Stuyvesant Town Tenants Rally to Preserve Affordability

Residents of Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, rallied at City Hall today to keep rents affordable and give tenants a chance to buy the property as it is prepared for a sale.

Hundreds of residents, joined by local officials including U.S. Senator Charles Schumer, called for inclusion in the sale process of the 80-acre (32-hectare) community. The tenants association is working with Brookfield Asset Management Inc. for their own bid on the complex, home to about 30,000 New Yorkers.

CWCapital Asset Management LLC, which has been managing Stuyvesant Town on behalf of bondholders since its owners defaulted on a $3 billion mortgage in 2010, last week took the title to the property and has indicated it will put it up for sale. Schumer and New York City Mayor Bill de Blasio, who has made affordable housing a key issue for his administration, are stepping in to try to sway the process to a bidder that won’t push through steep rent increases.

“We have a chance to sit around the table with an engaged mayor and a special servicer that has obligations to its bondholders,” New York City Councilman Daniel Garodnick, a lifelong Peter Cooper Village resident, said in an interview. “We will impress upon them that they have obligations to the city of New York as well, and we’re going to have that conversation now and try to address it before the thing goes up for auction.”

Brian Moriarty, a CWCapital spokesman, declined to comment.

Sale Nears

CWCapital is planning a sale four years after Tishman Speyer Properties LP and BlackRock Inc. defaulted, hurt by the financial crisis and thwarted plans to raise costs for rent-regulated units. Private-equity firm Fortress Investment Group LLC, which owns CWCapital, had been seeking financing for a potential bid on the 11,000-unit complex, a person with knowledge of the matter said last month.

The tenant group’s plan with Toronto-based Brookfield, first announced in 2011, involves converting some apartments into condominiums as a way of paying off bondholders.

De Blasio has been in talks with CWCapital and tenants to create a deal that would preserve “thousands of middle-class units,” according to a statement today from the tenants association. Schumer reached an agreement with Fannie Mae and Freddie Mac that would prevent the mortgage-finance companies from investing in a deal that would undercut affordability, he said in the statement.

Cutting Off

“The fact that Fannie Mae and Freddie Mac listened to our call and said that they will not participate in a deal that is not blessed by the city and by the tenants is very important,” Garodnick said. “That cuts off the oxygen to a lot of the bidders out there, who do not have affordable housing in mind.”

Susan Steinberg, chair of the tenants association, has lived in the development since 1980. She said the quality of life and cordial relationship with her landlord has recently deteriorated and wants tenants to have a chance to control their own destiny.

“We’re extremely nervous,” Steinberg said. For some buyers, “it’s the bottom line, not the human element. They’re going to be looking to recoup their investment by kicking as many long-term stabilized renters out as possible.”

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