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Stuy Town Sale Closes, But Not Before a 'Nuisance' of a Lawsuit

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[Scott Davies/flickr]

The $5.45 billion sale of Stuyvesant Town to Blackstone Group and Ivanhoe Cambridge closed on Friday, but as with most deals concerning the 110-building development, not without plenty of turmoil. The Times reports (h/t TRD) that commercial realty behemoth SL Green threatened to delay the sale with a lawsuit that stems in part from the group's involvement as a stakeholder of the property, which they lost $200 million on when Tishman Speyer and BlackRock Realty defaulted in 2010.

The threat was really a vindictive one (and this is where it gets confusing): CWCapital Asset Management, the party now tasked with selling the development after they took control when Stuy Town's former owners defaulted on the $5.4 billion dollar deal they struck in 2006, is a subsidiary of Fortress Investment Group. Fortress is a partner of Andrew Penson, the owner of Grand Central Terminal who has been in a long-standing feud with SL Green over their major Midtown East project One Vanderbilt. Penson recently sued the development company to the tune of $1.1 billion $475 million, over claims that the incoming tower has devalued the terminal's air rights. Ah, there's the rub. [Update: A legal representative for Andrew Penson has reached out to clarify that Penson's suing the city for $1.1 billion and SL Green for $475 million. Curbed regrets the error.]

The Times reports that Blackstone Group wanted the deal done by December 31 "or else." SL Green's lawsuit would delay any progress with the deal, and ended up walking away with $10 million of "go away" money, three sources close to the deal told the Times. The Stuy Town deal closed for $5.45 billion—$500,000 more than in 2006—on Friday. "Clearly, there's no love lost between the two groups," an anonymous executive involved in the transaction told the Times. "SL Green's threat was close enough to the closing that everyone was afraid. But it was obvious to all the parties that it had no merit. It was a nuisance and a distraction."

SL Green's threat also ruffled some feathers with the city, who praised the $5.45 billion agreement struck in October. The deal protects 5,000 of the complex's 11,232 apartments as affordable housing for the next 20 years, a boon to the de Blasio administration's crusade for affordable housing throughout New York City.
· $5.45 Billion Deal for Stuyvesant Town Completed After Threatened Lawsuit [NYT]
· SL Green given $10M to withdraw suit blocking Stuy Town deal: report [TRD]
· New Stuy Town Deal Will Preserve 5,000 Affordable Units [Curbed]
· Beleaguered Stuy Town Complex Is Up For Grabs Again [Curbed]
· All Stuy Town coverage [Curbed]