Stuyvesant Town Peter Cooper : Middle Class Squeezed

I saw this all over the news today...

http://www.nydailynews.com/news/story/448248p-377350c.html

A neighborhood goes up for sale

Middle class fears being squeezed out

Reported by LISA L. COLANGELO, JORDAN LITE, PHYLLIS FURMAN, ADAM NICHOLS,
RICH SCHAPIRO and JIMMY VIELKIND
Written by CORKY SIEMASZKO

Two of Manhattan's last surviving middle-class enclaves were threatened with extinction last night after MetLife confirmed it was considering putting Stuyvesant Town and Peter Cooper Village up for sale.


The sprawling developments along the East River were expected to fetch nearly $5 billion, and developers from as far away as Dubai were drooling at the chance to eventually convert hundreds of modest apartments into high-rent havens or condos.

But for the 25,000 teachers and nurses, clerks and cops, and hundreds of retirees who have lived in the plain, brown-brick buildings on the East River for generations — the announcement was a bolt out of the blue.

"We used to say that there were only two ways to move out of here, in a wheelchair to go to a nursing home or in a box, and that was true," said Randy Blackner, 64, who has lived in Peter Cooper for 25 years. "It seems it isn't true anymore."

A sale would not change the status of rent-stabilized units, even if buildings are converted into condominiums, experts said. Any new owner would have to go through the same procedures to make the case to the Real Estate Board of New York before raising rents on regulated units.

Still, civic advocates warned the fabric of Manhattan will be torn forever if "StuyTown" and Peter Cooper are transformed into luxury high rises.

"New York's already losing the war to hold onto the middle class," said Jonathan Bowles, director of the Center for an Urban Future think tank. "The writer, the aspiring filmmaker, the fashion designer — they will go elsewhere. Fifteen years ago there wasn't much competition. Now New York is competing with other cities for creative people."

MetLife, which built the complexes for veterans returning from World War II, has hired CB Richard Ellis as its broker and has already received several "robust" offers for the 110 apartment buildings, which sit on 80 acres on the East Side from 14th to 23rd Sts.

"It's still a process that's ongoing, and we haven't made any final decisions yet whether to sell it or not," MetLife spokesman John Calagna said.

One hitch for potential buyers is that about two-thirds of the 11,232 units are covered under state rent-regulation laws, which limit rental rates owners can charge.

Since 2002, MetLife has removed dozens of units from rent regulation as the leaseholders have died or moved on — making the requisite capital improvements where necessary to justify the rent hikes.

If MetLife sells the buildings, current tenants in rent-stabilized apartments would be protected if the buildings remain rentals — and be offered an insider's price if it goes condo. If they refuse to buy, they can still remain in their apartments under rent-stabilization laws.

"It's not the owner, it's the apartment" that's rent-regulated, said Peter Moses, a spokesman for the state Division of Housing and Community Renewal.

In addition to various pension funds, other potential buyers are real estate titans like Sam Zell and the Dubai-based Istithmar, which has been aggressively purchasing New York office buildings and hotels.

"The prospect of owning irreplaceable real estate in the middle of Manhattan is obviously going to appeal to a broad swath of investors," said Dan Fasulo, director of market analysis for Real Capital Analytics.

"The location of these buildings is premium," added Kathryn Wylde, president of the pro-business Partnership for New York City. "You're talking about extremely valuable real estate."

Donald Trump, however, told CNBC he's not interested. "It will be a heated bid and that usually means somebody will overpay," he said.

Mort Braverman, 82, was one of the original Stuyvesant tenants in 1949, when the rent on his two-bedroom apartment was $73 a month. It's now $900.

"They would love to get us out," he said. "They could probably get four times what we are paying."