The judge heard arguments by both sides in CW Capital’s effort to win an injunction blocking the planned auction of the property by Ackman’s Pershing Square Capital Management LP and Winthrop Realty Trust originally scheduled for September 8th. The decision, basically, will determine whether CW Capital or Pershing Square Capital Management and Winthrop Realty Trust will control our community. However, CW was not barred from “noticing” their intent to foreclose (providing 30 days notice as required under federal law) and may do so as soon as tomorrow, September 3.
Whatever the outcome, the Tenants Association remains firm in its objectives: to maintain Stuyvesant Town and Peter Cooper Village as an affordable community into the future, to make it possible for residents to either buy or to remain as renters, to preserve our open spaces, ensure a high level of maintenance, and ensure a stable future, and to preserve the integrity of the property.
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Association president Al Doyle says that CW’s cooperation with the tenants is important. “The tenants are not going away — our goals have to be satisfied in order for any plan to work. Getting CW Capital to recognize that is a serious step forward,” Doyle said. “Our Board of Directors has been working closely with our advisors over the summer on developing our own restructuring plan. CW Capital’s letter supporting our goals helps get us closer.”
CW Capital also proposes regular communication with the Association and its advisors, and to developing a mutually acceptable process for sharing information going forward. Noting the enormous complexities involved in this process, CW stated that they are committed to the smoothest possible transition for the ST/PCV community.
Doyle thanked City Council Member Dan Garodnick for his leadership in bringing about the commitment from CW Capital so the Association can continue in pursuit of its primary goal — to advance the interests of the community’s residents.
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This is another twist in what will surely be a complicated situation. CW Capital, the special servicer of the senior debt, sued Pershing Square and Winthrop in an effort to prevent them from foreclosing on the property, a move they had announced for August 25th.
On Thursday August 19th, Justice Richard Lowe (the same judge who has the Roberts v. Tishman Speyer case pending before him) granted a Temporary Restraining Order, which will keep Pershing and Winthrop from going forward with the foreclosure proceeding until further notice. The Court has scheduled oral argument on this matter for Thursday, September 2nd. Until then, everything remains in status quo.
The Tenants Association is continuing to work with our professional team to be ready to respond to any scenario.
]]>Statement by Council Member Dan Garodnick: “We are disappointed that ownership of the property has degenerated into litigation, but we are not at all surprised. As the creditor parties fight this one out, the tenants are prepared to join with the right partner to help us achieve the goals we have articulated.
“Those goals include: giving tenants an opportunity to buy their units, or remain as renters; protecting long term affordability for future generations of New Yorkers; ensuring quality maintenance services; preserving the historic configuration of the property and keeping open spaces from development; maintaining the property as a single, unified whole; and ensuring a long-term, stable ownership and capital structure.
“As the news of the day pivots from hedge fund managers to lawsuits, it bears remembering that Stuyvesant Town and Peter Cooper Village were built – with considerable assistance from the City and State – to be the model of stable housing. They were designed to be a place where “[f]amilies of moderate means might live in health, comfort and dignity in parklike communities, and that a pattern might be set of private enterprise productively devoted to public service.”[1] They were supposed to be the place where the private sector showed its devotion to public service. The creators of this property would feel no pride in the fact that the home to 25,000 New Yorkers is being treated like a pawn in a financial chess game.
“No matter where this litigation leads, the tenants have a central seat at the table, and are prepared to offer their own restructuring plan. They are working with their professional team at Moelis & Company and Paul, Weiss, Rifkind, Wharton & Garrison in pursuit of a plan that respects not only the residents who live there today, but also those people of moderate means who aspire to live there in the future.
“The tenants continue to be united and committed to seeing the process through to the right outcome. The events of the past two weeks have made even more clear that no future owner can or will be successful without the support and participation of the tenant community.”
]]>The tenants of our community are united. We are committed to the principles we have laid out to determine our own destiny: being able to purchase our homes or remain as renters, preserving long-term affordability, keeping a high level of maintenance, preserving our open spaces, and ensuring that we have a stable future. These are our homes and we will protect them. We will make certain that no outside entity will be able to maneuver around us.
]]>We wanted to give you a sense of what happened, and what will likely occur next. We worked with Councilman Dan Garodnick and our professional team at Paul Weiss and Moelis & Co. to put this summary together quickly and comprehensively.
