Peter Cooper Village, 360 First Avenue: Review and Ratings

Review of 360 First Avenue by Carter Horsley

Stuyvesant Town / Peter Cooper Village is New York’s most famous application of Le Corbusier’s solution to urban planning: towers in a park.

It was the largest “superblock” ever undertaken in the city when it was completed not long after the end of World War II.

It required the relocation of about 10,000 residents from about 600 buildings in a 72-acre site of 18 blocks bounded by First Avenue, Avenue C, the East River Drive and 14^th and 20^th streets.

The development was undertaken by the Metropolitan Life Insurance Company in April 1943, the year after it had completed its huge, but somewhat smaller Parkchester development in The Bronx.

Peter Cooper Village is just to the north of Stuyvesant Town, which is between 14^th and 20^th Streets and has similar but taller buildings and larger apartments. PCV has about 2,500 apartments, was named after an industrialist who was the founder of Cooper Union.

By the time both complexes were ready for occupancy in 1947, they had received about 100,000 applications.

Bottom Line

Much smaller than the sprawling Stuyvesant Town to the south, Peter Cooper Village has slightly taller buildings with slightly larger apartments. It shares a host of amenities and lush landscaping with Stuyvesant Town including concierge service and garages and its apartments have been modernized.

Description

Rents at Peter Cooper Village were initially nearly double those of Stuyvesant Town because it was built without tax exemptions or city land assembly. As a result, tenants were historically drawn from the ranks of the middle and upper-middle classes. The buildings in Peter Cooper Village are 15 stories tall.

The Stuyvesant Town buildings were not pure towers or slabs and had wings, some of which were a few stories shorter than the main part of the building. In the center of the complex was Stuyvesant Oval with buildings arranged around it at angles while those along the outer boundaries were parallel with the streets.
 

History

It replaced buildings in the city’s “gashouse” district where in the 1920s about 75 percent of the apartments did not have central heating, 66 lacked bathrooms and 20 percent lacked private toilets.  The district was named after its large gas tanks that occasionally leaked.  The construction of the FDR Drive, however, reduced the number of gas tanks to four.

The development was criticized by Lawrence Orton, a member of the City Planning Commission, for not including a public school and 23 architects protested its high population density.  The project was approved by the city’s Board of Estate in June 1943 but Newbold Morris, the president of the City Council, and Edgar J. Nathan Jr., the Manhattan Borough President, voted against it.  The Citizens’ Housing Council of New York took the city to court to object to the development as a “walled town” with too few community facilities, private streets, no safeguards against racial discrimination, no provision for commercial users along the waterfront, unlimited profit possibilities for the sponsor and too high population density.

In a May 28, 1943 letter to the editor of The New York Times, housing expert Loula D. Lasker wrote that “Metropolitan Life has indicated that it will not consider applications from Negroes for apartments.”  The editors of Architectural Forum stated that “not until the U. S. Government admits Negroes to all of its public housing projects does it seem rational to transfer this problem to the Metropolitan Insurance Company” and by late 1943 the National Association of Housing Officials described the controversy as “a battle up to now lacking only in beer bottles and murder,” according to Robert A.M. Stern, Thomas Mellins and David Fishman in their great book, “New York 1960, Between World War II and the Bicentennial.” 

In an analysis of the debate, Tracy B. Augur wrote in 1944 in the Journal of the American Institute of Planners that Stuyvesant Town, “the most dramatic project yet announced for the redevelopment and of an American city,” reflected the principle that “sound urban renewal in the postwar era required projects of such scale”: “Little islands of redevelopment in a big sea of blight have little chance of survival,”

Marcel Breuer, however, then a professor at the Harvard Graduate School of Design, attacked the “country-suburban romanticism” of contemporary planning” and applauded the “concentration, the nearness of a great many things to each other: the choice, or the illusion of a choice between many possibilities.”

“Despite deplorable conditions and the long-term threat of redevelopment, the gashouse neighborhood that was to be eliminated constituted a viable community,  For the first time, perhaps, planners and elected officials were confronted with a new reality: that health communities existed, even thrived , in physically degenerated environments.’

“When Stuyvesant Town finally opened in 1947, despite the bleak uniformity of the buildings and the as yet immature landscape, middle-class New Yorkers welcomed it with enthusiasm as an appealing and distinctly affordable alternative to suburban tract houses,” Mr. Stern, Mr. Mellins and Mr. Fishman write.

