August 30, 2006
MetLife Wants $5 Billion for Stuyvesant Town and Peter Cooper Village
After many stories about Stuyvesant Town and Peter Cooper Village rents getting crazy expensive and apartments being marketed as "luxury residences," it's official: Met Life is wants to sell the 110 building complex for $5 billion. The NY Times has the bombshell, and many issues are raised, including who will buy it (a team of developers? Dubai money? banks?), a new owner will probably want to make it a "luxury enclave," and where will the thousands of working- and middle-class residents go. The article had some excellent quotes that give an overview of what's at play:
“This is the ego dream of the world: 80 acres, 110 buildings, 11,000 apartments, covering 10 city blocks in Manhattan.” - Executive involved with the saleMoreover, if this sale goes through, it will change the East Village and other surrounding neighborhoods even more. According to the article, Met Life is accepting bids and will announce a winner later in the fall, but if there isn't an acceptable bid, it won't sell.“It’ll be the largest sale of a single property in U.S. history. No doubt in my mind. It’s truly an unprecedented offering and an irreplaceable property. It would be impossible today to get a property of that scale in an urban location. And that neighborhood has become so desirable.” - Dan Fasulo of Real Capital Analytics, a real estate research and consulting firm
“They have to raise the rents or convert it to a condo. Either event removes this as affordable housing stock. If this were removed, there are probably 22,000 workers who live there, most are two-family incomes, probably 15,000 employees are there. Where are they going to go?” - Leonard Grunstein, a lawyer who specializes in deals involving multifamily affordable housing
"We’re at about $1,400 now. If we die, whoever comes in will pay $3,500 or $4,000. This used to be a nice middle-income place. It’s no longer that.” - A woman named Evelyn, who declined to give her last name but described herself as a 77-year-old retired teacher who has lived with her husband in a three-bedroom apartment in Stuyvesant Town for 43 years
Some Stuyvesant Town history, the official Peter Cooper Village- Stuyvesant Town website, and the Stuyvesant Town Peter Cooper Village Tenant Association website, where we're sure there will be some freaking out.
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Here's something else regarding:
http://rentaldementia.blogspot.com/
NYC better hurry up and build the hudson tunnels so we can all move to NJ to commute in to the city.
Little by little, whatever remains of "quality of life" in NYC drips away. If I have to leave Manhattan to move to Connecticut, NJ, or Westchester (or Staten Island [ugh]) -- I quit. Once you make that move there is absolutely no appeal to the NYC area. You just live in "some suburb" of a metro area.
Not to mention - how many stupid condos do we need in this city? When the next recession hits, whose gonna buy these overpriced units?
So where's the story here? MetLife is already phasing out middle income and renting vacant units as luxury -- anyone who buys ST/PCV will have to honor rent-stablization rules on existing tenants until they die off.
And when we all stop smoking real-estate-crack, maybe someone will wake up and realize that these buildings are MIDDLE INCOME PROJECTS and there is nothing luxurious about them in terms of finishes, location, etc.
I think people will move to places like Newark, Jersey City. Orange, Irvington, Union City, because you can get a two bedroom apartment there for 750 a month, while you pay twice as much in Queens and Brooklyn. You have a thriving art scene. Plus NJ has better health plans and the PATH train is more reliable than the subway.
The key to unlocking the value of that area is not with kicking tenents out, it's by using some of the underutilitized spaces that border streets and putting up some needed retail space. The Tower in a Park model is just not a very good use of space. And it forces people to walk long distances to get their groceries.
Unless Wall Street and law firms lay off lots of workers AND mortgage rates go higher, don't expect a plunge in condo prices. Throw in a weaker dollar thats likely to go lower and you'll have even more foreign buyers step in. In the bust of the late 80s people were still leaving the city. That isn't the case now.
Where do all the customers for these "luxury" units come from? Is there a limitless supply of people willing to pay $2k a month (and up) per bedroom?
Jersey City has a long way to go before I move there. Unlike Brooklyn, Jersey City is selling out to huge developers (like Donald Trump) similarly to Manhattan. It is trying to bring in jobs and residents at the same time, and although there is a huge construction boom, few people are moving in. Brooklyn still has some character, which is why I moved there. But don't worry, I'll move out once the Atlantic Yards are developed.
While I've never been in the apartments themselves, those buildings just look depressing. It's as ugly as any low-income project in New York. And the surrounding neighborhood is completely unattractive as well. It's dirty and squalid everywhere you lookWill someone please explain to me the appeal of living there?