The quick takeaway: it is not unexpected to see maneuvers like this in a complex restructuring, and it does not change our ability to achieve the goals that we have set out. It also does not affect anyone’s rights as a rent-stabilized tenant. However, it likely means that the restructuring process will become more complicated, and even litigious. We will continue to fight to ensure that the tenants of this community are protected, no matter what scenario unfolds.
As you will recall, our property was sold in 2006 for $5.4 billion—which included a $3 billion first mortgage, $1.4 billion in what is known as “mezzanine” debt, and $1 billion in equity (Tishman Speyer and BlackRock). The property today is now considered to be worth considerably less than $5.4 billion—some estimates have said that it could be as low as $1.7 billion.
Pershing Square Capital recently bought out the portion of the debt that falls just behind the $3 billion first mortgage. This portion is known as Mezzanine 1-3, and was worth about $300 million at the outset. Pershing Square bought it, presumably at a very steep discount, with a goal of foreclosing on the property and becoming the owner—and then likely triggering a bankruptcy to restructure the debt in a way that would ensure them some value.
A notice in the New York Times Business Section yesterday indicated that Pershing Square would be holding a foreclosure auction (a UCC foreclosure) on August 25. If they were to succeed in foreclosing, they would extinguish the rights of all of the other lenders behind them—everyone from the Government of Singapore, to the Church of England, to SL Green, to of course Tishman Speyer/BlackRock.
As you may recall, CW Capital—which represents the interests of the $3 billion first mortgage—already has an order of foreclosure from a Court. That means that they have the right to foreclose, but must give 21 days notice before doing so. If CW Capital were to foreclose on behalf of the $3 billion first mortgage, they would extinguish the rights of all other lenders, including Mezzanine 1-3, which is now owned by Pershing Square.
Confusing enough? We all knew that since Tishman Speyer defaulted, this process was going to be complicated (and may even become litigious). Pershing Square’s action to try to become the owner is clear evidence of that. The one constant in this process will always be the 25,000 unified residents of this community, and addressing our needs is the only route to success.
The goals of the Tenants Association have been clear from the start: maximizing choices for tenants by giving them an opportunity to buy their units or to remain as rent-stabilized tenants if they wish; protecting the community as affordable for future generations of New Yorkers; ensuring quality maintenance services; preserving the historic configuration of the property and keeping open spaces from development; maintaining the property as a single, unified whole; and ensuring a long-term, stable ownership and capital structure.
We have made our goals clear to all applicable parties, and will continue to work to ensure that they are satisfied.
As the creditors wrangle for control, the tenants continue to be united and committed to seeing the process through to the right outcome. We will continue to demand that services be maintained, and will welcome the opportunity to partner with an entity that will satisfy the tenants’ goals. No future owner can or will be successful without the support and participation of the tenant community.
We will continue to keep you updated as we go forward.
]]>A NYLJ article on the case can be found here.
Assemblymember, Brian Kavanagh has released a statement on August 5th, 2010 that can be read here.
Councilmember Dan Garodnick also released a statement on August 5th, 2010 that can be read here.
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Elected to the Board of Directors, now numbering 15 members, are Al Doyle, Julie Ehrlich, Kevin Farrelly, Soni Fink, Jennifer Kops, John Marsh, Judith Preble Miller, Steven Newmark, Virginia Rosario, James Roth, Ann Salzberg, John Sheehy, Susan Steinberg, Helen Thompson and Jonathan Wells.
The Tenants Association’s expanded Board will select new officers at its first meeting later this month. “This election marks an important step for our organization and for all residents,” said current president Al Doyle. “We believe our decision to increase Board membership will enhance our ability to serve Stuyvesant Town and Peter Cooper Village tenants in our current efforts to preserve the character and affordability or our community and to represent their interests actively in the future.”
The Annual Meeting, held at Simon Baruch Middle School 104, had been rescheduled when the number of ballots received by the original date of June 12th fell just short of the necessary quorum of a majority of paid-up members. More than 500 additional ballots — well over the number needed —were returned in response to a second mailing to members who had failed to vote first time around. Each ballot was checked against a master list of eligible members
and counted immediately after the meeting by eight staff members of Merriman River, the professional supervisor overseeing the election.
