March 2010 Archives

Via The New York Times

Via Town & Village

Via The Wall Street Journal

Oh, it's that time of year again. The days are getting longer, the weather is getting warmer, and the Stuy Spies are once again out with their cameras. It's Spring...but you'd never know it in Stuyvesant Town!

Dear Styuvisant Town Residots,

Image & tip courtesy of EV Grieve

With the Stuyvesant Town Blockbuster closing soon, local residents are saddened by the sudden loss of mediocre movies the chain store proudly peddled. With no other video rental stores nearby, residents fear the worse and may have to start leaving their apartments more regularly.

10:30PM, photos via a Stuy-Spy

Via The Stuyvesant Town-Peter Cooper Village Tenants Association

The Stuyvesant Town-Peter Cooper Village Tenants Association introduced its outstanding team of legal and financial advisors to residents on Saturday afternoon, March 13th.  With an overflow crowd jammed into the 1,100-seat auditorium of Baruch College despite wild rain and dangerously high winds, the audience heard solid presentations of the complicated issues involved in reaching the Association's goal of taking control of the property while providing the most options for residents.

Attorneys from the legal firm of Paul, Weiss, Rifkind, Wharton & Garrison put into layman's language the dizzying layers of debt structure and how they may play out.  The financial brains at Moelis & Company explained their role and said they will hold informational seminars for residents as the restructuring plan proceeds.

Speakers for both organizations were firm one point -- the absolute necessity for tenants to stick together and act as a single, united force in order to achieve success.  In response, hundreds of attendees handed in their signed Unity Pledges as they left.  (This is a good time to remind you to sign and mail in your Unity Pledge if you haven't already done so.)

Continue reading "Do we Have a Chance at Ownership?" @ stpcv.org

Via Reuters

CWCapital, which has moved to foreclose on the sprawling New Yock City apartment complex of Stuyvesant Town/Peter Cooper Village, may itself be sold.

In another twist for the huge real estate failure, Canadian pension fund advisor Caisse de depot et placement du Quebec has decided to sell its controlling interest in CWCapital, the special servicer on the property, according to Commercial Mortgage Alert.

CWCapital said only that it is looking for a new investor, when asked by Reuters for comment.

"It certainly introduces an additional piece to an already complex situation," Alex Rubin, managing director of Moelis & Co, the financial advisors hired by the Stuyvesant Town/Peter Cooper Village Tenants Association.

The development comes as the tenants association prepares to put together an offer that would allow tenants to either stay as renters or buy their apartments.

The association's lawyers and financial advisors have said that they have received unsolicited calls from investors who want to partner with it.

Rubin was among the politicians, lawyers, investment bankers and tenants association representatives who on Saturday briefed more than 1,100 residents on plans being formulated by the tenants association to buy the complex in lower Manhattan.

A sale to tenants association could happened within three to six months, William Derrough, Moelis' managing director, told the residents.

With 25,000 residents and 11,200 apartments, the crowd represented more than one in 25 tenants of middle-class complex.

The Stuyvesant Town / Peter Cooper Village Tenants Association held a meeting this past Saturday to discuss the future of Stuy Town and Peter Cooper Village and the possibility of the TA placing a bid to purchase the property. One of Lux Living's regular readers, "Green Girl", was kind enough to take meticulous notes for those who were unable to attend the event. MANY thanks to her!

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The meeting was very well organized, well run, and speakers were held to time limits. There was a new format for questions from the audience: We were asked to write questions on a questionnaire before the meeting began. The questions were read out according to speaker by someone onstage after the speaker's presentation.

In text below, my comments are in square brackets. Anything enclosed in quotation marks is a direct quote, although much of the notes are direct transcriptions. This is not a word-by-word transcript, but it does reflect most of what was said during the three-hour forty-five-minute meeting. Rumors, hearsay, etc. were dealt with subtly by the speakers (e.g., Susan Steinberg said the survey we received under our door was not the TA's survey.)

Speakers (in order): Susan Steinberg, Dan Garodnick, John Marsh, Brian Kavanagh, Alan Kornberg (Paul, Weiss), Meredith Kane (Paul, Weiss), Bill Derrough (Moelis & Co.), Bill DeBlasio, Carolyn Maloney, Scott Stringer, Rafael Cestero, Adam Rose, Alex Schmidt.

Present but not speaking were Christine Quinn, Liz Krueger, representatives from Tom DiNapoli (state comptroller), Andrew Cuomo, and Kirsten Gillibrand.