Zac, the college grads get the money from Mom and Dad and/or they double and triple up. And have you seen the size of Wall Street paychecks and bonuses?
Last time I checked, this country has a free market economy. So we should do what - subsidize these people that live there? That women is paying $1400 FOR A THREE BEDROOM APARTMENT. That's just ridiculous.
Ha.. that 1400 3br she's paying now would go to 4800 minimum if it were flipped to market rate..
I thought the people below me were paying half.. this lady isn't even paying 1/3..
ooh, and we have 4 people in ours.. And yes, they're not the most exciting place to live, but they're also quiet, close enough to everything, reliable, and huge. Does anyone else have a 12x18 foot living room for this price? Can you say 144 inch diagnal projection tv.. ?
MT. That neighborhood is what new york is about. people from all walks of life milling about, neighborhood bars, and food, kennedy fried chicken...
i rather live there than in a luxury apartment surrounded by greedy bankers who have nothing better to blow their money on but overpriced apartments. too bad, stuy town/pcv is/has been turning into that the past few years
New York City is dead - it's not creative, it's not edgy, it's not artistic. I know it was branded that for a while, but Bloomberg said it himself: New York is a luxury product. Cultural productivity is not NYC's business.
So, I'm not sure why creative people insist on starving and struggling to pay $1,400/month for a roach-filled apartment in an outer-borough that looks exactly like some town in New Jersey. It's not like there are all that many other truly creative people left in NYC, unless you count coked-up douches from Connecticut in Brooklyn.
What will you do after all the working class people leave NYC? Who will do the work?
Anyone else want to punch anonymous in the teeth?
Working class people? Not sure what that means anymore but there will always be a stream of immigrants that are willing to squeeze into cramped apartments and travel an hour on the subway for a job. The problem is the middle class. Unless one half of a couple takes a sell-out job the other could never afford to do something noble like teach or work for the government. Why be a lawyer or IT manager for the government if you can make three times as much in the private sector.
Perhaps some of you have noticed that New York loses a Congressman or two every census. In addition to immigration plenty of Northeasterners are packing up and heading South and West.
Yes, because the size of your TV is important.
I used to live around that area and the place is depressing. Its such a vast area and I think that revitalizing the area would be a good thing for NYC. BUT they have to at least offer a good chunk of $$ to residents who will have to relocate as well as offer some low cost housing right in the new luxury residences until I suppose those people die off. NYC city is a hard place to live if you cant afford it then hey your out. Who ever said life is fair?
waaaaaa!!!!!
go to new jersey. good riddance. *spit*
I don't really have a problem with the free market driving me out of the city, but something doesn't smell right.
I work in a law firm, so I appreciate how high professional salaries are in this city, but there's a finite supply of corporate lawyers, executives and bankers. At some point, isn't there going to be a surplus of housing for these people? Why is EVERYTHING West of Elmhurst, South of 125th and East of the Hudson (throw in Hoboken, Weehawken & J.C.) now considered a viable LUXURY neighborhood? Are there really THAT many people out there making 200k a year?
Middle income people can't survive in a city that demands they pay over 50% of their take home in rent.
Also annoying are the middle class retirees sitting on million dollar apartments that don't think they should have to pay taxes. I don't know when the right to die in your apartment and pass it to your heirs got included in the Bill of Rights. If you don't want to sell you should be forced to take out a reverse mortgage.
I'll stick with NYC no matter how tough it gets.
I don't want to have to drive everywhere and go to strip malls for everything and big box stores to get anything.
And I don't want to deal with dumb people who get most of their entertainment from reality shows.
because that's who lives outside of ny/sf/la
Or maybe we are all just hypocrites, as we lament the disappearance of working class NYC, but almost never propose moving to the Bronx.
Um, all the "free market" worshipers need to be aware that just moving to the 'burbs is no solution, not when we're already losing most of our farmland to sprawl.
Then again, the "free marketeers" have no problem with Bush's hollow-out-the-middle-class policies.
#18 - No, it's the size of the bank account that can afford the 144" TV that's important.
Capitalism and free market forever!
"So we should do what - subsidize these people that live there? That women is paying $1400 FOR A THREE BEDROOM APARTMENT. That's just ridiculous."
It's ridiculous that in NYC people think $1400 is a ridiculously low amount to pay for an apartment. Who do you think exactly is subsidizing that rent? I don't follow your argument. If someone moves into an apartment, the rent should just be rasied to "market rate" (which is ridicously overpriced in NYC anyway) at the whim of the landlord whenever he/she/they feel(s) like it, instead of having rent increases regulated?
