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Stuyvesant Town, Peter Cooper Village Turned Over to Creditors

By DNAinfo Staff on January 25, 2010 7:22am  | Updated on January 25, 2010 7:32am

The owners of Stuyvesant Town and nearby Peter Cooper Village (not pictured) will turn the massive complex over to creditors.
The owners of Stuyvesant Town and nearby Peter Cooper Village (not pictured) will turn the massive complex over to creditors.
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Flickr/Marianne O'Leary

MANHATTAN — The cash-strapped owners of Peter Cooper Village and Stuyvesant Town said Monday they would hand over the massive apartment complexes to creditors after they were unable to make payments on their loans.

Earlier this month, it became clear the owners Tishman Speyer Properties and BlackRock Realty were in trouble when they defaulted on a $16 million payment due Jan. 8. 

A spokesperson for the partnership released a statement early Monday saying it had spent the past few weeks trying to have their debt restructured so they could continue to own Stuy Town and Peter Cooper Village.

“Over the last few days, however, it has become clear to us through this 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,” the spokesperson said in the statement.

“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 and BlackRock bought the 110 buildings and more than 11,000 apartments that make up Stuy Town and Peter Cooper Village for $5.4 billion in 2006 at the height of the real estate bubble.  It was the most expensive real estate deal of its kind in history.

The owners had intended to turn the mostly rent-regulated apartments into luxury units, but that plan failed after a court ruling deemed it illegal and the housing market collapsed.

Some analysts said the value of the 80-acre site had dropped to as little as $2 billion, considerably less than the outstanding loan balance, according to the AP.

It was unclear when the transfer of ownership would happen and who the new owners would be.