The Real Deal New York

CWCapital offers city time to draw up Stuy Town deal

Possible arrangement would swap tax breaks and incentives for affordable housing preservation
June 13, 2014 10:45AM

New York City  just bought itself more time in its bid to preserve affordable housing at Stuyvesant Town and Peter Cooper Village.

CWCapital Asset Management is giving the city two months to develop a package of tax breaks and other incentives. In exchange for such a package, CWCapital would cooperate in structuring a bidding process that favors buyers who would keep some of Stuyvesant Town’s apartments below market rate, the Wall Street Journal reported.

Currently about half of the 11,000 apartments at the complex are below market rate, down from roughly 73 percent in 2006 when a venture led by Tishman Speyer and BlackRock purchased the building, according to the Journal. More than 2,000 apartments have been converted into luxury and market-rate apartments since then.

Last year, the complex’s owners reached a deal with the New York attorney general’s office to forego 2,000 mid-lease rent hikes.

CWCapital represents a group of senior bondholders who took control of the venture in 2010 following a default. Bloomberg News reported in May that Fortis Group, which is owned by CWCapital, is readying a $4.7 billion buyout.

On Thursday, mortgage giants Fannie Mae and Freddie Mac agreed to consult the city and tenant groups before participating in any purchase that would reduce the low-cost apartment count at Stuy Town or Peter Cooper Village. [WSJ]Tom DiChristopher