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Stuyvesant Town Residents Can Keep Rents Low Until June

By DNAinfo Staff on February 4, 2010 4:53pm  | Updated on February 4, 2010 3:06pm

The apartments at Stuyvesant Town and Peter Cooper Village on the edge of the East Village.
The apartments at Stuyvesant Town and Peter Cooper Village on the edge of the East Village.
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DNAinfo/Molly Bush

By Suzanne Ma

DNAinfo Reporter/Producer

MANHATTAN — Thousands of tenants at Stuyvesant Town and Peter Cooper Village will continue to pay lower rents until at least June.

The rent adjustment is part of an interim agreement between developer Tishman Speyer and a group of tenants who sued the developer last year for illegally raising the rent.

The court found Tishman Speyer had been charging market rates on apartments while still receiving a city tax credit. But it may take years to work out what rate the tenants should pay in the long term.

In addition to paying lower rents, the tenants will also get reimbursed for payments made to an escrow account in November and December, according to a statement released by the tenants' lawyers.

The payments equal the difference between their market rate and rent regulated rents.

A lawsuit seeking damages for the rent increases will also proceed as a class action, the lawyers said.

Tishman Speyer bought the buildings on the edge of the East Village in 2006, anticipating an ample return on their $5.4 billion investment.

But the recession and the court’s decision to return over 4,000 market-rate units to rent stabilization left the owners struggling to cover billions of dollars in loans.

In late January, the management companies handed over the massive apartment complexes to creditors after they were unable to make payments on their loans.

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