Lewis Mumford, the architecture critic who felt that Stuyvesant Town was an “unrelieved nightmare, observed that many tenants had written him of their appreciation for the development: “Quite properly,” he admitted, “they declare that their quarters are the equal of anything Manhattan can offer elsewhere at two or three times the rental, and they feel that they are in heaven,”  But he added that “Like almost all New Yorkers, who have spent most of their lives in cramped, sunless, dusty and even garbagy blighted areas, they have no proper basis for judging Stuyvesant Town….They praise Stuyvesant Town only because they do not know how much is missing from its design.”

Mumford, however, regarded the project’s kitchens as “marvelously convenient” and the standards of interior space generous.

The development was designed by a board of design that was chaired by Richmond H. Shreve and its members included Andrew J. Eken, George Gove, Gilmore D. Clarke, Robert Dowling and Irwin Clavan, who was credited as the development’s architect.

In his very interesting book, “Public Works,” Robert Moses said that “acting as the Mayor’s representative to draw insurance companies and savings banks into the field of large-scale slum-clearance and rehabilitation in the older, substandard parts of the City, I induced the Metropolitan Life Insurance Company to build Stuyvesant Town and Riverton.  Because of the farsightedness and courage of Frederick H. Ecker, chairman of the board, Metropolitan Life was willing to proceed.”

“Stuyvesant Town, and indeed the entire program, was fought tooth and nail.  Owners of property in the redevelopment site sought to enjoin the project, but the Court of Appeals decided in favor of the constitutionality of the law:

‘We find no sound basis for the constitutional objection advanced by the petitioner that the condemnation of private property authorized by the Redevelopment Companies Law is not for a public use….Nor do we find merit in the related argument that unconstitutionality results from the fact that in the present case the statue permits the City to exercise the power of eminent domain to accomplish a project from which Metropolitan – a private corporation – may ultimately reap a profit.  If, upon completion of the project, the public good is enhanced, it does not matter that private interests may be benefited. (Murray v. LaGuardia, 291 NY 320.)’

The United States Supreme Court later refused to review this decision.

A contract was then entered into between the City on the one hand and the Metropolitan Life Insurance Company and the Stuyvesant Town and Riverton Corporations, the redevelopment companies, on the other.  A controversy arose about the owner’s right to select tenants.  Metropolitan insisted on following a tenant –selection policy apparently involving racial discrimination, according to Mr. Moses.

In 1948, after Joseph Dorsey and two other black war veterans brought suit against the development and the insurance company for racial discrimination, the Appellate Division of the New York State Court affirmed the decision of the lower court in which Judge Felix C. Benvenga said that the plaintiffs had confused ‘public use’ and ‘public purpose’ with the term ‘public project.’  His decision said that although Stuyvesant Town had benefited from and continued to benefit from served a public purpose – slum clearance – it was not in fact a public project.

The Court of Appeals the next year affirmed the lower court rulings, and, Mr. Moses continued, “Judge Bruce Bromley, writing for the majority, observed that “the legislative intent is clear to leave private enterprise free to select tenants of its own choice.”

“Threatened by a bill against discrimination pending in the City Council, in 1950 Metropolitan Life admitted three black families, claiming that its admission of ‘some qualified Negroes’ presents ‘no change in the company’s policy.’   In June, 1950, the United States Supreme Court refused to review this ruling,” Mr. Moses continued, adding that “whereas the courts had failed, public pressure on the major and Metropolitan Life eventually prevailed….Despite Metropolitan Life’s opposition, the Brown-Isaacs bill baring discrimination in all public assisted housing, widely viewed as landmark legislation, was passed by the City Council.”

