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Thread: starrett city sale

  1. #1

    Default starrett city sale

    I thought this might be worth its own thread.
    WENDIE 99
    Last edited by investordude; April 13th, 2011 at 06:19 AM.

  2. #2


    Why do I get the feeling that Starrett's gonna end up the same as Parkchester in the 80s....go condo, but let renters stay put and give them the opportunity to buy at below market rates?

  3. #3

    Cool Starrett City - Spring Creek Sale

    As far as I know this is Mitchell-Lama and the proposed sale is for $1.3 billion to a shady concern. If nothing else, it is said that the potential new owners will come in, displace the fixed-income residents who have lived at Spring Creek since it opened by raising the rents to "market value". A large portion of people who reside at Spring Creek are elderly/retirees and whose apartments are rent controlled.

    There oughtta be a law.....

  4. #4


    February 17, 2007

    Cuomo Says Investor’s Past May Stop Starrett City Sale


    The new state attorney general says he has unearthed a “sordid legal history” that could scuttle the $1.3 billion sale of Starrett City, the vast housing complex on Jamaica Bay, to a Brooklyn investment group.

    The investment group led by David Bistricer won the bidding this month for the 5,881 apartments in 46 towers at Starrett City, the nation’s largest federally subsidized housing complex, touching off a political storm.

    Tenants, housing activists and elected officials fear that anyone paying such a lofty price would be forced to raise rents and evict tenants to make it work financially.

    Attorney General Andrew M. Cuomo told federal Housing Secretary Alphonso Jackson at a press conference at Starrett City yesterday that Mr. Bistricer had a “long and troubled history of tenant abuse” in the city.

    Under a 1998 court order obtained by the attorney general’s office, Mr. Bistricer was barred — for life — from converting rental buildings in New York to condominiums or co-operatives because of financial improprieties.

    He was also required to make $450,000 in restitution to tenants in two Brooklyn buildings and pay the attorney general $50,000.

    Mr. Cuomo, a former housing secretary in the Clinton administration, said the attorney general’s office would enforce the lifetime ban on Mr. Bistricer, thereby limiting his ability to raise new revenue at Starrett City. More important, he said, the court action may provide the legal grounds for the federal Department of Housing and Urban Development to reject Mr. Bistricer’s application to buy the 140-acre complex, which is wedged between Canarsie and East New York.

    “Enforcement of this injunction may very well kill this ill-conceived deal and protect the tenants of Starrett City,” Mr. Cuomo said in a statement.

    A law firm for Mr. Bistricer’s group, Clipper Equity L.L.C., said the 1998 court order had been subsequently modified to allow Mr. Bistricer to convert the former New York Telephone Building near downtown Brooklyn into a condominium. The firm expressed confidence that Secretary Jackson would approve the deal when all the issues are fully reviewed.

    Ilyse Fink, a spokeswoman for Clipper Equity, said in a statement last night, “We remain committed to moving forward and completing the transaction to purchase Starrett City, and we remain absolutely committed to protecting long-term affordability.”

    Mr. Cuomo’s announcement brought cheers from the Starrett tenants at the event — part news conference, part rally — at St. Lawrence parish hall and added to an already stormy political climate that could scare away Mr. Bistricer’s lenders, even if the court order is not enough to kill the deal.

    Mr. Jackson, the housing secretary, told the audience that the pending transaction threatened New York’s low-income housing market. Mr. Jackson said that he would scrutinize all the information concerning the deal and issue a decision within two weeks.

    Under federal law, the Department of Housing and Urban Development can consider a purchaser’s background before approving or rejecting a new owner at a project like Starrett City.

    Senator Charles E. Schumer, who also attended and was instrumental in obtaining federal aid for Starrett City as a congressman in the 1980s, vowed that “this sale will not stand.” Mr. Schumer said the federal government intervened three times to save the complex since it opened in 1975.

    It is unfair, he said, for either the current owner, or a new owner, to attempt to cash in on the complex today.

