The Real Deal New York

Trailer parks are banned from Stuy Town … and 3 other things we learned from the $5.3B deal’s term sheet

Senior activities, loans that aren't really loans ... & more
By Konrad Putzier | November 06, 2015 02:05PM

Last month, the city and the Blackstone Group signed an agreement to keep 5,000 units at Stuyvesant Town-Peter Cooper Village affordable. The term sheet for the agreement is publicly available. But it’s 12 pages long and a pretty dry read. For your convenience, we’ve summarized the main points in a listicle:

1. No trailer parks

 

“None of the Affordable Units will be used by Purchaser on a transient basis or as a hotel, motel, hospital, nursing home, sanitarium, rest home or trailer park.” I guess if you’re spending $5.3 billion, you want to be absolutely sure there are no misunderstandings.

2. Under the deal, there may be no affordable apartments left in Stuy Town 25 years from now.

This is no secret, but it deserves to be hammered home. Under the agreement, Blackstone can likely reduce the number of affordable units from 5,000 to almost zero between 2035 and 2040.

Here’s why: Blackstone committed to keeping 5,000 units rent-controlled. If, say, vacancy decontrol brings the number of affordable units down to 4,500 next year, Blackstone will have to make sure 500 extra units become affordable for new tenants. But Blackstone only has to keep these new “future affordable units” rent-controlled until 2035 – not for as long as the tenants stay there. Between 2035 and 2040, it can raise the rent for all “future affordable units” to market level in annual installments.

According to Deputy Mayor Alicia Glen, Stuy Town has been losing about 300 affordable apartments per year to vacancy decontrol. If this trend continues, almost all current affordable units in Stuy Town will be either market-rate or “future affordable units” by 2035. By 2040, these will likely all be market-rate units.

3. Funtivities!

Under the term sheet, Blackstone has to offer a “targeted schedule of senior activities and interest groups to engage the senior community. Some examples would include book clubs, movie nights, dance/exercise classes, etc.”

I have a few questions: Will those dance classes be taught by Blackstone executives? Is Jonathan Gray good at dancing? And what would the reading list for a Blackstone book club look like? (Email me at kp@therealdeal.com if you have any suggestions)

4. About that $144 million city “loan” …

Is a loan still a loan if it carries no interest and you never have to pay it back?