Cooper Village & Stuyvesant Town: Can’t Quite Walk Away
Posted by Matthew Brian Hersh on February 12, 2010
When Tishman Speyer Properities and Blackrock announced a few weeks back that they would default on their $3 billion mortgage loan, it looked as though the principal owners of New York City’s sprawling, 11,000-unit Cooper Village and Stuyvesant Town would follow the national trend of simply walking away from their mortgage, ceding their loan to creditors.
But walking away is apparently harder than they had anticipated. Reports surfaced yesterday that the owners had to pay roughly $90 million in back taxes before giving control over to lenders. According to Bloomberg News:
Even in foreclosure, any property transfer in Manhattan requires payment of city and state taxes, and Tishman is negotiating with CWCapital, the special servicer for the senior debt, over who must pay them.
Bloomberg quoted Rafael Cestero, New York City’s commissioner of Housing Preservation and Development:
“The reality is they can’t just turn back the keys.”
Tishman and Blackrock purchased the complexes, spread out over 80 acres of Manhattan’s East side and originally built in the 1940s as affordable housing for returning veterans, in 2005 for $5.4 billion — the largest residential real estate transaction in history. The sale sparked an immediate reaction from tenants and advocates, amid owners’ plans to raise rents, “evict illegal occupants and upgrade with amenities including a gym, concierge service and new gardens,” according to Bloomberg, in what was viewed as a threat to some of the last affordable, market-rate housing in Manhattan.
Those efforts, however, were put to rest after tenants won a court challenge claiming that Tishmanhad wrongfully raised rents and deregulated apartments after receiving special tax breaks.