The Real Deal New York

New study says city exaggerated benefits of 2015 Stuy Town deal

Blackstone Group and Ivanhoé Cambridge struck deal to buy complex for $5.3 billion
January 05, 2018 09:10AM

Stuyvesant Town, Jonathan Gray and Mayor Bill de Blasio

A new study claims the $5.3 billion deal for Stuyvesant Town in 2015 isn’t all it’s cracked up to be.

The city’s Independent Budget Office plans to release a report today saying that the affordable housing benefits of the transaction were exaggerated, according to the Wall Street Journal.

Under the terms of the 2015 deal, buyers Blackstone Group and Ivanhoé Cambridge pledged to keep 5,000 apartments affordable in Stuyvesant Town and Peter Cooper Village for 20 years, and the city pledged to give the owners $220 million in financial assistance, with benefits including a waived $76 million mortgage recording tax and an interest-free $144 million loan. Blackstone and Ivanhoe Cambridge also receive air rights benefits from the complex.

The IBO study argues that current tenants were likely to stay in their apartments for two-thirds of those 20 years with or without the new rules. Additionally, although part of the agreement was that 10 percent of apartments would go to low-income New Yorkers as vacancies open up, the IBO predicts that a low turnover rate will result in low-income tenants occupying only 3 percent of apartments over the 20-year period.

New York City Housing Development Corp. president Eric Enderlin defended the city’s Stuyvesant Town deal, dismissing the IBO study to the Journal as “an academic, ivory tower analysis.”

Enderlin called the IBO study “pretty outrageous.”

He said the deal provided certainty to existing tenants and future tenants of all 5,000 affordable units at the complexes and removed Blackstone and Ivanhoe Cambridge’s inventive to push rents to market levels as apartments became vacant. In all, he claims 5,000 tenants would save $500 million in rent from the deal the city cut with the owners. [WSJ]Eddie Small