While hurricane force winds blew through the city this weekend, is was Hurricane Tish-Spey that left the biggest mess. A Stuy Spy sent us these photo of an apartment that management had emptied post-haste. The building's maintenance men left the furniture scattered outside where it was in good company with the mountains of dog feces and used condoms that litter the grounds. Quaint!

Hey new people. It's great that you want to show your neighbors what a dick you are by leaving your garbage in the lobby, but at least have the intelligence to remove the mailing labels that have your name and apartment number on it. 

Via the ST / PCV Tenants Association

The Stuyvesant Town / Peter Cooper Village Tenants Association, which recently announced that it is actively pursuing a tenant-sponsored restructuring plan, is taking another significant step towards that end, finalizing plans to retain Moelis & Company as exclusive financial advisor.

The move would put the Tenants Association on equal footing with the various creditor constituencies, hedge funds and major real estate interests that have an existing interest in, or will otherwise seek to gain control of the complex.  Moelis & Company has advised many high-profile clients involved in some of the largest restructuring transactions around the world.

"We are very happy to welcome Moelis & Company to our team and to benefit from the decades of experience their professionals bring," said Al Doyle, president of the Stuyvesant Town / Peter Cooper Village Tenants Association.  "We are confident that Moelis & Company can help protect the tenants' interests by offering us the financial and strategic advice needed to come out on top of this complex restructuring."

"We are pleased to have an opportunity to work with the Tenants Association to provide strategic advice and solutions at this important stage in the restructuring process," said William Derrough, Co-Head of Recapitalization and Restructuring at Moelis & Company. "We believe we bring extensive real estate sector and restructuring expertise to the benefit of the Tenants Association."

As with the retainer of law firm Paul, Weiss, the Tenants Association will not be responsible for the payment of Moelis & Company's fees.

Representatives from Moelis & Company will be present to participate at a Tenants Association informational meeting this Saturday, March 13, at Baruch College.

About Moelis & Company

Moelis & Company is a global investment banking firm that provides financial advisory services and capital raising solutions to clients in connection with mergers and acquisitions, restructurings and other strategic matters.  The firm also manages investment funds that integrate capital with its advisory expertise.  With over 280 employees, Moelis & Company serves a broad client base through its offices in New York, Boston, Chicago, London, Los Angeles and Sydney.  For more information, please visit www.moelis.com.

Via The New York Post

A woman dropped her gym bag on the tracks of a crowded Upper East Side subway station yesterday -- then made the fatal decision to jump after it as screaming straphangers watched in horror.

The 48-year-old victim was crushed by a northbound No. 6 train barreling into the 77th Street Station below Lexington Avenue as she tried desperately to claw her way back to the platform.

"She had one choice to make and seconds to make it," said Alfonso McGruder, 55, of The Bronx, who witnessed the tragedy. "She didn't make the one that would have saved her life.

The woman who was fatally struck by a northbound 6 train yesterday dropped this bag on the tracks and attempted to retrieve it before she was killed.

"She tried to go under the platform because the train was bearing down on her. Then she tried to climb onto the platform, but she couldn't do that. Then she just froze."

Rose Mankos lost her life trying to retrieve a nylon LeSportsac bag filled with exercise clothes, toiletries and her cellphone, sources said.

"People were yelling at the lady on the tracks when they saw the train coming," said Hakeem Nhl, 53, a vendor on the opposite platform. "People were screaming, 'Oh, my, God! Oh, my God!' "

Witnesses reported that the train operator sounded his horn eight times and attempted to brake.

"I think she just went into shock knowing that the train was seconds from hitting her. It looked like she just gave up," McGruder said.

Mankos died as soon as she was struck at around 3:45 p.m.

"You could see some woman with her head stuck in between the train [and the platform] and her arms sticking out," recalled witness Andrew Pistella, 30. "Some guy was screaming, 'Is this real? Is this real?' It looked like a mannequin."

It was bedlam on the platform, with children, teenagers and old ladies shrieking hysterically, witnesses said.

"Who drops their [bag] down there, then jumps down there to get it?" Pistella asked.

Onlookers shouted for Mankos to lie down between the tracks or under the platform -- perhaps thinking of "Subway Superman" Wesley Autrey, who saved a fallen passenger by climbing atop him in the trough between the tracks as a train rolled over them in 2007.

"I felt the thud when the train hit the body," said Glenda Farr, 52, who was on the train. "I didn't know it was a body. I lived upstate. You ever hit a deer or something? It was like that."

