Rally to Save Stuyvesant Town's Cheap Apts

Stuyvesant Town-Peter Cooper Village tenants, along with a slew of elected officials and affordable housing advocates, are rallying in front of City Hall on Friday to demand protection for thousands of affordable housing apartments if the massive complex is sold.

"We’ve seen property change hands once, and it was a very big mess for tenants," said City Council member Dan Garodnick, who lives in the complex.

The approximately 11,000 unit complex sold in 2006 to Tishman Speyer and Blackrock for $5.4 billion. "The owner took out so much debt, that the business plan was designed to raise rents as fast as possible. How? By getting rent-stabilized tenants out," said Garodnick.

But the owners defaulted when the market crashed.

But another new owner, CWCapital Asset Management, which managed the debt, took title to the property last week. At first, it announced it would foreclose on the debt, which would have allowed the property to be resold, perhaps at a frantic pace. Which means the affordable housing would have been at risk.

But the city worked hard to avoid that scenario, said Deputy Mayor Alicia Glen.

She also worried that the foreclosure process wouldn't seem transparent.

The de Blasio Administration has a goal to create or preserve 200,000 units of affordable housing over the next decade. So it's important to the city to save the approximately 6,000 affordable units left at the complex.

One route to that end game would be to structure a deal that would allow the owner to receive, in this case, a tax exemption for the sections of the property subject to affordable housing restrictions; in return, the owner would be required to keep those units restricted and affordable for about 40 years.

But the deal could take longer than the city hopes.

"To think this is going to happen next week or the week after is pretty aggressive," said Manus Clancy of real estate data and analytics firm Trepp LLC. He expects a new buyer won't emerge until the end of this year or the beginning of 2015.