Friday, February 16, 2007

Starrett City Sale Going South (in a Hurry)?

Every now and then, you can feel a deal starting to fall apart as criticism mounts. So it is with the $1.3 biliion sale of Starrett City as public officials pile on. One of thoese leading the charge is Sen. Charles Schumer, yesterday he sent out a letter and press releases that said the deal was made through a "fatally flawed" bidding process that excluded the Department of Housing and Urban Development.

The release said in part:
Today U.S. Senator Charles E. Schumer demanded Starrett Associates go back to square one on the Starrett City sale. The Senator, who is chair of the Senate Housing sub-committee said today that the bid process was fatally flawed, having excluded the federal government, which has subsidized Starrett City for years so that it could maintain its affordability. Schumer noted that the Department of Housing and Urban Development has the right to approve the deal, and has expressed deep skepticism due to the potential of massive loss of affordable housing stock.

“Leaving the Feds out of the Starrett sale was a fatal flaw. We are full partners in Starrett City. Federal taxpayers have invested many, many millions of dollars to maintain affordability there. Moreover, Starrett Associates were only able to maintain a profit and build up their equity because of this partnership. It is clear that Starrett Associates need to reopen the bidding process to ensure that HUD, their full federal partners in this deal, have a seat at the table,” said Schumer. “Maintaining Starrett’s affordability is the top priority in moving forward on this deal. For more than 30 years Starrett City has provided safe harbor for middle and working class New Yorkers in the increasingly turbulent sea that is this City’s housing market. With 5,881 apartments and residents from all walks of life, the development has been instrumental in the nrevitalization of Canarsie and East New York. We must make sure this happens the right way.”
In the meantime, the Daily News is reporting that the new landlord may have to raise rents because the seller "did not accurately disclose to bidders how much rent the vast complex generates...The sellers failed to mention a $10 million rent concession to as many as 1,000 tenants at the sprawling development of 46 buildings in south Brooklyn, the source said."

About 90 percent of the tenants of the 5,881 apartments at Starrett City get rent assistants. The buyer's history at 71 other buildings his firm owns includes 8,792 housing violations.

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