We’ve known it was coming eventually—another sale of Stuyvesant Town and Peter Cooper Village.
The Tenants Association has been working diligently for years to try to preempt this process. We have approached CWCapital with our partner, Brookfield, and repeatedly offered them an opportunity to partner with the tenants—and make their bondholders whole in the process. That, of course, is what a special servicer should be looking for.
Rather than engage and allow us access to the necessary information to finalize our offer, CWCapital made excuses while collecting hundreds of thousands of management fees every single month and accruing $90 million in default interest every year.
Now, on Friday, June 13, 2014, CW, as special servicer to the CMBS (commercial mortgage-backed securities) trusts, will foreclose on the remaining junior debt and become the owner, at least for now. They even might turn the property over to their parent company, Fortress Investment Group—and you can bet Fortress has no interest in the long-term affordability of this community.
But even though CW has tried to shut us out so far, the Tenants Association is actively pursuing all possible angles to strengthen the hand of residents during the process of foreclosure and sale. And if appropriate, we will continue to pursue our own bid.
Here’s what we know, what we don’t know, and what we are doing about it.
What We Know
1. CW will attempt to foreclose the junior debt on June 13 and, at least temporarily, become the owner.
2. A number of interested real estate entities have emerged as potential buyers, but in order for them to walk away as the owner on June 13, they would have to pay off the entire first mortgage (plus fees, interest, advances, etc.) within ten days. Once you add it all together, it comes to around $4.7 billion—precisely the amount that Fortress is reportedly interested in bidding.
3. Fortress itself would likely need to come up with $4.7 billion within ten days of June 13 in order to become the owner. That is a lot of money for any potential bidder, and it is generally expected that this process will take longer.
4. CWCapital is expected to transfer the property and not hold it themselves—but they have not disclosed the precise process that they will employ.
5. Our homes are protected by rent stabilization, and that will not change unless the law is not renewed in June 2015. For Roberts residents, their units are covered until the J-51 tax abatement expires in 2020. We have seen no bidder other than the Tenants Association that has any plans to protect the long-term affordability of this community. Most have been determined to turn rent-stabilized units to the market quickly.
6. This transaction is important to the City of New York, and Mayor Bill de Blasio is actively engaged in exploring ways to aid our cause.
What We Don’t Know
1. Whether CWCapital will be compelled to sell ST/PCV to its parent company, or whether they will conduct a full auction process.
2. Whether another lender will try to upend or stall the process set in motion by the foreclosure.
3. Whether Fortress or any other interested buyer will try to raze buildings and/or develop our valued open spaces.
4. Whether CWCapital will continue to shut the tenants out of this process.
5. How or whether the City will intervene in this process.
What We’re Doing About It
1. We are prepared to make a formal bid in an auction, if we believe it can be competitive while still achieving our goals of protecting the long-term affordability of this community.
2. We have engaged with Mayor de Blasio, Deputy Mayor Alicia Glen, and Commissioner of Housing Preservation and Development Vicki Been and asked for their support.
3. We have briefed New York State Attorney General Eric Schneiderman on our situation and shared our concerns.
4. Our councilman, Dan Garodnick, has formed a citywide coalition to fight predatory equity in housing to help add weight to our battle. Fifty elected officials, including five members of Congress—among them our own congresswoman, Carolyn Maloney—have joined.
5. State Senator Brad Hoylman, Assemblyman Brian Kavanagh, and Councilman Garodnick are working on an emergency package of legislation to be introduced at both the city and state level to help protect the long-term stability of communities such as ours.
6. We are preparing to be loud in defense of the interests of the residents of this community. We have organized a tenant rally at City Hall at 10:00 a.m. on June 13—the date of the scheduled foreclosure—to make clear to CW and Fortress and other potential bidders that we deserve a seat at the table. If you want ST/PCV to stay as a place where we can all afford to live, be there with us on June 13.
Ultimately, we can control only what we can control. But we can continue to make sure our voices are heard and try in a thoughtful, aggressive, substantive way to affect what happens when CW forecloses—not just for ourselves but for those who aspire to live here in the future.
Anyone who plans to bid on the property needs to know: we’re here, we’re committed, and we’re not going away.
RSVP to tell us you’re coming and, if needed, to reserve a seat on the bus to and from the rally at stpcvta.org/june13 (you will get a confirmation). Or contact us by phone at (866) 290-9036. The bus can accommodate walkers, rollators, and baby strollers.
Buses leave from 19th Street and First Avenue at 8:45 a.m. SHARP. Estimated return time is 11:00–11:30 a.m.
You may also reach City Hall by public transportation.
Subway: Take the 4, 5, or 6 Lexington subway to Brooklyn Bridge/City Hall, or take the R train to City Hall.
Bus: Take the M103 on Third Avenue to City Hall/Park Row, or from Peter Cooper Village at 23rd Street and First Avenue, take the M9 to City Hall/Park Row (takes longer than the M103).