The owners of the 110-building housing complex, Tishman Speyer Properties and Black Rock Realty, finally announced on Monday that they will hand the property back to their creditors, after defaulting on a $16.1million loan payment this year. Tishman Speyer, which also controls the Rockefeller Center and the Chrysler Building, bought the complex for $5.4 billion just four years ago in what was the most expensive real estate deal of its kind ever made in the history of the United States. Now, because of the default, investors from the Church of England to the government of Singapore have lost hundreds of millions of dollars.
Although the real estate crash is what likely precipitated Tishman Speyer’s financial woes, it is abundantly clear that mismanagement and generally dodgy landlord stuff led to their decline. In October 2009, NY State’s Court of Appeals ruled that the owners of Stuy-Town illegally raised rents on rent-controlled apartments while still enjoying city tax breaks for providing low-cost housing. Tishman Speyer now owes residents $200 million, which has yet to be paid. Moreover, management’s negligence strained relations between tenants and Tishman Speyer. Tenant-run blogs bemoan the poor state of maintenance, the acerbic legal battles and the loss of the complex’s middle-class identity.
Hannah Coakley is a Steinhardt graduate student and a resident of Stuy-Town. She said that in spite of being marketed as “luxury living,” her Stuy-Town life has been characterized by peeling paint, ignored maintenance requests and inexplicable spikes in rent. “For the quality of the apartment, $3,700 a month just isn’t worth it,” said Coakley, who moved into her three-bedroom apartment last summer. “They frankly don’t give a shit about the residents.”
Becca Putter, a Stuy resident who graduated from CAS in ’09, said, “Whether it was ignorance of maintenance issues, service requests, or a general lack of affability, Tishman Speyer never failed to make a bad impression on its residents.”
What will happen next isn’t clear. Many of the older residents (read: middle-class and retired tenants who were there before Tishman Speyer’s acquisition) long for a return to the simpler and more affordable days of Stuy-Town. Unfortunately that vision doesn’t include the million or so NYU students who live there now. The kicker of this New York Times article about tenant reactions to Monday’s announcement featured a quote that effectively linked the evil, corporate realtors to the droves of their NYU minions.
“[Tishman Speyer] turned it into an N.Y.U. campus,” said Terence Jones, 51, an electrician who has been a resident for a dozen years. “We’re hoping it can go back more to the way it was before it got sold.”
That’s pretty much the same complaint echoed around the rest of downtown Manhattan. It’s possible that much of the middle-income housing could be be restored in the next few years, but I seriously doubt that the NYU residents of Stuy-Town will need to start looking for a new place anytime soon. If Stuy-Town ceased to be such a hot option for NYU students, but where would they flock to instead?