De Blasio Inflated Affordable Housing in Stuy Town Complex Sale, Report Says

Stuy Town and the neighboring Peter Cooper Village make up the largest housing complex in Manhattan, boasting over 11,000 apartments. In 2015 de Blasio’s administration made its single largest deal, offering $220 million in taxpayer subsidies to Blackstone Group LP, who would buy the massive complex for $5.3 billion.

Mayor de Blasio’s administration is being criticized for getting the shorter end of the stick in a major deal it made in 2015. The Independent Budget Office, the city’s budget watchdog agency, has found that the Mayor’s office inflated the affordable housing benefits in the case of Stuyvesant Town complex.

Stuy Town and the neighboring Peter Cooper Village make up the largest housing complex in Manhattan, boasting over 11,000 apartments. In 2015 de Blasio’s administration made its single largest deal, offering $220 million in taxpayer subsidies to Blackstone Group LP, who would buy the massive complex for $5.3 billion. In exchange for the incentives, Blackstone would agree to restrict rents for 5,000 of its apartments for at least 20 years. That would bring the city 100,000 “apartment-years” of affordability.

As reported by the NY Daily News, the budget agency has reported that the calculation was inaccurate and the enormous subsidies only resulted in 36,000 apartment years of affordability. The remaining 64,000 years can’t be credited to the deal because that housing would have remained rent stabilized regardless of the agreement, says the report. Irrespective of the deal, 1,800 of the apartments would have remained rent-stabilization for the next 20 years. The Mayor’s office, however, claimed credit for all 5,000 and added them up towards his pledge to build or preserve 200,000 affordable homes.

“This was the biggest preservation deal done. We’ve put in $220 million, and it doesn’t look like we’re getting, based on our estimates, as much as the city had intended,” says Doug Turetsky, IBO Chief of Staff. “Only about a third of the affordable housing can be chalked up to the deal.” In the arrangement, the city gave the buyer $76 million in waived mortgage recording tax, and a $144 million interest free loan, which will be forgiven completely within 20 years. The de Blasio administration also agreed to help allow the landlords to profit from the sale of the complex’s air rights.

The de Blasio administration disputed the IBO’s report. “We strongly disagree with it,” said Eric Enderlin, the current president of the Housing Development Corporation and one of the deals negotiators. He said that in exchange for the $220 million spent by the city, residents will save $505 million in rent, in comparison to what they would have paid if the deal weren’t made.

Susan Steinberg, President of the Stuyvesant Town-Peter Cooper Village Tenants Association, sided with the city. She said tenants worried the landlord would harass residents to leave and give up their rent stabilized apartments, if it hadn’t been for the city’s interference. “We could have expected more aggressive and unscrupulous ways to get people out of their rent-stabilized units,” Steinberg said.

By: Hellen Zaboulani

 

 

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COMMENTS
  1. If the Tenants Association hadn’t been asleep at the switch and had been more aggressive with CW Capital, the former special servicer of the mortgage who sold the complex to Blackstone, the tenants would have control over the complex and there would be much less pressure on the complex, the community and upward pressure on rents. But no, they claimed that CW Capital “wouldn’t talk to them,” so there was no way of forging a deal. They claim that CW Capital didn’t want to sell the complex to the tenants, which can’t be accepted as anything but a bunch of malarky. Money is money. This was the weakest, most anemic excuse possible, and if they really truly believe there was no way to get into CW Capital, they are a bunch impotent, incompetent boobs. It’s staggering how much time they had to accomplish a sale to the tenants and how they squandered it, and then declared “victory” for the tenants when this sale was hastily announced and completed. They’re pretty much useless.

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