    Martin J. McLaughlin, a spokesman for the current owner, Starrett City Associates, a group led by Disque Dean, declined comment.

    Mr. Bistricer has told officials that he has no plans to oust existing tenants at Starrett City, although he would like to build condominiums and subsidized rental housing on vacant parts of the property.

    Senator Schumer said yesterday that “there is no way a developer can make this work without massive evictions and massive rent hikes.”

    The gathering yesterday was the latest illustration of how the issue of affordable housing in New York City is gaining political potency.

    Despite a residential construction boom in recent years, the vacancy rate remains very low and rents are soaring.

    Last year, Metropolitan Life Insurance Company sold Stuyvesant Town and Peter Cooper Village, two adjoining housing complexes that had served as a haven for generations of firefighters, nurses, Con Ed workers and other middle-class New Yorkers, for a record-breaking $5.4 billion.

    The reaction from many state and city officials was relatively muted. But most elected officials have joined in the outcry over Starrett City from tenants and activists from Acorn, a community building group. Representatives Edolphus Towns and Anthony D. Weiner have called for congressional hearings.

    Mayor Michael R. Bloomberg said last week that the group buying Starrett had a “worrisome” history of building violations.

    It was a reference to 8,792 violations at Flatbush Garden, a troubled housing project in East Flatbush that Mr. Bistricer and a partner bought 18 months ago. In his defense, Mr. Bistricer said that he has cleaned up many of the violations, which he inherited.

    But City Housing Commissioner Shaun Donovan said a significant number of problems remained.

    In addition, he said, the city has issued another 1,800 violations since Mr. Bistricer acquired the property.

    “They’ve made some progress,” Mr. Donovan said, “But the condition of the buildings is still of significant concern to us.”

    Mr. Cuomo said the country was in the midst of an affordable housing crisis, which is at its worst in New York.

    The housing market is so strong, he said, that investors now want to buy “beautiful projects” for working class and middle income New Yorkers and transform them into luxury housing. “We’re not going to let that happen,” he said.

    The injunction against Mr. Bistricer, which was signed by a State Supreme Court justice, came out of a finding of a pattern of abuse and deception by Mr. Bistricer in previous cooperative apartment conversions and sales, Mr. Cuomo’s office said.

    “It is shocking that the main buyer in this massive deal is a man who has been banned for life from doing co-op transaction across the entire state,” Mr. Cuomo said in the statement.

    Mr. Cuomo’s office said that the court issued the injunction after finding that Mr. Bistricer failed to disclose the terms of refinanced mortgages in amendments filed prior to the auction of apartments he owned.

    Copyright 2007 The New York Times Company

  5. #5


    Housing Official Says ‘Door Is Closed’ on Starrett City Deal

    March 2, 2007

    The federal housing secretary has rejected the proposed $1.3 billion sale of Starrett City, a working-class enclave of 46 apartment buildings in Brooklyn, because the prospective buyer has failed to supply adequate financial information or a plan for how the complex would remain “a viable community for New Yorkers of modest means.”

    In a news conference today in Washington, the secretary of housing and urban development, Alphonso R. Jackson, said, “The door is not open; the door is actually closed” to the buyers, Clipper Equity L.L.C., a group led by the real estate investors David Bistricer and Sam Levinson.

    "We are concerned about the buyers’ ability to comply with the law," Mr. Jackson said. "We are concerned that the sale will rapidly change the Starrett City community.”

    In a letter sent Thursday to lawyers for Clipper Equity, Mr. Jackson listed a series of issues and problems that must be addressed by the buyers.

    Thursday afternoon, Clipper Equity was desperately trying to keep the deal afloat by putting together a response to the secretary’s letter. “We look forward to the opportunity of correcting certain underlying misinformation and to providing the secretary with the appropriate assurances he seeks,” said Lloyd Kaplan, a spokesman for Clipper Equity.

