Guterman hopes to get 5,000 tenants to hire him

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: stpcv@gutermanpartners.com.

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.”

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.

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Editorial: Tenants still kept in the dark about the future

Tenants protest outside the leasing office this time lasy year. Their signs, along with the Tenants Association logo, read: ST-PCV A communiy. Not a commodity. (Photo by Sabina Mollot)

Tenants protest outside the leasing office this time last year. Their signs, along with the Tenants Association logo, read: ST-PCV A community. Not a commodity.
(Photo by Sabina Mollot)

On Tuesday, CWCapital dropped the bombshell that it would be foreclosing on Stuyvesant Town’s mezzanine debt and that there would be a sale in one month. A possible bidder who’s since emerged is CW’s own parent company, Fortress, at a rumored offer of $4.7 billion.
Since neither Fortress or CW have been willing to comment on this, it’s still not official or a done deal by any means.
However, when one considers the Stuy Town special servicer’s history of communicating on this issue, rumors wind up being the most reliable thing this community’s got to go on.
As of T&V’s Wednesday press time, even a developer who’s been eager to bid on the property, Gerald Guterman, now has doubts due to the high price. Because even if tenants are eventually given the opportunity to buy, how many current residents would actually be able to afford to?
As of Tuesday, the Tenants Association maintained that it is interested, with partner Brookfield, of owning, and no longer seeing the community get passed around like meat.
But again, there’s the issue of the pricetag. Speculation of what ST/PCV could be worth is what led to the most infamous real estate flop ever, with Tishman Speyer losing its investors’ billions. Is the place really worth $4.7 billion, even in a recovering market? And if a bidder thinks so, how many more (in many cases perfectly legal) efforts will be made to price out tenants in unrenovated apartments paying lower rents? Or even gouge those already paying higher rents? There’s always more “improvements” that could be made on the tenants’ dime permanently.
The new mayor made a campaign trail promise to protect ST/PCV and other places like it from the circling of real estate buzzards like the ones who wrongly thought a complex built for the middle class was the goose that laid golden eggs in 2006. Now it is time to see if he meant it.

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.

Guterman launches website to outline ST/PCV conversion plan

Image taken from Guterman's new site, www.stpcvfacts.org

As he promised in an article in Town & Village published two weeks ago, developer Gerald Guterman of Guterman Westwood Partners has launched a website aimed at explaining his plan to convert Stuyvesant Town/Peter Cooper Village into co-ops.

The website (www.stpcvfacts.org) is going to be interactive, with residents encouraged to send in questions that can be answered by GWP, and if the tenants give their permission, posted online with the answers. Continue reading

ST-PCV Tenants Association comments on Guterman letter

The following is a letter from the ST-PCV Tenants Association, commenting on a letter developer Gerald Guterman sent to tenants earlier this month regarding the TA’s decision to team up with Brookfield on another attempt to bid on the complex.

Dear Neighbor:

This has been an exciting week for all of us as we begin to put together a bid to CW Capital to protect the long term stability and affordability of Stuyvesant Town and Peter Cooper Village. We feel confident that our partnership with Brookfield will give us the ability to deliver a plan that is both commercially viable and also satisfies our goals.

You may have received a letter recently from Guterman-Westwood Partners LLC describing an alternative partnership with tenants to bid for Stuyvesant Town and Peter Cooper Village. It is important that our community have the facts, and that is why I am sending this follow-up letter. Continue reading

Developer Gerald Guterman to tenants: I’m a better candidate for ST-PCV conversion than Brookfield

Last year, a developer named Gerald Guterman pitched a plan to the Tenants Association to convert Stuyvesant Town/Peter Cooper Village to co-ops. Now that the TA has chosen to go with another suitor on a conversion plan, Guterman has sent out letters to every resident of the complex stressing why tenants should still be considering him as the conversion’s sponsor.

The letter says, in part:

“To the Residents of Stuyvesant Town/ Peter Cooper Village:

“Are you concerned about your home at Stuyvesant Town/Peter Cooper Village, as well as your own financial future?

“On November 30, 2011, to much fanfare, the Stuyvesant Town-Peter Cooper Village Tenants Association (the Association”) announced that it had entered into a “partnership” with Brookfield Asset Management (“Brookfield”) to acquire, and convey Stuyvesant Town/Peter Cooper Village to tenant ownership. Gutterman-Westwood Partners, LLC (“GWP”) and its affiliates, learned about the partnership from the Association’s announcemnents to the press, despite the fact that we have long offered the Association the opportunity to enter into a more tenant-beneficial partnership with us. Continue reading