"And I don't want to deal with dumb people who get most of their entertainment from reality shows."
Please. Some of the most vapid, self-centered, ridiculous people I've ever met live in NYC. Enough with the suburb-bashing. I love living in NYC, but you'd better believe I love (equally) heading to my parents' house where they have a yard, two cars, no vermin, regular trash pickup, a dishwasher/washer/dryer, and a relative absence of entitled, precious assholes. They're not even close to rick, either - you can live in a peaceful, clean community without a lot of money outside of cities like NYC, San Francisco, etc. To me, that's a hell of a lot more democratic than living in a city where only the well-to-do have such amenities (unless they want to commute in from way out in the outer-boroughs).
The City aka Doctoroff has to get involved and put stipulations on this deal. MetLife received the land from the city to make affordable housing for the working-class, the new developer cannot (does not have the right to) have freewill over the land to bulldoze 1/3 of it over for it to be cost effective. It's a sad NYTimes article, let's hope the City does the right thing here.
Hey Wha -
You don't subsidize this woman's apartment at all. And for $1400, she's probably lived there for 30 years; long before the surrounding areas were so cool all the lawyers, bankers, etc just HAD to live there.
ST/PCV was a peaceful, clean community where people could raise their families and not spend all their money on housing. They could afford to be the people who taught the kids in public schools (and private schools); they could survive as nurses and police officers, living in the city they served - and they could do it comfortably, which is all most people want in life.
Rent-stabilized tenants have the "right" to live in New York - just because you can afford to pay (or are naive enough to pay) 4 times their rent doesn't mean you have any greater "right" to live here.
I grew up in Stuy Town... and it was great. Alot of people forget that for almost three decades this was an island on the east side there was nothing... and I mean nothing around it. Its quiet and the construction is unbeatable.
The two biggest issues are access to transportation and retail space.
As for the free market mechanism... I also have no problem with it except that this site was not constructed under the free market. Imminent domain and a frozen tax rate virtually financed the project...which had the objective of providing apartments for working class people (i.e. cops, firefighters, nurses, teachers etc)... it would seem that the public should see some benefit from the sale and not in the form of BS "increased tax revenue."
New York needs more development luxury or otherwise the problems we are facing with high rental and purchasing costs are do to low supply and high demand...
I for one would love to see an oversupply at the time all these whiners leave for New Jersey or to move back to where ever they came from.... ah to dream
There is a glut of luxury apartment sin the city. Trump has a whole bunch of towers on the west side highway that he built almost 15 years ago and they are still mostly empty. I just dont get it, the whole if you build it they will come philosophy regarding luxury apartments here. If completely stupid, I hope they do build more and more of them, and that they sit empty for another 15 years. Fucking asshole developers will learn the hard way, thats my prediction, the sad thing is in the meantime, the middle class and under suffers.
Amen, #30, people who serve their community as teachers, nurses, police, etc... should be able to afford to live in the community that they serve...
Free market is good-it allocates resources efficiently. econ 101.
Now it is very true that the supply of people making 200+ a year is very limited, so if the developers think they will continue to get 3,000/mo for a 1 bedroom they are delusional. So guys relax, soon there will be plenty of somewhat affordable housing once all the condos go up and the husing market fizzels.
Moreover, those buildings are ugly! Not that steel-and-glass monsters are much better...
And about the poor people that won't be able to live in nyc anymore, well why should have an easier time paying their rent than a person busting his/her ass for 70K a year?!?!?!?
Spare me the "Bush is hollowing out the middle class" crap. Incomes of the top earners has been growing much faster than the bottom for the past 40 years. Even during your precious Clinton years the bulk of the income gains went to the top. If you need to blame something, blame globaization. But take globalization away and the 1990s would never have happened. The only thing that kept that boom going was cheap imports that kept a lid on inflation.
If you jacked the income tax rates on the top earners they would simply demand more compensation. They have that leverage.
And to the person that thinks cops are working class. Unless you're a lawyer or banker the cops probably make more than you. And they have a sweet pension that will pay them in their 50s even if they go on to another job like private security. And the only cops that are underpaid are the rookies which is interesting because the current cops signed off on this in their union contract. Screw the guys that aren't yet in the union, sounds good.
How can you say the high rents don't subsidize those with low rents? Do you think the cost of maintaining these buildings is frozen at low levels? If the owners have to pay the security guys or repair men more this year it comes out of the market renters. The owners do deserve to cover their costs and make some return on their investment.