    Secretary Jackson’s letter expressed “serious concerns” about whether Mr. Bistricer should be involved in federally assisted housing, given the “numerous housing code violations” at a separate Brooklyn housing complex owned by him as well as a 1998 court order barring him from converting rental buildings to condominiums or cooperatives because of financial irregularities.

    If the deal fails, the current owners, Starrett City Associates, are likely to leave the federal and state housing programs, much as Mr. Bistricer would do, according to real estate executives.

    The pending sale of Starrett City, the largest federally subsidized housing project in the country, has touched off an outcry from tenants, housing advocates, state and city officials and many politicians. Concerns have been raised that the price would force the new owner to raise rents and evict longtime tenants or sharply cut back on services and maintenance at the complex, which has its own shopping center, churches, synagogues, power plant and armed security force.

    In his letter, Secretary Jackson said that he doubted “current rent levels” could be maintained for the 5,881 apartments and 14,000 tenants at the complex on Jamaica Bay. He said lawyers for Clipper Equity, who had asked the federal housing department to approve the deal in mid-February, must provide “specific financial and managerial plans for the future of Starrett City.”

    New York officials, including New York Attorney General Andrew M. Cuomo, Senator Charles E. Schumer and Representative Edolphus Towns, whose Congressional district includes Starrett City, joined Mr. Jackson in the news conference today.

    Mr. Cuomo said that Starrett City “anchors an entire neighborhood” and that “to lose it to the private market would have been a true tragedy.”

    Senator Schumer said: “This sale deserved to be rejected on several grounds. First the sellers themselves did not set up a fair bidding process.

    They required $200,000 just to bid, leaving out lots of community groups. They did not provide all information to the prospective buyers and they prohibited those buyers form talking to federal, state or local officials.”

    Mr. Towns added: “Let me inform the residents of Starrett City you are not in this fight alone. And we will continue to be with you throughout this process.”

    Clipper Equity has hired the law firm Nixon Peabody and the lobbyist Brad Card, whose brother is Andrew H. Card Jr., President Bush’s first White House chief of staff.

    Mr. Bistricer has said that the complex will continue to be a housing project that working-class families can afford. His group said that the $1.3 billion offer — $221,000 per unit — was not out of line with other bidders.

    But Secretary Jackson, in his letter, said that Mr. Bistricer was “reportedly $500 million over the next lowest bidder.”

    Executives familiar with the bidding for the complex, however, say that the second-place offer was $1.25 billion, only $50 million less, while the third was just short of $1.2 billion. Last year, Apollo Real Estate Advisors paid $90 million, or $91,556 per apartment, for Fairfield Towers, a complex opposite Starrett City on Flatlands Avenue.

    Mr. Bistricer, who won the bidding for the 140-acre complex 22 days ago, has yet to gain his footing in the race for public approval. From the first day, advocates for low-income housing and nearly every politician from City Councilman Charles Barron to Senator Schumer have condemned the sale by Starrett City Associates and vowed to kill the deal.

    Mayor Michael R. Bloomberg all but called Mr. Bistricer a bad landlord with a “worrisome” history of building violations, while Mr. Cuomo declared that he had “a long and troubled history of tenant abuse.”

    Mr. Cuomo, a former federal housing secretary in the Clinton administration, announced two weeks ago that Mr. Bistricer was under a court-ordered prohibition barring him from converting rental buildings, including those at Starrett City. He said that Mr. Bistricer’s history should be enough for federal officials to reject his purchase of the complex.

    Mr. Bistricer has said that he was being unfairly vilified by state and city officials. He said he inherited thousands of building violations at Flatbush Gardens, a complex that he and his partner bought 18 months ago. Since then, he said, he has spent $7.6 million fixing violations and installing new elevators.

    His supporters have said that while he was the subject of a court order because of problems in the 1990’s, the state attorney general’s office had granted him permission last year to convert an office building near Downtown Brooklyn into condominiums in a step toward his possible rehabilitation.

    Mr. Bistricer’s group circulated a letter last night signed by three members of the Flatbush Gardens Tenants Association, which thanked him for improving conditions at the complex. They described his willingness to establish a community center and the installation of security cameras to cut crime.