A neighbor said Mankos lived alone in her Stuyvesant Town apartment.

NYC Transit spokesman Paul Fleuranges said, "The message to our customers is clear: If you drop something on the tracks, do not attempt to retrieve it. Alert a transit employee or a police officer."

Meanwhile, cops were investigating a separate incident in which a 50 year-old man was struck and killed by an eastbound No. 3 train at the Utica Avenue station in Brooklyn.

Woman fatally struck by train after jumping on tracks to retrieve bag [NY Post]

Related

Police Identify Woman Killed by Subway Train [NY Times]

Via New York Post

The Tenants Association at beleaguered Stuyvesant Town-Peter Cooper Village is is handing out documents asking residents to pledge their support to whatever action to association takes to gain control of the 80-acre property.

The agreement asks the complex's 25,000 or so residents to agree to two things. First, that they "designate" the board of the StuyTown tenants association to "make efforts to negotiate on behalf of the tenants and to protect (their) interests." Secondly, that tenants give the association "the opportunity to present me with a plan for my consideration" prior to the tenant making any moves to buy their apartments.

The agreement is creating a lot of hubbub in the halls of the historic apartment complex, with neighbors asking each other what to do, sources say. Some tenants are refusing to sign until they hear the TA's plan of action, which should be revealed this Saturday during a meeting at Baruch College.

"They want us to follow their lead, but I don't know what their lead is," said Jonathan Turkel, a long time resident. "I could be following them off a cliff for all I know."

Other tenants say they don't want to sign anything that might bar them from going forward with plans to buy their own apartments, and are seeking more information about this point before putting ink to paper. Even though the documents specify that it's not legally binding, the language alone is making people nervous, sources say.

Stuy Town Tenant Leaders to Residents: Sign Here [NY Post]

Via Fortune

Whether it's steel, textiles, or auto manufacturing, Wilbur Ross has built a lucrative career finding gold in industries left for dead.

He did it first at Rothschild, and since 2000 at his own investment fund, WL Ross & Co. To cite just one example, Ross bought bankrupt steelmaker LTV for $325 million in 2002, and sold it for $4.5 billion two years later.

As the economy continues to struggle, Fortune's Katie Benner sat down with the master of distressed investing to hear where prospects can be found in this turbulent time.

Where do you think the biggest opportunities are now?

There are deep value opportunities in insurance stocks, which were beaten down because of their exposure to the subprime crisis, annuities, and commercial real estate. I won't name names, but some well-managed life insurance and fire and casualty companies will come through this stronger. They used to trade at one or two times book value but now trade at three-quarters book.

Regional and subregional banks still have a lot of issues to resolve, and they have enough commercial real estate assets on their books to make most of them insolvent on a mark-to-market basis. Of course, they won't all mark their assets to market and their loans won't all go bad. But another several hundred banks will fail before we get through this cycle. We just bought Bank United in Florida for $925 million, and the FDIC is providing about $4.9 billion in assistance.

I still like TIPS (Treasury inflation-protected securities), and I think a big opportunity is coming in the municipal bond market. Even if it doesn't default, some state or local government will come close enough to scare everyone to death. That will be a wonderful buying opportunity.

And as one of the public-private investment managers for the Treasury, we have been buying lots of residential mortgage-backed securities. The price often more than discounts the problems that are ahead. After another year or so of property value declines I think that market will stabilize along with the securitization market. Securitization is a fundamentally sound idea, even if it was poorly executed.

How can we fix the securitization market?

No one had skin in the game. That's where things went wrong. My proposal then is that everyone has skin in the game. Ratings agencies' fees and compensation should be paid over time and depend on the enduring quality of the rating. Employees at banks and brokerages should have their compensation tied to the long-term success of their products. If a trader is paid a big bonus for a portfolio that turns out to be a disaster a year later, did he really earn the money he was paid?

What about commercial real estate? There are reports that you want to buy the near-bankrupt apartment complex Peter Cooper Village/Stuyvesant Town in New York City.

At some point commercial real estate will become very interesting, but not yet. The declines in value are not over. Stuyvesant Town is an early indicator of what's to come -- it's a poster child for the mistakes made during the boom -- and we are interested in it.

In the original deal for the complex, the financing was predicated on the idea that the apartments would no longer fall under rent control and that they would start generating a lot more cash. That never happened. There were also 11 tiers of mezzanine debt on the complex, which probably have no value. The debt was distributed into six or so commercial mortgage-backed securities that were sliced up and sold to investors.

