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The state's highest court, the Court of Appeals, will hear arguments between Stuyvesant Town owner Tishman Speyer and Stuy Town tenants. The NY Times reports that Tishman and BlackRock Realty were given permission to appeal a ruling that said it wrongfully raised rents at the huge complex. Tishman bought the rent-regulated complex for $5.4 billion, hoping to profit on market-rate rents, but an appellate division found the rent increases shouldn't have happened since it was receiving tax breaks associated with rent-regulated properties. City Councilman Daniel Garodnick thinks the tenants will win in the end, "This is a landlord-tenant dispute that hinges on basic principles of fairness to taxpayers and fairness to tenants. We look forward to a speedy hearing and resolution by the state’s highest court." If the tenants succeed, Tishman will have to pay a rumored $200 million in back rent, and other landlords around the city who took advantage of the tax breaks may also have to pay back rent to their tenants.
Tishman Can Appeal Stuy Town Rent Ruling
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Depending on how much real money Tishman has into this project it might be better for them to walk away from it.
There is no real money. This will just put Tishman out of business (at least as far as Stuy Town/PCV is concerned). They won't be able to sell unless they're willing to take pennies (micro-pennies?) on the dollar, and they were already having trouble getting the exorbitant rents they need to be profitable before the economy collapsed. There was a lot of scuttlebutt about foreclosure at the end of last summer.
That there's enough liquidity to cover operating expenses, new costs, this lawsuit and the interest on the incredible sum they borrowed to do the "biggest real estate deal of all time" seems unlikely in today's climate.
Tishman Speyer only put up $56 mil. If they walk, the investors are stuck holding the bag, not them.