    Sarah Abruzzese contributed reporting from Washington.

  6. #6


    April 14, 2007

    Schumer and State Legislators Seek to Block Starrett City Sale


    Senator Charles E. Schumer joined Democratic members of the State Assembly yesterday in a campaign to keep Starrett City from being sold in a $1.3 billion deal that they say would doom the vast Brooklyn housing complex as an affordable home for poor and working-class tenants.

    Senator Schumer called on federal housing officials to reject an investment group’s plan to buy the 5,881 apartments on 140 acres on Jamaica Bay because it would require millions of dollars in additional subsidies and would fail to protect the current residents from rent increases and displacement.

    He and the Assembly Democrats, including Speaker Sheldon Silver, also announced plans to push for legislation that would extend rent regulation to apartments in the state’s middle-class Mitchell-Lama housing program like the ones at Starrett City. They say that the current furor among politicians and tenant groups over the loss of affordable housing at Starrett City and other complexes in the city bodes well for passage.

    Built in 1974, Starrett City is the country’s largest federally subsidized housing complex. Under federal and state law, the owners of the complex, Starrett City Associates, a group of investors led by Disque Deane, now have the right to buy out of the housing programs and raise the rents to market levels.

    “While we appreciate the ‘tenets’ of capitalism, it is the ‘tenants’ who must remain our No. 1 priority,” Mr. Schumer said. “We must act now to protect our affordable housing stock, or this city will become too expensive for the firefighters, police officers, teachers, nurses and so many other valued members of the work force upon whom we depend.”

    It is unclear whether the legislators could stop the sale, which needs the approval of state and federal housing agencies. But at the very least, the legislators have sought to create a political climate that would make it hard for either the buyer or the seller to convert the apartments to market rate. “The need for affordable housing is more dire than ever,” Assemblyman Vito J. Lopez said.

    Mr. Schumer said yesterday that the heady purchase price, $1.4 billion when fees and closing costs are included, made it impossible to devise a viable affordable housing plan. He suggested that the owners hold a new auction or renegotiate the price, which he said should be closer to $900 million or $1 billion.

    In response to yesterday’s announcement, Starrett City Associates said they planned to go through with the deal to sell the complex to a new investment group, Clipper Equity.

    “We intend to honor our contract,” said Martin J. McLaughlin, a spokesman for Starrett City Associates.

    But executives who work with the present owners have said that if the deal fails, the owners may privatize the complex themselves, something that worries politicians and housing advocates.

    Clipper’s general partner, David Bistricer, has said that the complex would remain an affordable haven for its current residents. He said he also planned to develop more housing on empty land in the complex, which sits between East New York and Canarsie.

    “Our commitment continues to be to retain affordability for Starrett City,” said Lisa Linden, a spokeswoman for Mr. Bistricer’s group. “To the extent that the proposed legislation could help achieve that goal in a reasonable manner, we support its goals and objectives.”

    But the secretary of housing and urban development, Alphonso R. Jackson, rejected Mr. Bistricer’s first proposal in March because it failed to include adequate financial information or a plan for how the complex would remain a “viable community for New Yorkers of modest means.”

    And last week, the state’s housing commissioner, Deborah Van Amerongen, formally rebuffed Mr. Bistricer’s second proposal, saying it was unworkable under state housing laws. The federal Department of Housing and Urban Renewal is still reviewing the second proposal.

    Housing experts estimate that the federal, state and city governments funnel roughly $75 million a year in rent subsidies, tax breaks and interest rate reductions to Starrett City. Senator Schumer said that Mr. Bistricer’s latest plan would ultimately require an additional $10 million a year in subsidies.

    Copyright 2007 The New York Times Company

  7. #7


    In New Sale, Starrett City Would Stay Affordable

    Published: June 2, 2008

    The owners of Starrett City, a 34-year-old housing complex on Jamaica Bay in Brooklyn, have reached an agreement with federal, state and city officials on the sale of the 140-acre enclave under guidelines that would ensure that it remains a haven of housing affordable to working and middle-class families.