Can anyone find a reputable source for the empty Trump towers on the West Side? I have heard this rumor before, but it sounds like something of an urban legend (literally).
See, I don't consider teachers working class, but I do consider police officers working class. I don't consider "working class" a derogative term in the least. For me, it's got nothing to do with earnings and everything to do with the required education level for the job. Truck drivers earn more than museum workers, but the job doesn't require as much formal education.
Class is a funny thing in this country.
>>>It's ridiculous that in NYC people think $1400 is a ridiculously low amount to pay for an apartment.
On a $40,000 a year salary, the average in NYC, that is a ridiculously high amount.
www.forgotten-ny.com
High renters "Dont" subsidize in the case of Peter Cooper and Stuy Town... they have been cutting grass and maintaining buildings there since they were built. In terms of Higher pay I am sure they have plenty with there 4-5 percent rent increases under RS laws they have been doing for years
Are the residents of Stuy Town also operating a machine shop? Are they making their own glass for new windows? Do they have their own electrical generating capacity? If that lawnmower breaks I guess they just make a new one. And if the pipes leak they just make new ones in their metal shop.
Ummm as far as I can remeber they were taking care of pipes and windows under rent controls.... didn't seem to be an issue then? Other costs are figured into the RCB's (Rent Control Board) rent increases allowed every year... plus the property has already recouped investment several times over... plenty of cash coming in... OH and they infact do have a metal shop!!!
The sad part of this story is that Stuy Town was an altruistic project, housing for middle-income people, built by a giant corporation whose primary goal was something more than maximum profitability.
It's hard to imagine a similar project being completed today.
The sad part of this story is that Stuy Town was built as an altruistic effort, housing for middle-income families, by a giant corporation whose primary goal was something more than maximum profitability.
It's hard to imagine a similar project being completed today.
the implication, in some of these comments, that people living in rent stabilized or rent controlled markets that are ridiculously below market rate somehow deserve to have them taken away because it's not fair to the rest of us - this is baffling. i'm just as jealous as the next person that i don't have the same luck. but you know what, these people played by the rules and have lived in these units forever, or their families have. good for them for holding onto them. even if some people could afford something closer to market rate and could be described as 'hoarding' affordable housing - so what? rent control is objective. let's keep it that way.
and as for the appeal of stuy town and peter cooper village - they do resemble projects, but a discerning eye can tell the difference. there is nothing wrong with wanting to live here - everyone has their preferences. i personally would enjoy a working- or middle-class enclave to luxury condos filled with people who treat nyc like a status symbol or a playgound instead of a community. and don't tell me i should settle for a long commute or a dangerous neighborhood because it's my fault somehow my career is meaningful but not high-paying.
most people aren't asking for a huge apartment or a prime neighborhood, just a reasonable quality of life. what's the tipping point? at what point will the real estate market force the working class out of the city? who's going to bus the tables of those wealthy enough to keep gobbling up all the space?
I agree with finley. I have no choice but live in New Jersey because my employer moved me there. I feel imprisoned because I have to drive EVERYWHERE!
And #27, I'm paying $2400 (EXcluding heat and all utilities) for a 3 bedroom non-luxury apt in a not so hot town in NJ...and that's considered quite a bargin.
So the parcels were first assembled through eminent domain, eh? Aren't you free-marketers feeling at least conflicted, if not just defeated? Scratch any real estate project in this city, and you'll find government support.
Trust me, Metlife more than makes up for the cost to them for repairs and maintenance. Their BS MCI increases is a prime example. Replacing 50 year old elevators (with equally poorly performing & smaller, uglier elevators) or upgrading the roof of a building are hardly major capital mprovements - they are necessary fixes to an older building. The cost of these "improvements" certainly add up and are tacked on to the rent from here to eternity.
As for cops making bank - maybe, maybe not. That's the trade-off for putting yourself in harm's way. And I'm pretty sure it falls under "busting your ass" - plenty of people bust their ass for a lot less than $70,000.
I think most people don't realize that most people in NYC don't care what the exterior of the building looks like. Yes Stuy Town resembles public housing, thats because it was public housing, it was affordable housing. When you create a town a magnitude of Stuy Town, it is inevitable you will create housing that looks like projects. How else are you going to that density with a limited amount of space.
The real question about the sales of Stuy Town is not if everyone is going to get kicked out, becasue that will eventually happen, with the natural turn over rate of all afforable housing, but who is going to take the risk of buying the property and redeveloping it. With recession looming close and the bull market transforming itself into a bear, MetLife is looking to maximize its profits before real estate takes a bigger hit. These speculators are likely to be NYC developers in collaboration with outside developers to limit liability for both parties. And like the NYTimes said, no developer will be able to finance this themselves, and no bank will allow that to happen.