The certification of the election and the returns can be viewed at the link below.
]]>To assist tenants with the elevator MCI, the Tenants Association distributed a packet of information back in May 2009. It included forms for filing with the Division of Housing and Urban Renewal (DHCR) a Petition for Administrative Review (PAR), together with instructions about how to complete them. If a tenant filed a PAR with DHCR prior to June 1, 2009 then, according to the regulation, they are covered and should not have to pay the “retro” portion of the rent as listed on the rent bill, while the PAR is being adjudicated.
The landlord may argue that it has not received the notification from DHCR and may insist on receiving the full amount of rent (which includes both the “net” and “retro” portion of the MCI) starting with the June 1, 2010 rent bill. Many tenants have decided the bookkeeping will be easier if they pay the full amount. Any tenant who wishes to challenge the retro charge and has a copy of the PAR form filed, can contact DHCR at 1-866-275-3427.
]]>Frequently Asked Questions on Roberts/J-51 Litigation - June 2010
]]>The immediate question that comes to the minds of residents is: “What does it mean to us?” The answer is that it doesn’t change a thing. Tishman Speyer is still the owner of the property and continues to manage it.
The property continues to be protected by rent-stabilization laws and the Federal Court decision does not affect the negotiations between lawyers for the J-51 plaintiffs and Tishman Speyer. The Tenants Association is moving ahead toward our ultimate goal of controlling Stuyvesant Town and Peter Cooper Village and maintaining them as affordable community under a non-eviction conversion that would allow residents to buy their apartments or continue to rent.
A statement by Council Member Dan Garodnick on the foreclosure order follows:
Garodnick Statement on Order of Foreclosure in Stuyvesant Town and Peter Cooper Village
“The tenants of Stuyvesant Town and Peter Cooper Village want to avoid a prolonged legal battle over our homes, and the foreclosure judgment entered yesterday brings us one step closer to certainty. There needs to be a swift and clean process that sets this historic property on a secure footing into the future. The entry of a foreclosure judgment on CW Capital’s unopposed complaint was a natural and expected action, and one that is consistent with tenants’ interests. In the interim, we are moving forward with our own restructuring plan, and expect to work with CW Capital and other stakeholders to ensure the right outcome. Our goal remains the same—a conversion of the property to a non-eviction coop or condominium structure that maximizes choice for tenants to buy or continue renting, ensures long-term affordability, and protects the maintenance of this property—and we are actively putting together the plan to get us to those goals.”
Council Member Dan Garodnick represents Stuyvesant Town and Peter Cooper Village, where he is a life-long resident.
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]]>We regret the long wait between advisories on J-51. The attorneys are not permitted to make public statements while negotiations are in progress so we are forced to wait for formally released information from them before we can update you.
The two sides in the agreement issued the following statement:
June 10, 2010
Joint Statement from Tishman Speyer, Wolf Haldenstein Adler Freeman & Herz, and Bernstein Liebhard
Re: Amy Roberts et al. v Tishman Speyer Properties et al.
“Representatives of the current owners of Stuyvesant Town and Peter Cooper Village and counsel for the plaintiffs, Wolf Haldenstein Adler Freeman & Herz LLP and Bernstein Liebhard LLP, agreed today to again extend the interim agreement they reached last December to adjust rents in each apartment affected by the recent Court of Appeals’ decision in the Roberts litigation. Under the extended agreement, affected tenants will continue to pay the lower of either their lease rent or an estimated rent-stabilized rent through the month of December 2010. Each affected tenant will also continue to be afforded certain rights as if pursuant to the Rent Stabilization Law, including renewal and succession rights. The agreement will also extend the stay of litigation between those parties through December 15, 2010, although either side will have the right to terminate the stay after September 15, 2010.
“An independent consultant, retained in March, will continue with a unit-by-unit historical rent analysis over the next two to three months, and the parties expect that the matter will be resolved through good faith negotiations before the end of this year.”
Frequently Asked Questions on Roberts/J-51 Litigation - June 2010
]]>The answer to the first question is simple: Any conversion plan that the Tenants Association would agree to would absolutely provide that renters be able to continue to rent if they wish. The big plus for renters, as we see it, is that in a conversion plan to which the Tenants Association is a party, tenants (as distinguished from owner residents) would have a compassionate landlord whose first priority is not profit.
