Tishman Speyer and BlackRock, who acquired the Stuyvesant Town and Peter Cooper residential enclaves for $5.4 billion from the Metropolitan Life Insurance Company in 2006, issued a statement today that they intend to transfer control of the enclaves to their creditors.
In a statement, the two concerns declared that they "have spent the last few weeks negotiating in good faith to restructure the debt and ownership of Stuyvesant Town/Peter Cooper Village," adding that "it was our hope in these discussions that our partnership would remain as part of the long-term ownership."
"Over the last few days, however," the statement continued, "it has become clear to us through the process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives. We have no intention of putting ST/PCV into bankruptcy. We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the City."
Tishman Speyer also said that it "would not consider a long-term management contract to continue operating the property that does not involve ownership," adding that it was "fully committed to an efficient transition of the property's operation and are offering to continue managing the property during this period to make the transition smooth and seamless for the residents."
The venture had been trying to renegotiate about $3 billion of debt on the properties that cover 80 acres east of First Avenue between 14th and 23rd Streets and house more than 11,000 residents.
"Aside from the $3 billion in mortgages," Charles V. Bagli wrote in a January 8, 2010 article in The New York Times, "there is another $1.4 billion in secondary, or mezzanine, loans and almost $1 billion in equity invested by the partners, a Florida pension fund, the Church of England and others."
"Also in the mix are the government-controlled mortgage giants Fannie Mae and Freddie Mac, which together hold a bond that is secured by as much as $2 billion of debt on the property," the article continued, adding that "these two companies will get paid first with whatever revenue comes from the property, but they are not involved in the negotiations."
The value of the venture's acquisition fell dramatically because of the financial crisis and because last month the New York State Court of Appeals ruled ordered market rate rents rolled back at the development for at least six months beginning January 1.
Metropolitan Life erected the enclave of 15-story, red-brick buildings without air-conditioners for World War II veterans and it received tax breaks and incentives in return for keeping rents low.
In a statement, the two concerns declared that they "have spent the last few weeks negotiating in good faith to restructure the debt and ownership of Stuyvesant Town/Peter Cooper Village," adding that "it was our hope in these discussions that our partnership would remain as part of the long-term ownership."
"Over the last few days, however," the statement continued, "it has become clear to us through the process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives. We have no intention of putting ST/PCV into bankruptcy. We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the City."
Tishman Speyer also said that it "would not consider a long-term management contract to continue operating the property that does not involve ownership," adding that it was "fully committed to an efficient transition of the property's operation and are offering to continue managing the property during this period to make the transition smooth and seamless for the residents."
The venture had been trying to renegotiate about $3 billion of debt on the properties that cover 80 acres east of First Avenue between 14th and 23rd Streets and house more than 11,000 residents.
"Aside from the $3 billion in mortgages," Charles V. Bagli wrote in a January 8, 2010 article in The New York Times, "there is another $1.4 billion in secondary, or mezzanine, loans and almost $1 billion in equity invested by the partners, a Florida pension fund, the Church of England and others."
"Also in the mix are the government-controlled mortgage giants Fannie Mae and Freddie Mac, which together hold a bond that is secured by as much as $2 billion of debt on the property," the article continued, adding that "these two companies will get paid first with whatever revenue comes from the property, but they are not involved in the negotiations."
The value of the venture's acquisition fell dramatically because of the financial crisis and because last month the New York State Court of Appeals ruled ordered market rate rents rolled back at the development for at least six months beginning January 1.
Metropolitan Life erected the enclave of 15-story, red-brick buildings without air-conditioners for World War II veterans and it received tax breaks and incentives in return for keeping rents low.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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