At this point we can't worry about how to stop the transformation, but be more concerned with damage control. How can we limit the damage and Environmental Impact that the new development is going to create. How will it change the context of the neighborhood, how will it strain the infrastrucutre, sewer, sanitation, transportation, education, etc.
This is the battle that the neighbors should prepare for, becasue this battle can be won.
I have a feeling most developers aren't ready yet, they are going to ride this one out. It will be at least 3-6 months before they have a potential buyer, they will probably want to wait to read the market better and let it stabilize whether it is up or down.
Free Market blah blah blah! It is based on screwing people. The greedy 1 percent is only setting themselves up for disaster, even though they think the know everything.
People should read a little about how rent control in general hurts the general structure of our society. Yes, it helps lower the costs for the lowest income folks, but the net cost to everyone increases.
If rent control wasn't in place, the three br places might go for 3300, instead of 1400 controlled and 4800 not. yes, the lady probably couldn't afford it any longer, but that transition would have happened many many years ago. On top of that, the regulation involved costs everyone, from the sheer fact the RCB has to exist to the lowered tax revenue on the RC units.
This report: here
explains the many factors involved better than I could in this text box..
stay outta the bronx..
"thriving art scene in nj" where? am I missing something? health insurance..whats that?
there is no such thing middle class anymore.
The City needs to get involved to protect the current tenants (rent stablized and market rate). This is the City's chance to really show they are for real middle-class affordable housing in the City of New York; Doctoroff, Bloomberg, Garaodnick and HPD/HDC should all be on board here making sure the tenants get a fair outcome here. I'm sure deals are being cut for MetLife not to pay their full share of taxes after the sale (this is the main reason they haven't sold it in the past the tax didn't make the sale worth it) and for the new developers' group to get what they need, the tenants of Stuy Town need to mobolize now to get their message out to these parties. That's the real important issue here.
#24 is so on the mark.
Everyone, replace every instance of the words "NYC" & "New York" with "Manhattan" and "city" with "borough" in the article and these posts.
Think once, think twice.
Again, with the Cato institute?
Name one large developement that didn't benefit from any City or State funding directly or indirectly.
Your transit check is considered a subsidy.
The 43 year resident of ST was probably under rent stablization, not RC.
Back when PCV and ST were full of working people.
Oh, was that wrong to use "working" people? OK, then those who make slightly above the minimum wage and many still do. My mother was one till she retired and her wage was still $5.15/hr.
Regarding the free market folks, don't like ST/PCV?
don't live there.
I for one would love to live there and be away from you "free market" "capitalists".
I think both the stabilized (of which I am one) and free marketers are correct. For those that are in it stabilization will most likely protect them for the rest of their lives (unless they make over 100k a year). Stabilization for everyone else is on a path towards death... and I dont necessarily believe that to be a bad thing.
Without stabilization development and improvement will increase. This will have a profound cultural affect on certain neighborhoods but these can neither be viewed as good or bad... it is the nature of the city. Queens and the Bronx were once farm land until transit was built into those areas... the character changed for good for bad who cares it just changed.
In NYC as a whole we have to stop fighting development tooth and nail. This NIMBY attitude and feeling that neighborhoods should stop changing after you move into them has gotta go.
For free-marketers I agree with 55 no development occurs in NYC without direct or indirect subsidies... take zoning which is controlled by the department of city planning but approved by the ULURP process which is democratically elected. If your a land holder and zoning changes from R5 to R12 zoning your property probably more then tripled in potential value... under market rate thinking you should not even have to wait for rezoning...circumventing a democratically established process.
The issues are complex... but in this city rapid change translates to 10-20 years so I think there will be ample time to dicuss
I am so tired of these over-priveleged jerks getting their way and justifying it all the time. Save your brainwash. You'll need it to eat it. We need a new George Washington to come and start kicking some tails around here again.
This presents a golden opportunity for NYU to finally have the campus that it is constantly seeking by overrunning the village. I am sure that NYU could easily fetch $5 billion for all of its village landholdings. In exchange, it can have more dorms and classroom space than it will ever need and, heck, the buildings already look just as ugly as every high-rise eyesore NYU erects in the middle of historic neighborhoods.
This is one of the reasons why I live in the Hudson Valley and commute into Manhattan via Metro North.
I'm not going to pay for a small tiny little house/apartment while I can get double the size here in the Hudson Valley.