, which was first reported in the New York Times, ST-PCV Tenants Association Chair Susan Steinberg said she was tired of seeing the community being treated “like a football.”
“Everything that went into building a unique residential complex for the middle class has been upended in the interest of the bottom line,” she said. “We are being punted towards a goal that isn’t ours.” She added that it was time to have tenants own the place. But that was before hearing about the potential Fortress bid.
The Tenants Association had partnered with Brookfield Asset Management in 2011 in the hopes of buying the complex and going condo. CWCapital had declined to negotiate though saying no business could be discussed until “Roberts v. Tishman Speyer” was settled. But after the settlement, there was still no chatter about bidding or a conversion.
Council Member Dan Garodnick said anyone could bid in the foreclosure, but CWCapital itself could be the winning bidder, using its unique position as debt servicer.
“They could bid billions of dollars without writing a check,” he said, “Because they are owed money here.”
He added that the move to foreclose on the mezz debt wasn’t really a surprise, since technically the property’s already been in foreclosure for years.
“It just hasn’t been formalized because there hasn’t been any action to foreclose on the lenders,” said Garodnick. Ultimately, he said what matters is that tenants’ rights are preserved.
In an official statement, the Council member also said the great bidding war of ‘06, in which potential owners were wrongly led to believe the sky was the limit on what they could charge for rents, shouldn’t be repeated.
“We cannot allow an overheated auction with wild expectations that puts a target on the back of rent-stabilized tenants.” he said. “We have seen that movie before. Tenants, and the City of New York, cannot afford to let that happen again.”
That view was shared by Assemblyman Brian Kavanagh, who said any developer with eyes on this particular prize needs to know that “This is a community that will stand up for itself.” He also said he hoped the real estate industry will have learned from Tishman Speyer’s mistakes of unrealistic expectations and disregard for the Rent Stabilization Law.
“They shouldn’t bank on being able to remove any of the tenants,” said Kavanagh. The “Roberts v. Tishman Speyer” class action suit will keep ST/PCV stabilized until the J-51 tax abatement expires in 2020. On the other hand, with one-bedroom apartments in Stuy Town going for rents that start at close to $3,000, many of the newer residents of the community still consider themselves stabilized in name only.
Developer Richard LeFrak, who bid on the property in 2006, is possibly interested in doing so again, according to the Times piece. Another developer, Gerald Guterman, who’s openly expressed a desire to turn ST/PCV co-op, said that now he’s not sure what he wants to do.
Noting that the announcement by CW only gives potential bidders a month lead time, he quipped, “Fortress makes an offer today. You think it’s because they own CW and they’re not giving outsiders the opportunity? How do you have time to (plan) unless you are familiar with what’s going on?”
As for the reported bid amount, Guterman said he isn’t sure how that sale price could make it possible for current tenants to buy if given the option. He also wasn’t sure if the price is worth it considering all the students and others living in apartments converted with pressurized walls.
“It’s still a number where I could do it but I’m not sure I want to,” he said.
Meanwhile, last August, while still a candidate for mayor, Bill de Blasio penned an op-ed for this newspaper, saying the city should make sure ST/PCV remains affordable.
“While Peter Cooper Village-Stuyvesant Town is privately owned, the city has an obligation to keep its homes affordable for hardworking New Yorkers and their families,” he said. “PCV/ST was created through the power of the city and its use of eminent domain – therefore, it’s the responsibility of the city to ensure that these homes and other affordability housing are never beyond the reach of middle class New Yorkers.”
A spokesperson for the mayor did not respond to a request for comment on this story, but Garodnick said he learned that a tenant-led bid would have the support of the city’s housing commissioner, Vicki Been, and the deputy mayor for economic development, Alicia Glen.
News of the imminent sale comes on the heels of a settlement over five MCIs between CWCapital and the Tenants Association and word that “Roberts v. Tishman Speyer” tenants will finally be paid the money they’re owed by CW.
With Tishman having paid a record-breaking price of $5.4 billion, along with $1.4 billion in mezzanine debt, there was $3 billion in senior debt (the lenders of which are represented by CW) and $1 billion in equity.

