Thursday, October 22, 2009

More Drama at cash strapped Stuy Town

Tenants win big in rent-stabilization ruling against Stuy Town owners | The Real Deal | New York Real Estate News

Jerry Speyer, founder of Tishman Speyer, owner of Stuyvesant Town and Peter Cooper VillageThe New York state Court of Appeals ruled today that the owners of Stuyvesant Town and Peter Cooper Village should not have deregulated the rent-stabilized apartments in the 11,000-unit complex, because the firm had been receiving tax breaks for renovations at the time. Nine tenants charged in a suit that the owners, Tishman Speyer Properties, BlackRock Realty, and the former owner, Metropolitan Life, had illegally increased rents on one quarter of the units to market rates. The decision, which upholds a March ruling by the Appellate Division of the State Supreme Court, could have sweeping effects on landlords across the city. Half the city's apartments are currently regulated, and the defendant argued that the decision would set a precedent against deregulation of rent-stabilized apartments that would be financially unbearable for building owners. The decision also means Stuy Town's investors, who are already strapped for cash on the $5.4 billion project, could be forced to pay $200 million in rent overcharges to tenants whose apartments were illegally deregulated. Even before that expense, the company is reportedly in danger of default on its loans for the complex. TRD

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