So there's a huge pile of paper out there that is very affected by this deal. At some point these securities will fall in value enough to be attractive. But at the moment the prices don't reflect the problem environment that we see.

Continue reading "Mr. Distress is Ready to Buy" @ Fortune

While perusing Crain's today, a Stuy-Spy noticed an "NYC Job-Loss Meter" which credits Tishman Speyer's red brick albatross for 115 newly unemployed people. No word if a severance package was offered before the cloven hooves kicked them to the curb in a cloud of sulfuric smoke.

Via CNBC.com

Via US REO Properties

Stuyvesant Town and Peter Cooper village complexes are in trouble.

One hedge fund entity has taken over a major share of their debts and is now trying to take over control. This step will create snarls in an already complex financial and political set up involving the biggest apartment units in Manhattan. 25,000 tenants are apprehensive about their fate in the future.
Tishman Speyer Properties and BlackRock Realty purchased the two - Stuyvesant Town and Peter Cooper Village for a hefty sum of $5.4 billion. But when the owners started to lag behind on their mortgage payments they decided to hand over the estates to the lenders.

A hedge fund of New Jersey, Appaloosa Management is headed by David Tepper. Papers have been filed last Tuesday (23rd February) by it in the USA District Court throwing a challenge to the firm that oversees the two spacious complexes overlooking East River. The suit was filed representing the lenders. It was stated that the firm had "irrationally and imprudently" been following a path that would cause hundreds of millions of loss for the debt holders.

Appaloosa intervened objecting to a decision taken by the firm - CW Capital Management to foreclose on the owners of the two estates. The argument was that a foreclosure would involve a cost of nearly $200 million for transferring of taxes. Appaloosa said that if CW Capital had pushed the borrowers into bankruptcy the need for paying those taxes would not have arisen.

Appaloosa has wanted the permission of the court to intervene in this issue. It has also stated that CW Capital being both the servicer of the mortgage and a major debt holder has "irreconcilable conflicts of interest."

Continue reading "Stuyvesant Town and Peter Cooper Village Complexes are in Foreclosure Trouble" at USREOPoperties.com

Via GlobeSt.com

By now the tale of the failed Stuyvesant Town/Peter Cooper Village deal is well known. Bought for a record $5.4 billion in 2006 by a JV of Tishman Speyer and BlackRock Realty, the 110-building, 11,200-plus-unit residential property is one of Manhattan's premier residential complexes.

Yet the economy and legal challenges threw a kink into the buyers' plan to bring the complex's units from stabilized to market rates. As a result, the property's cash flow remained too low to cover debt-service obligations. By year-end 2009, the Tishman-BlackRock JV had not only gone through its $400-million debt-service reserve but also a nearly $200-million general reserve.

What was to be the final blow came when the New York State appeals court ruled that the JV and its predecessors had improperly deregulated and raised rents on thousands of units at the complex. Not only was the further conversion of more units halted, but the court also found that the tenants were due some $215 million in rent rebates.

Now valued at some $1.8 billion--a 67% decline from its price at the peak of the market--the property was severely underwater on its mortgage. In January, the Tishman-BlackRock JV said it would be handing the keys to the complex back to the lenders after being unable to negotiate a restructuring of its debt that would maintain its ownership. The ownership stake was also why Tishman bowed out of managing the property; special servicer CWCapital has since hired local firm Rose Associates.

Calls made to CWCapital were not returned. BlackRock deferred comments to Tishman, which would not comment beyond its Jan. 25 joint statement announcing its intention to transfer control of the complex to its creditors.

Continue reading "The First of the Worst" @ GlobeSt.com

Via CityHallNews.com

Members of the Assembly are moving quickly to kill a proposal by State Sen. Pedro Espada that would freeze rents in New York City for as many as 750,000 tenants.

According to tenant activists, the Espada bill would amount to a get-out-ofjail-free card for landlords.

The bill would allow landlords who illegally deregulated thousands of apartments while receiving special tax breaks to keep those units at market rate by simply paying back the benefits. A landmark court ruling last year found that the owners of Stuyvesant Town and Peter Cooper Village had improperly collected what are known as J-51 tax breaks while converting thousands of apartments to market rate. In the months since the ruling, tenants at buildings from Harlem to TriBeCa have filed suits to claw back millions in rent increases.

Espada's bill would nullify those suits, saving landlords millions.

Continue reading "Landlords Look To Build Support For 'Rent Freeze' Bill In Wake Of Stuy-Town Ruling" @ CityHallNews.com