    Kathy Willens/Associated Press
    A sale of Starrett City failed last year amid fears that residents would be removed in favor of market-rate tenants.

    The agreement would not only allow for the sale of the nation’s largest federally subsidized housing complex, but also end a bitter battle that pitted the longtime owners of the complex against residents, tenant advocates and many elected officials. The sale will start this week, and the owners hope to sign a contract by Sept. 1, although it is unclear how high the bidding will go given the slowing economy.

    Starrett City, which comprises 46 brick towers with a total of 5,881 apartments, has its own power plant, shopping center, post office, churches and a synagogue. It is widely regarded as one of the most successful economically and racially mixed housing complexes in the country.

    Opponents successfully blocked a $1.3 billion sale last year to the real estate investor David Bistricer, fearing that the high price tag would force the new owner to remove tenants in favor of higher-paying residents in order to make a profit. The long-running dispute played out during a real estate boom in New York that has caused rents to soar and has reduced the supply of affordable housing.

    Instead of deregulating the complex, the accord states that the guidelines for a sale would “preserve Starrett City as affordable housing.”

    “I never really thought we could get such a happy solution,” said Senator Charles E. Schumer, who helped block the sale last year. “There were so many players, different factions of tenants, the owners, state, city and federal officials, Democrats and Republicans. But it was worth the long fight and many hours of negotiations. With this agreement we are assured that on into the next generation Starrett stays affordable to working-class and middle-class New Yorkers.”

    Tenant advocates also embraced the agreement, which is described in a memorandum of understanding that was signed by the owners, Starrett City Associates; Priscilla Almodovar, the president of the State Housing Finance Agency; Shaun Donovan, the city’s housing commissioner; and John L. Garvin, a senior adviser at the federal Department of Housing and Urban Development.

    “It’s what we’ve been fighting for for two years,” said Bertha Lewis, executive director of New York Acorn, a community organization that worked with the Starrett tenants association. “This is a model agreement. Finally the tenants at Starrett are actually going to get a very good night’s sleep. No matter who wins the bidding, they know that people have to abide by the rules.”

    Ms. Lewis said the Starrett agreement could become a model for other subsidized housing complexes that are up for sale. In recent years, tenant advocates, like the Association for Neighborhood and Housing Development, say that large developers and private equity firms have bought 90,000 apartments in the South Bronx, Harlem, Long Island City and East New York, raising rents and depleting an already tight housing market.

    Mr. Schumer, Gov. David A. Paterson, Assemblyman Vito J. Lopez, Congressman Ed Towns and others plan to attend a rally at Starrett City on Monday to formally announce the accord and the pending sale.

    Starrett City, with its manicured lawns and dozens of apartment towers with balconies, was designed in the 1970s as a subsidized middle class co-op, not a rental complex. But it initially had difficulty attracting residents and over time, the complex acquired an array of rent subsidies for poor and working-class tenants.

    As the original owner, Starrett City Associates initially invested $33 million in the complex and promised to keep rents low in return for a variety of tax breaks. During the aborted sale last year, Starrett City Associates had prohibited bidders from speaking with tenants or government officials, creating an atmosphere of distrust. But this time, interested buyers will be encouraged to talk to public officials.

    The new agreement did not come without some arm wrestling and concessions on both sides.

    The owners, a group of 250 investors led by Disque and Carol Deane, agreed to an affordable housing provision. It could lower the sale price, although it would provide bidders with assurances that the government, which provides roughly $70 million a year in rent and other subsidies, would not block a sale, as it did last year. Under the agreement, the city would also assist a new owner in gaining approval for new retail and housing development on the Starrett City property.

    The state, in turn, would forgo an estimated $13 million in interest payments owed by the current owners, and the city would continue to offer a property tax abatement.

    More important, Mr. Schumer has sponsored legislation that would convert the rent subsidy programs that cover 60 percent of the units at the complex to a 20-year rent subsidy program known as Section 8. The new owner could then set the rents based on an analysis of the rental market.

