A day after the state Court of Appeals either bravely stood up for tenants' rights or completely destroyed the real estate industry (depending on whom you ask), there is still?surprise?much to talk about! Like that total annihilation thing. Landlord groups such as the Rent Stabilization Association (gotta love that sneaky name!) had argued that the court's decision in the Stuyvesant Town lawsuit?that landlords MetLife and Tishman Speyer improperly deregulated about 4,400 apartments while receiving tax breaks from the city?would lead to all sorts of problems. And on the first day post-ruling, the Times reports that landlords are already walking on eggshells and canceling new investments. But they're not the only ones gripped by The Fear.
Tenants have their own worries (when will the rebates come, will maintenance and services decline, etc.), and city agencies such as the Department of Housing and Community Renewal are upset they may be inundated with petitions and be forced to actually do work. Also, reported sightings of Conquest, War, Famine & Death riding into town over the George Washington Bridge have left everyone feeling uneasy.
Meanwhile, following yesterday's celebratory press conference just outside Stuy Town, the NYT's Manny Fernandez did a bit of wanderin' around the complex. In another piece, he chats up tenants. Shocker, most market-rate renters are thrilled by the prospect of cutting their rent in half (even if no one is quite sure when that will happen), while rent-stabilized tenants are glad Tishman Speyer took a beating. Said one Stuy Towner about TS's management since buying the 110-building complex in 2006: "We don't need landscaping. We never did. Just keep the rents low and paint our apartments when they're due. They put annuals in. Stop it. Put perennials in." "Put Perennials in," the "Live Free or Die" rally cry of a new generation.
But what about the ruling itself? That's where things get really fun! (For fans of legalese.) The New York Law Journal has this pithy summary of the court's judgment, but for those not wanting to slip into a coma, there is Steve Cuozzo's take in the Post on Tishman Speyer's "gamble." The Cuozz is pro-decontrol but anti-hubris:
The law bars deregulating units "which became or become subject to [stabilization] by virtue of receiving tax benefits" under the city's J-51 program. That could mean deregulation is not disallowed at Stuy Town because it became rent-stabilized 18 years before previous owner MetLife first received J-51 benefits. At least that's how Tishman interpreted it. So did the city's Dept. of Housing and Community Renewal and a lower court.
But it could also be read as meaning that Stuy Town is locked into stabilization permanently simply because it enjoys the tax breaks.
With so much hanging on the meaning of "by virtue of," Jerry and Rob Speyer nonetheless rolled the dice.
Their overconfidence came on top of overpaying.
Well, if Tishman Speyer wants to bail, there's reportedly one buyer still interested.
· Stuyvesant Town Ruling Worries Tenants and Landlords Alike [NYT]
· Joy and Questions Among Residents of Complex [NYT]
· Why Jerry's $5.4B gamble failed [NYP]
· All Stuyvesant Town coverage [Curbed]