As to the different characteristics of condos vs. coops, our attorneys have provided a readable, non-legalese explanation. You can read it in the Frequently Asked Questions document in our Knowledge Base: “Differences Between A Coop and A Condo” at the link below. If that’s not enough information for you, included in the FAQ is a link to the New York State Attorney General’s Cooperative and Condominium Conversion Handbook.
]]>Tenants Flex Muscles
Tenants groups in New York are notoriously disorganized, but that isn’t true about the one representing tenants of Stuyvesant Town and Peter Cooper Village.
The apartment complex is the focus of one of the most high-profile defaults in the commercial-property downturn.
With an eye toward joining a bid for the property, the tenants group has lined up some big names as advisers, including white-shoe law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP and financial advisory Moelis & Co.
Residents in more than half of the 10,500 occupied apartments have signed “unity pledges” to give the group their backing, as it pursues a plan that could allow residents to buy their units at discounts or remain as rent-stabilized tenants.
The tenants group has met with more than 40 potential partners and lenders to come up with a bid. The property is being turned over by a partnership led by Tishman Speyer Properties and BlackRock Inc. to creditors after it defaulted on $4.4 billion in debt.
“As we build support for a tenant-led plan, many of the major players in real estate and finance are seeking to partner with us,” said New York City Councilman Dan Garodnick, who lives in the complex.
By Lingling, Wei
]]>DECEMBER 6, 2009
Three years ago, Tishman Speyer Properties, L.P. and BlackRock Realty Advisors bought Stuyvesant Town and Peter Cooper Village for $5.4 billion, premised on the notion that they could quickly turn rent-stabilized apartments to the market. They engaged in aggressive tactics toward tenants, including serving legal notices on many long-time, perfectly legitimate people who had lived in the community for a generation. We fought back at every turn, and they did not achieve their goals.
Today, the property is worth less than $2 billion, and the Court of Appeals in Roberts (J-51) v. Tishman Speyer last month re-regulated all of the apartments that previously had been rented at the “market rate.” On November 6, Tishman and BlackRock turned the loan over to mortgage servicer CW Capital. According to the Fitch ratings agency, the property doesn’t produce enough income to pay the debt and a reserve fund probably will be depleted by year-end. It is well understood that Tishman and BlackRock need to restructure their debt, as the property verges on default.
The tenants of this community believe that their interests should be protected. In light of the fact that a considerable portion of the senior debt in this transaction is owned by Fannie Mae and Freddie Mac – two government-owned companies charged with protecting affordable housing, and bailed out by considerable federal taxpayer funds – there is also a public responsibility to do so.
Any plan supported by the Tenants Association and local elected officials, including a tenant-initiated bid, will need to significantly protect the affordability of the community for both current and future tenants. It will also need to ensure a proper level of maintenance and protect the configuration and unity of the Property.
We welcome scenarios which create long-term affordability on the property, either through a model of home ownership and/or permanent rent protections.
The lack of funds for maintenance can cause deteriorating conditions in a community. The tenants of Stuyvesant Town and Peter Cooper Village wish to avoid a reduction of service by ensuring that adequate funds are set aside for the purpose of maintenance. We will want to see a clear plan for achieving day-to-day maintenance, as well as a 5 – 10 year plan for all operational needs.
There are efforts underway to secure landmark status for Stuyvesant Town and Peter Cooper Village. Tenants will oppose efforts to develop on open spaces. We believe that the historic configuration of the property should be protected.
Stuyvesant Town and Peter Cooper Village were built for veterans returning from World War II. Its buildings are the iconic post-war development for middle-income families who wanted to build a life in New York City. We believe that there should be no legal distinctions made between Peter Cooper and Stuyvesant Town. They are, together, one community, and should stay that way.
The tenants of Stuyvesant Town and Peter Cooper Village want to work to preserve this community as affordable housing, with adequate maintenance and robust open spaces, where people at the middle of the income spectrum can live and raise a family in peace and safety. We believe that any future owner of this property must respect the principles set forth above, and we look forward to finding the right partner to achieve our goals.
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