    The remaining 40 percent of the apartments are already covered by the Section 8 program but would not be subject to a new base rent.

    The legislation, which is expected to be approved by the full Congress this summer, has already been adopted by the Senate Banking Committee and the House.

    Mr. Deane and Starrett City Associates plan to start the sale on Tuesday by sending bid packages to prospective buyers. About 30 organizations have already signaled their interest, including the Related Companies, one of the city’s major developers, Enterprise Community Partners, Phipps Houses and the NHP Foundation.

    A potentially large bidder that may try to purchase the complex is led by the Cogsville Group and includes the Rev. A. R. Bernard, who leads an evangelical congregation next to Starrett City; the Metropolitan Council on Jewish Poverty; the Central Labor Council; and the Clarett Group. Mr. Bernard’s congregation owns a 4.5-acre parcel next to Starrett City where it has wanted to develop housing.

    But it is unclear how deteriorating economic conditions will affect the offers for the property. As the economy has softened in the last year, lenders have become less willing to finance large real estate deals. Banks are now requiring larger amounts of equity. Some real estate executives estimate that the bids could range from $600 million to $800 million.

    Still, Carol Deane, in a letter to tenants that will be slid under every door in the complex on Monday, said that the owners will “only consider bids from potential buyers who can demonstrate their ability to successfully own and operate Starrett City as affordable housing.”

    Copyright 2008 The New York Times Company

  8. #8


    NY Daily News

    Two real estate firms battle for Spring Creek Towers, aka Starrett City

    Wednesday, October 1st 2008, 12:05 AM


    Residents of Spring Creek, formerly Starrett City, aren't opposed to either firm bidding for the development.

    It's a David and Goliath tale - but it's hard to know which real estate investment firm to root for now that the battle for Starrett City is down to two contenders.

    On one side is a relative newcomer and minority-owned investor, the Cogsville Group, which formed two years ago and has done most of its work in the city.

    On the other side is a long-established international firm, Westbrook Partners, which owns property all over the world.

    Unlike last year, when vocal opposition helped block a $1.3billion bid for the 140-acre 5,881-unit East New York development, community leaders and tenants weren't opposing either bid.

    "We'll have to see what happens," said tenants association President Rebecca Caraballo.

    Legislative safeguards were put in place to keep the complex - now formally known as Spring Creek Towers - affordable last summer.

    Both bidders for the largest federally subsidized complex in the nation were working with nonprofit and community organizations to promise tenants improvements with new ownership.

    New York City Central Labor Council Executive Director Ed Ott, who teamed up with Westbrook Partners in a bid to buy Starrett City, said his group has pledged to keep the apartments affordable beyond the current legal 20-year requirement - and improve services.

    "We've been trying to find ways for a while to preserve these affordable housing units," said Ott.

    Councilwoman Rosie Mendez (D-East Village) said she no longer objected to the Westbrook bid after assurances of the Central Labor Council's involvement. She previously expressed concerns about its record as a landlord in her district.

    The Rev. A.R. Bernard, pastor of the 29,000-member Christian Cultural Center adjacent to the complex, joined forces with the Cogsville Group, promising to develop the church's 11 acres to provide more services to Starrett City. His proposals include a charter school, a 300-seat theater, more than 300 units of affordable housing and possibly a medical clinic.
    "Our campus is the gateway [to] Starrett City. We want to make it a destination," said Bernard.

    Tenants and advocates said they had interviewed the HUD-approved developers and saw advantages to the community in both.

    Bernard "is very close by us. If we have any complaints, we don't have to go far," said longtime resident Linda Stilton, 54, also a member of the housing advocacy group NY ACORN.

    But Stilton said for her, the most important idea for Starrett City was keeping it affordable for the next generation, as promised by the Central Labor Council.

    "That sounds really great. That impressed people a lot," said Stilton.

    © Copyright 2008 All rights reserved.

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