Frequently Asked Questions: Stuyvesant Town and Peter Cooper Village Sale to Blackstone

Stuyvesant Town & Peter Cooper Village Sale

Frequently Asked Questions

October 24, 2015

Q: Is it true the property was sold?

Yes. CWCapital has entered into an agreement to sell Stuyvesant Town and Peter Cooper Village to a partnership of the Blackstone Group and Ivanhoé Cambridge (a Canadian public pension fund).  The transaction is expected to close by the end of this year.  In the process, Blackstone made significant concessions to the tenants and to the City about long-term affordability, Roberts tenants, keeping Peter Cooper and Stuyvesant Town as a unified whole, and preserving our open spaces.

Q:  If I live in a traditionally rent-stabilized apartment today in Stuyvesant Town & Peter Cooper Village, what does this mean for me?

Your unit continues to be governed by the rules of rent-stabilization.

Q. As a traditionally rent-stabilized tenant, will I now need to "income qualify" for my apartment?

No.  Your apartment continues to be governed by rent stabilization, and there is no income qualification for your unit. (But remember: rent stabilization allows deregulation based on high income when your unit hits $2,700 and your income goes above $200,000 for two consecutive years. This can only happen after 2020 when the J-51 tax abatement expires.)

Q.  As a traditionally rent-stabilized tenant, will I still be able to pass my apartment on to my child?

Yes.  Succession rights continue to exist for rent-stabilized tenants. 

Q:  If I am a Roberts tenant, and my rent is below the market rate, what does this mean for me?

We were able to negotiate additional protections for Roberts tenants under this deal.  Once the J-51 period expires in 2020, rent increases on below-market units will be capped at 5% per year for 5 years.

Q: Is there any chance I might own my unit?

While conversion to homeownership is not currently part of the initial structure, Blackstone has said they are open to discussing this possibility down the line.

Q.  Why did the New York Times report that Blackstone "agreed not to pursue a condominium conversion"

Blackstone and the Mayor's Office believe that was an error and asked for a correction. A commitment not to do a conversion was not a term of any agreement.

Q:  How does this deal compare to the Tenants Association’s plan?

The deal satisfies nearly all of the core goals of the Tenants Association’s plan, namely: the long term preservation of affordable housing in the community, the protection of our open spaces, and keeping Stuyvesant Town and Peter Cooper Village as a unified whole.  It does not, however, have a homeownership component at this time.  

Q:  How many units will be preserved as “affordable”?

In this agreement, Blackstone has agreed to preserve 5,000 units as affordable for the next generation of middle-income tenants for a minimum of 20 years. These units will be rented to people who “income qualify.”  Absent any further agreement with the City or State in the future, after 20 years rent increases would be phased in over a five year period (from 2036 - 2041).  It stems the loss of about 300 rent-stabilized units every year.

Q: What future tenants will qualify to live in Stuyvesant Town and Peter Cooper?

For the 5,000 units under this agreement, rents will be capped at a price where a future middle-income tenant can afford them.  A future tenant will need to “income qualify” for the units, but only future tenants.

Q:  How will future tenants income qualify for the 5,000 affordable units in Stuyvesant Town and Peter Cooper?

To income qualify for 4,500 of the 5,000 units, a tenant would need to earn no more than 165% of the area median income (roughly defined as $128,205 for a family of 3).  For the other 500 units, tenants would need to earn no more than 80% of the area median income (roughly defined as $62,150 for a family of 3). The income levels are different for families of varying sizes.

Q.  Which units will be kept in the 5,000 to be preserved?

While the deal does not specify which units, it does require them to be equally spread out across buildings and within buildings.  They will have a reporting requirement to the City on their progress, and what they have done.

Q.  Will market rate tenants have an opportunity to rent one of the 5,000 affordable units?

Yes, if they income qualify. 

Q:  What does Blackstone get in return?

Blackstone will get a one time waiver of the mortgage recording tax, and the City’s Housing Development Corporation will fund a loan up to $144 million.

Q: Is Brookfield part of this deal?

No. We appreciate that Brookfield stood ready to be the capital partner to the Tenants Association to help them put a bid on the table. Unlike the last time the property was sold, there was no public auction, and therefore no formal way for the tenants to make a bid.

Q. We have been talking about this for years – why are we just learning about this now?

Ultimately, CWCapital, as the owner of the property, decided not to embark on a public bidding process.  While many of us would have liked the opportunity to again put forth a public tenant bid – the sale took place in a way that did not allow for it. 

Q.  When was it clear that conversion was off the table?

Conversion only really became off the table when CWCapital indicated its desire to sell to Blackstone in a deal that involved keeping Peter Cooper and Stuyvesant Town as a rental property.  Blackstone has committed to continuing the conversation with us, but it is not in their current plans.

Q.  Will there be any changes to the MCI system? 

There are no formal changes to MCIs as part of this agreement. We will need to continue to push for MCI reform in Albany, and MCIs will be one of the first issues elected officials and the TA will raise with the new owner.

Q: Is Blackstone hoping to sell the excess development rights of the property?

Yes. But there is no specific proposal to do so at this time. Any proposal would need to be considered by the local Community Board and Borough President, and approved by the City Planning Commission, the City Council, and the Mayor.

Q: Has Blackstone put out anything in writing about their plans?

Yes.  Blackstone set up a, which has additional information.

Q: What would have happened without the agreement with the City?

Had CWCapital sold the complex without any agreement with the City, we would have continued to lose about 300 rent-stabilized units per year, and ultimately all units in Stuyvesant Town and Peter Cooper would become market rate over time.

Q. Who is going to be the management company?  How do I know that Blackstone will deal with the dorms, the noise, the renovation issues, and everything else?

Blackstone has not yet decided who will serve as the management company. There will be a good time to address the various quality of life issues that concern us.

Q: What happens next?

While a contract of sale was signed on October 19, the closing will not take place until the end of the year.

Sample Tenant Scenarios

Sample Tenant #1: George
Resident since 1994
Rent: $1700 for a one bedroom in Stuyvesant Town
Status: Traditionally rent stabilized (non-Roberts).

George is a traditionally rent-stabilized tenant. He will remain stabilized as long as he lives in his current apartment and rent stabilization laws continue. His rent increases will be determined by the Rent Guidelines Board, and he continues to have succession rights.  For George, the benefit of this deal is that Blackstone has little incentive to take the steps that Tishman Speyer did to try to vacate the units of traditionally rent-stabilized tenants.  Also, if rent-stabilization were not renewed, George’s rent would be capped as if he were a new tenant in one of the 5,000 affordable units. 

Sample Tenant #2: Lauren
Resident since 2005
Rent: $3,200 for one bedroom in Peter Cooper
Status:  Below market Roberts tenant

Lauren moved in just before Tishman Speyer bought the property, and she was eventually a member of the class in the Roberts case.  Her rent is set at a level that was determined by the Court and DHCR as part of the settlement of Roberts, and that rent continues to be applicable until 2020 when those benefits expire.  After 2020, to the extent that her rent is below the market rate, Blackstone will cap her rent increases to 5% for five years.  

Sample Tenant #3: Mary
Resident since 2013
Rent: $4,600 for 2 bedroom in Stuyvesant Town
Status: Market rate Roberts tenant

Officially a rent-stabilized tenant by virtue of the Roberts decision, Mary’s rent is already at the market rate. Pursuant to the Roberts decision, her rent can only increase up to its legal cap, but have the potential to grow at market rates because she has a “preferential rent.” In 2020 when the J-51 tax benefit expires, she will no longer be a rent-stabilized tenant. Her rent can be raised or lowered rents based on the market.