A few years after I was mustered out of the Navy following World War II, I became one of the early tenants of Stuyvesant Town.
The Metropolitan Life Insurance Company had put together a great deal for veterans. The twin apartment complexes, Stuyvesant Town and Peter Cooper Village, had thousands of apartments at affordable rents. Stuyvesant rents were a bit cheaper than the rents at Peter Cooper. [We called Stuyvesant "enlisted men’s quarters" and Peter Cooper Village "officers’ quarters." It was postwar humor. To appreciate it, you had to be there.]
But, basically, Metropolitan Life gave a great gift to New York’s middle class -- affordable housing in well-kept surroundings right in the heart of Manhattan. There well tended trees and lawns, playgrounds for the kids and benches for the older folks. There was an expanse of sidewalks lined with trees -- and young parents enjoyed wheeling baby carriages and strollers with the next generation in tow.
Now, what was once an oasis of apartments for middle income New Yorkers, faces an uncertain future. Metropolitan Life in 2006 decided to sell Stuyvesant town and Peter Cooper Village -- 80 acres of prime real estate on the banks of the East River -- 110 buildings with more than 11,000 apartments. One of New York’s major real estate companies, Tishman Speyer Properties, submitted a successful bid -- 5.4 billion dollars.
It was called the highest price ever paid for a single property, history’s biggest real estate deal. But the dreams of the deal makers were shattered. The economy crashed. The new owners had intended to raise rents, to attract younger people and make a killing, but a judge stopped the proposed rent increases. The property’s value fell to about 50 percent of what they had paid for it.
One real estate expert, Chris Cornell, joked: "If you owe the bank a million dollars, you’re in quite a bit of trouble; if you owe the bank a billion dollars, the bank is in quite a bit of trouble."
So Tishman Speyer defaulted and left the property to the creditors. Tenants are justifiably worried about what will happen to them. Councilman Daniel Garodnick told me the tenants want a solution that will protect long-term stability and affordability. "They are concerned,’’ he added "about how well the property will be maintained in the future while the ownership question is sorted out." Under Metropolitan Life, the complex was kept clean and well maintained for 60 years. Now, with the ownership in a state of flux, those amenities of life in this housing complex could be threatened.
One blogger, Scott Jagow, of American Public Media's Marketplace, says this is "a story of hubris, speculation and gentrification. It’s a story of over-borrowing, bubble insanity and greed….the largest real estate deal in American history came crashing down."
It’s a critical moment for the tenants of this lower east side complex. The tenants -- and their lawyers -- are looking for a solution, perhaps even a plan for tenants to buy the houses.
But the situation is very uncertain. Blogger Jagow said this is in part a story of greed.
This much is certain: if greed wins, middle class New Yorkers will lose. So will New York.