By Suzanne Ma
DNAinfo Reporter/Producer
EAST VILLAGE — Tenants at Stuyvesant Town and Peter Cooper Village will have to pitch a "winning bid" if they want to buy back their apartments, according to one real estate lawyer.
"This is not going to be easy," said Harold Shultz, senior fellow of the Citizens Housing and Planning Council. "There are obviously buyers who would want to buy Stuy Town, and CW Capital is contractually committed to get top dollar for the project."
CW Capital, an asset company that represents the investors who hold a $3-billion mortgage on the property, took initial control of the complex at the end of January.
Tenants say they hope to stay involved with whatever CW Capital has planned for the foreclosed property.
Last week, the Stuyvesant Town and Peter Cooper Village Tenants Association launched a massive petition drive to gather support for a bid to buy back their apartments.
The next step, said Tenants Association president Alvin Doyle, is to gather those petitioners in the same room with elected officials and real estate lawyers to start drafting a plan of action.
"We're hoping that it's within our grasp," Doyle said. "Everyone is anxious to know what's going to happen.
"If a good number of apartments could be sold, that would generate a lot of money that would satisfy a lot of debt problems," she added.
But those problems grow more complex by the day.
In the latest development, Appaloosa Management, a New Jersey-based hedge fund that has acquired much of the debt on Stuyvesant Town and Peter Cooper Village, is complaining that the owner is mismanaging the massive residential complex.
The hedge fund filed papers in a Manhattan court last week accusing CW Capital, the company that acts on behalf of the rest of the creditors-turned-owners of Stuy Town, of acting "irrationally and imprudently."
In the court filings, Appaloosa argues that CW Capital should have pushed developer Tishman Speyer to bankruptcy court to avoid the hundreds of millions in transfer taxes that will be incurred if the property is sold.
Meanwhile, Tishman Speyer faces a class action lawsuit filed by a group of tenants who accuse the developer of illegally raising their rents.
The court found Tishman Speyer had been charging market rates on apartments while still receiving a city tax credit for providing affordable housing. But it may take years to work out what rate the tenants should pay in the long term.
Tenants should be prepared for a long battle, said Shultz, from the Citizens Housing and Planning Council.
"The litigation will undoubtedly take a substantial amount of time," Shultz explained. "And that probably won't be inconsistent with what CW Capital wants — which is waiting out the current decline for the market [to rebound]."
The Tenants Association is organizing a meeting for residents to find out more about their bid for ownership on March 13, at 1:30 p.m. at Baruch College's Mason Hall.
Tishman Speyer bought the buildings on the northern 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.