“One of the Stuyvesant Town tenants was Richard Moore, a young lawyer who happened to be the son of Frank. C. Moore, the lieutenant governor,” Moses wrote, adding that “although Richard Moore was active in efforts to integrate the development, he was not included in the proceedings to evict tenants who advocated that Negroes be permitted in Stuyvesant Town.  Urged by his son, Governor Moore asked me to persuade Metropolitan Life to drop the evictions. He sent me a long letter written to him by his son analyzing the situation in terms such as ‘political evictees.’ My reply offers another perspective on this controversy:

‘I suggest you talk to Fred Ecker, Senior. The old gentleman is exceedingly able, experienced, shrewd, hard-boiled, and conservative.  He has some very poor advisers – notably lawyers, George Gove, the vice president in charge, and Fred Ecker, Junior, the executive vice president and heir apparent, who is a very small chip off the old block. Your son seems to be very enthusiastic, very honest, and very young.  You yourself will be suspected of having a political as well as a paternal interest in the discrimination question. The only constructive suggestion I can offer is to get Fred, Senior, to take more Negro tenants at Stuyvesant and Cooper, get himself a new housing vice-president with more  milk of human kindness and less ice water in this veins than George Gove, and keep abreast of the times….’”

The February 1, 2009 issue of New York Magazine carried a long article by Gabriel Sherman about the acquisition of Stuyvesant Town and Peter Cooper Village by Tishman Speyer, the owners of Rockefeller Center and the Chrysler Building, and BlackRock Realty, for $5.4 billion in November, 2006.

The complexes were “gargantuan symbols of the old city,” according to Mr. Sherman, who added that they “represented a kind of New Deal for returning veterans, and a sign of the power of government and corporate America to make the city hospitable to a rising generation.  The Gashouse District, which Moses called a slum and the 11,000 residents who lived there called a neighborhood, was bulldozed to make way for the complex’s construction on the far east flank of Manhattan, from 14^th to 23^rd Street.  Over the years, it has become one of the last bastions of the middle class in Manhattan, a distinctly unglamorous if verdant oasis – actual lawns, actual trees – of redbrick high rises, where the traditional real-estate rules in the rest of the city didn’t seem to apply.  The average rent-stabilized two-bedroom, if you were lucky enough to get one, could be had for $1,400 a month.  Stuy Town was the kind of place where the children and grandchildren of immigrants ended up.  Heavily Jewish, Irish, and Italian (blacks, shamefully, were excluded until the sixties), populated by teachers and government workers, MetLife employees and policy holders among others, it was a city unto itself, with 25,000 residents and an emphasis on family.…With its workaday high-rises, it was the most modest of Utopias….

“But by 2006, the sun seemed to be setting on the middle class in Manhattan.  The blasting real estate scene gave a whole new meaning to ‘market rate’ apartments, and fewer and fewer people in the city believed in rent stabilization as a core value.  The complex seemed a kind of anachronism – and, to the Speyers, a huge opportunity….Rob had a vision.  He believed that by adding amenities and remodeling apartments – and forcing out longtime tenants who held on to their apartments in violation of rent-stabilization law – they could make Stuy Town hospitable to the new armies that were increasingly populating Manhattan, the recent college graduates with jobs in marketing and finance who worked long hours and wanted a full-service experience (including even a putting green)….”

The December 18, 2009 edition of New York Magazine carried another article by Mr. Sherman on the Speyer’s acquisition of Stuyvesant Town, which the headline described as a “$3.4 billion Stuyvesant Town mistake” and the article called “the biggest real estate deal in American history…an epic blunder.”

It said that the mortgage in the deal “was sliced and diced and sold to investors around the world,” adding that “debt holders include the government of Singapore, the mammoth California pension fund CALPERS, as well as beleaguered mortgage giants Fannie Mae and Freddie Mac, which collectively hold as much as $2 billion of Stuy Town’s debt.  Stuy Town’s investors are looking at staggering losses, and some are furious about it….The Wall Street Journal reported a list of major investors that includes the Florida state pension system ($250 million), real estate firm SL/Green ($200 million), and remarkably, the Church of England (70 million)....Industry analysts estimate Stuy Town is currently worth about $2 billion – a 65 percent loss from the purchase price. 

“In 2007, tenants at the rent-regulated complex sued MetLife and a Tishman Speyer-led investor group, alleging that both companies had illegally deregulated units while receiving tax benefits known as J-51s. In 2009, the appellate division of the New York State Supreme Court reversed a lower court decision and found in favor of the tenants.”

Subsequently, the New York State Court of Appeals upheld a ruling that Tishman Speyer had improperly deregulated thousands of rent-stabilized apartments and forced more than 4,000 apartments back under rent stabilization and the New York magazine article said that that ruling “killed any chances to raise rents and turn a profit.”

