Stuyvesant Tenants Object to $68.8 Million Settlement

Two tenants of the Manhattan apartment complex Stuyvesant Town-Peter Cooper Village objected to a $68.8 million settlement residents reached with MetLife Inc. (MET) and CWCapital Asset Management LLC in November over rent overcharge claims.

The tenants sued MetLife and Tishman Speyer Properties LP in 2007, claiming the companies improperly forced at least one- fourth of the complex’s residents to pay market rents while the owners received more than $25 million in tax breaks. CWCapital gained control of the property after Tishman defaulted on its senior mortgage in 2010.

New York State Supreme Court Justice Richard Lowe gave preliminary approval to the settlement in November. A hearing on final approval is set for April 9. The two tenants in a court filing dated yesterday asked Lowe to reject the accord, saying current residents who are part of the settlement are being forced to accept ‘stabilized rents’ that are ‘wildly inflated’ and ’well above market rates’ in many cases.

“The settlement is therefore neither fair, reasonable nor adequate,” the objectors said in the court filing. “Indeed, because the settlement’s myriad concessions waive the rights of stabilized tenants, they render the settlement not only unfair but also violative of public policy.”

Legal Rent

The objectors, Joshua B. Katz and Leigh M. Singer, who have lived in a one-bedroom apartment in Stuyvesant Town since September 2008, said the settlement has set their legal rent at $4,410 and their preferential rent should be $3,380 if they don’t opt out of the settlement.

“To put these rents in context, comparable one-bedroom Stuyvesant Town apartments were recently advertised for under $2,900 on the property’s official website,” the objectors said. “Thus, Katz and Singer realize no benefit from the future rent- setting provisions of the settlement.”

Approval of the settlement would clear the way for the eventual sale of Manhattan’s largest apartment complex, which has been held up by uncertainty over how high legal rents can be set at the rent-stabilized property, according to commentary by the property’s loan servicer compiled by Bloomberg.

“It’s not surprising that of the thousands of class members, somebody filed an objection,” said Greg Cross, an attorney representing CWCapital, in a telephone interview. “It’s a strong endorsement of the settlement that only two were filed.”

John Calagna, a spokesman for MetLife, declined to comment on the objections.

The lower court case is Roberts v. Tishman Speyer, 100956/2007, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court at 8969 or cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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