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Stuyvesant Town Tenants Facing Mid-Lease Rent Increases

Nov. 1 (Bloomberg) -- Residents of Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, are facing mid-lease rent increases for the second time this year after a state agency agreed to let the property’s landlord recoup costs of improvements completed four years ago.

Rent-stabilized tenants at the 80-acre (32-hectare) complex received notices this week from the New York State Division of Housing and Community Renewal saying that the agency approved four applications filed in 2009 in which the landlord sought to raise rents after performing “major capital improvements,” according to New York State Assemblyman Brian Kavanagh, whose district includes the 11,000-unit development.

“Tenants were surprised to find four different notices that their rent is going up by some amount,” Kavanagh said in an interview today.

The applications were filed by former landlord Tishman Speyer Properties LP, which acquired Stuyvesant Town-Peter Cooper Village in 2006 for $5.4 billion, with plans to raise rents at the regulated units to market rates. Tishman defaulted on its $3 billion senior mortgage in 2010, and the property has since been under control of CWCapital Asset Management LLC, a special servicer that represents lenders in soured loans.

“We want to proactively work with our residents to mitigate the effect of these orders,” Stuyvesant Town-Peter Cooper Village’s managers said in a letter to tenants. “Over the next few weeks, we will be preparing specific proposals to all residents individually that outline how we intend to manage the implementation of these orders.”

‘Retroactive Charges’

Almost half of residents will have no change because of rent-stabilization rules, and the complex’s managers “will seek to reduce the amount of retroactive charges” for long-term tenants, according to the letter.

Kavanagh couldn’t say how many tenants received notices from the state, or what the average rent increases will be. The improvements that were the basis for the application included the installation of electronic key cards and intercom systems, and extensive plumbing work in one building, Kavanagh said.

He and other elected officials, including City Councilman Daniel Garodnick, a tenant at Peter Cooper Village, will convene a resident meeting tomorrow to discuss the rent notices.

Earlier this year, CWCapital sought mid-lease rent increases of as much as 30 percent, asking tenants to start paying the higher rate in the middle of their leases or vacate their units. Tenants who agreed to accept the rent increases began paying the higher rates on July 1.

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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