The class action lawsuit charged that market-rate rents were being charged while the project was receiving tax benefits under the city’s “J51” program that requires owners to maintain apartments as rent stabilized while receiving tax benefits.  The court held that the market-rate apartments had to be reverted to stabilization until the end of the J51 benefit period, which was around 2017.

The Sherman article noted that “like so many of the deals completed at the market’s peak, the financial assumptions underlying Tishman Speyer’s bid were aggressive, assuming steadily rising rents.”

“The buildings at Stuy Town and Peter Cooper Village were 73 percent rent stabilized, and making the deal profitable would require the messy public-relations exercise of ferreting out illegal rent-stabilized tenants.  The real linchpin of the plan, they say, was to dramatically increase the rents for apartments on the open market.  At the time of the purchase, the rents for the properties covered only 58 percent of the debt.  The deal asssumed that income from the two properties would triple by 2011.  The deal also assumed that over the next five years, Stuy Town and Peter Cooper Village would be worth nearly $7 billion – a 23 percent increase over its purchase price.”

Tishman Speyer subsequently transferred control in January 2010 of a $3 billion chunk of debt of CW Capital, a financial firm called a “special servicer.”  It was the largest commercial mortgage default in U.S. history.

The Sherman article said that “Tishman Speyer contributed $56 million of its own money to the $5.4 billion purchase price and didn’t use any of its other properties as collateral.”

In November 2011, the Tenant Association for Stuyvesant Town and Peter Cooper Village voted to partner with Brookfield Asset Management to explore purchasing the residential complexes with the goal of converting them to affordable condominium or cooperative plans in which residents could choose to purchase their apartments or remain as rent-regulated tenants.``

In December, 2011, Guterman Westwood Partners sent a letter to Stuyvesant Town residents stating that it had previously proposed to the tenant association a lower priced cooperative conversion.  It argued that the Brookfield condominium plan was a “poor choice” because of the expense of recording 11,232 separate tax lots.  Furthermore, it maintained that “the total amount that the average existing tenant will pay monthly for debt service, real estate taxes and maintenance together, after tax benefits, be equal to or les than the average rent currently being paid by tenants.  It also said that the “the average existing tenant purchase price will be approximately three hundred fifteen dollars per square foot, free and clear, including the pro rata amount of the underlying co-op mortgage as compared to the average free and clear price of condos in the area around the complexes is more than $700 a square foot.  The cooperative corporation, it continued, would pay $140 a square foot leaving the tenant to pay about $175 a square foot   All unsold tenant-occupied apartments at the date of closing will be sold to a nationally known “not for profit’ real estate organization that has agreed to finance the acquisition of the unsold units with tax-exempt bonds and to hold and operate such apartments as ‘stabilized’ middle class rents for the foreseeable future (whether or not actual stabilization laws continue to apply).”

According to a June 20, 2012 article at crainsnewyork.com by Theresa Agovino, a report by JPMorgan Securities maintained that “selling Stuyvesant Town/Peter Cooper Village to a partnership between the complex's tenants and Brookfield Asset Management would likely offer the best returns to the holders of the troubled property's first mortgage.”

The article also indicated that any deal “is likely at least a year away.”

It added that the report said “a 2011 appraisal valued the property at $3 billion, but added that the figure seemed ‘aggressive’ if the complex were still to be run as a rental building where revenue would only increase substantially as units are deregulated. On the other hand, the report estimated that a partial condo conversion could bring in as much as $4.4 billion. Holders of the senior mortgage are owed $3 billion. Another $1.4 billion is owned to the holders of the mezzanine debt.”

"To have an independent analysis of the markets come to this conclusion is an obvious lift for the Tenants Association/Brookfield partnership," said City Councilman Dan Garodnick, who lives in the complex and represents its residents, the article noted, adding that "The JP Morgan Report confirms the conversion plan that is being prepared by Brookfield and the tenants association is the best plan for the community and for CW Capital."

“Before any sale or other transaction can take place,” the article continued, “CW has said that the ongoing litigation over rents must be settled.

Stuyvesant Town is named after Peter Stuyvesant, the last Director-General of the Dutch colony of New Amsterdam, who had a farm on the site.  Peter Cooper Village is named after a 19^th Century industrialist and philanthropist who founded Cooper Union.