Letters to the Editor, Jan. 3

Weekly cartoon by Jim Meadows (jimtoon.com)

Weekly cartoon by Jim Meadows (jimtoon.com)

A bit of feedback

Dear T&V,

Steven Sanders’ article, “Obama’s cure for the common cold” in the opinion section of the Dec. 5, 2013 issue was exceptionally funny and insightful.

I don’t know what’s happened to movie critic Seth Shire, who I’ve always enjoyed. However, judging by four of his movie reviews, Michael Phillips is pretty good and very funny.

I am grateful that you thought my letter to you about my visit to Stuyvesant Town was worth printing in “The Soapbox” of your the Dec. 5, 2013 issue.

I love that the Third Street Music School is on 11th Street. Thank you, NYC.

To Sabina and Maria, it finally just hit me how many articles you two write every week! Where would T&V be without you? (It would be about six pages, mostly ads and columns and a couple of letters.)

Dear Mr. Kilik, your review of “Soul Doctor” was wonderful and I’m dying to see it but I’m here in Minneapolis. But you sure made it come alive in your terrific column.

Dear Mr. Hagedorn, you’ve done it again with your article in the October 3, 2013 article, “Subway grates: Urban Artifacts.” God, I love your column.

Most sincerely,

Richard Luksin
Minneapolis, MN

P.S. I’d give anything to go on one of Alfred Pommer’s (historical walking) tours.
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Letters to the Editor, Oct. 25

Conversion would bring back stability

To the Editor:

After the ST/PCV Tenants Association’s recent mailing to residents explaining that it will be taking its plan for a rental or purchase conversion plan directly to bondholders, two long-time neighbors asked me why a conversion was needed at all – why Stuy Town and Peter Cooper can’t just go happily on as an all-rental community. The answer is pretty simple: Because MetLife sold us to Tishman Speyer for $5.4 billion dollars (most of it borrowed.)

As Tishman Speyer learned in its brief, turbulent few years as owner – there is no way that the income from rent-stabilized apartments can support maintenance along with payments on that huge debt. So while it’s possible that we could remain an all-rental community, there is no way that we can remain an affordable all-rental community.

Unless we tenants can gain control of our lives – which is the goal of the Tenants Association-Brookfield plan for a condo conversion with the option to remain a stabilized renter – the future looks grim for those of us who love this place.

If CW Capital chooses to sell to another Tishman-like real estate operator, the new owner must make a concerted drive to increase revenues by replacing rent-stabilized residents with those who can pay market rates. Long-time residents would face renewed harassment to drive them from their homes and, if they managed to stay, would be surrounded by crowds of eight or nine young people jammed into the two-bedroom market-rate apartments it takes eight or nine of them to pay for.

The other destructive possibility is that a new owner would view our wonderful parks and playgrounds as potential profit centers with who-knows-what-kind-of commercial development consuming some of these 80 prime New York acres.

I’ve lived here for 51 years and, like many others, would love to recapture those happy days when we were a family-oriented community of rent-stabilized tenants, when there was one porter per building and the parking garages charged $35 a month.

But Met Life built this community as a kind of public service to returning World War II veterans. Met’s little Eden was a unique, historic and not-to-be-repeated event that we lucked into. No profit; they just needed to break even.

We can’t go back to the good old days, so let’s move forward to a return to stability. Someone who understands these things explained to me that the TA-Brookfield conversion plan would produce that stability by lessening dependence on rental income to cover operating costs and debt payments.

In addition to the upfront capital Brookfield can provide, the many current residents and outsiders who would value ownership of their homes would also help produce the capital needed to maintain the property and to lower the size of a new mortgage, making a structurally sound and affordable combined ownership-rental community possible into the future.

Soni Fink, PCV

Note: The author of this letter is a board member of the Tenants Association, though she is not writing on behalf of the TA. Continue reading