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Bwahaha! Crain's New York reports that the monster $5.4 billion deal Met Life made to sell Stuyvesant Town-Peter Cooper Village to Tishman Speyer could be derailed by a "little-known provision." Apparently the provision says MetLife cannot make more than a 6% annual profit on the complex! From Crain's:
Trautman Sanders, a law firm representing the tenant group that lost its bid to purchase the complex, discovered the condition in a 1942 agreement with New York City. According to the agreement, MetLife said it would keep its rents low, earning no more than 6%, in exchange for a 25-year city tax break.Wow - if this provision holds up, it's a whole new ballgame.City Councilman Daniel Garodnick, who opposed the sale of the complex to developer Tishman Speyer, has sent a letter to city Comptroller William Thompson, asking him to investigate. Mr. Thompson's office is reviewing the letter.
The sale, which is the largest real estate deal in American history, is scheduled to close later this week.
Gothamist on the sale of Stuy Town.
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"MetLife cannot make more than a 6% annual profit on the complex!"?
That's Perfect!
Does the contract state that they can't make a profit on any sale? Some $1000 an hour lawyers can make a contract say whatever they want it to say.
If it's an agreement signed in 1942 for tax breaks over a 25-year period, then it would have had to have been extended (or reneogtiated) in or around 1967. That was 39 years ago.
If, on the other hand, such changes to the agreement continued that particular clause - or a similar variation thereof - then, well, MetLife is f*cked.
They could also argue that the purchase price - according to their research - does in fact constitute no more than a 6% profit. Let's see if THAT one flies.
hold onto your panties hipstertrash, if anything they could wind up getting more simply by stretching out the finance package over a longer period of time. start packing for brooklyn.
Power to the people!
They could also argue for inflation adjustment, which still may be a far cry from the profit at stake, I don't really know.
"If it's an agreement signed in 1942 for tax breaks over a 25-year period, then it would have had to have been extended (or reneogtiated) in or around 1967. That was 39 years ago."
The tax breaks may have ended, but unless the agreement is specifically worded to tie them to the 6% cap so as to expire together, then the cap can 'outlive' the tax abatement almost indefinitely.
Of course, the attornies for the buyer are gonna dig dig dig and try to find their own, "little-known provision" in order to avoid the cap. and go forward with the sale.
I'm rooting for the tenants. I hope they get to stay and maybe even have a shot at buying their own units eventually.
The plot thickens !!!!!!! I'll be staying tuned to this story . I like unravealing story lines .
Get to stay??
When were they getting kicked out exactly? Why do they have a right to buy anyway? Why do they have a right to keep staying there if the owner does not want to renew their lease?
This is not public housing and some of the comments from people here are just out of touch with reality.
Maybe if some of the cheapos that moved in there 30 years ago when that's all they could afford would have moved out when the kids went to college and they made their first million some people would not be so pissed.
This sounds like a desperate attempt which will prove fruitless after 15 minutes of publicity.
For one, if you don't think the $1000-an-hour lawyers have already looked at every clause in the contracts, then you don't know what $1000-an-hour lawyers are paid for. Both the seller's and the buyer's lawyers must have determined that the clause doesn't affect the sale.
In fact, I recall reading a comment from a Metlife spokesperson months ago stating that commitments to provide low-income housing in exchange for the tax breaks ended years and years ago.