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Sale of NYC apartment complex raises worries

The sale of Stuyvesant Town and Peter Cooper Village, a housing complex created in the 1940s for returning World War II veterans, for $5.4 billion raised fears among residents that its unique urban history won't be preserved.
MetLife Sells Largest Apartment Complex In Manhattan For $5.4 Billion
The Peter Cooper Village and Stuyvesant Town apartment complex is seen Thursday from Waterside Plaza in New York City. MetLife sold the massive Manhattan complex of 110 apartment buildings for $5.4 billion to Tishman Speyer, with the sale expected to close later this year. Mario Tama / Getty Images
/ Source: The Associated Press

Merryl-Beth Mehlman should have been priced out of Manhattan years ago. The daughter of an insurance salesman and now a stay-at-home mom, she belongs to the ever-shrinking middle class in one of the most expensive cities in the world.

But Mehlman and thousands of others got to live in Manhattan—while others fled for the cheaper suburbs—for one reason: Stuyvesant Town and Peter Cooper Village, a housing complex created in the 1940s for returning World War II veterans.

“People were able to enjoy New York City and some of its luxuries because of affordable rent,” Mehlman said. “We could go to Broadway plays, we could eat dinner out, and we didn’t have to worry about it. And we didn’t have to move away.”

Generations of teachers, firefighters and lawyers moved in and stayed in the complex because they wanted to be near their relatives and their jobs, and they were able get a break: mostly below-market, rent-stabilized apartments, parkland and a safe environment to raise kids.

To this day, their apartments are hugely affordable. Many tenants pay between $1,200 and $1,600 per month for a two-bedroom apartment; that kind of apartment in Manhattan costs an average of $3,500.

The complex was sold by MetLife, Inc. on Tuesday for $5.4 billion to the Tishman Speyer development company in a joint venture with BlackRock Realty. Residents say Stuyvesant Town and Peter Cooper Village have a unique urban history that must be preserved; they worry that won’t happen now that the complex has been bought by developers.

‘Like small-town America’
Lifetime resident Rosemary Heath, 54, who works with her husband at their theater equipment manufacturing company, said the sale, and subtle changes to the facade, make residents feel like they’re losing a piece of their heritage.

“Some people think they are out to destroy the sense of community we have,” she said. “Some of the renovations are great, but some, well, they just take away some of our memories, our sense of identity.”

Like the fountain at the oval, the big park in the center of the development. Heath said it’s where families gathered, and in times of trouble like Sept. 11, where residents prayed and sought support. It was recently revamped.

NEW YORK - OCTOBER 19: Samuel Lichtenberg, 80, a 12-year resident, sits in the Peter Cooper Village and Stuyvesant Town apartment complex October 19, 2006 in New York City. MetLife sold the massive Manhattan complex of 110 apartment buildings for $5.4 billion to Tishman Speyer, with the sale expected to close later this year. The sale ended a high-stakes bidding war and residents are worried they will soon be priced out of what is now a middle-class apartment complex. (Photo by Mario Tama/Getty Images) *** Local Caption *** Samuel LichtenbergMario Tama / Getty Images North America

“What people have to understand is this place feels like small-town America,” she said. “My daughter went to the same grammar school I did, she played with the children of people I grew up with.”

On the outside, the complex looks like an average public housing project, boring brownish brick buildings, constructed like a fortress. The 110 buildings and 11,000 apartments aren’t luxury homes. In the early years, large families packed into cramped two-bedroom apartments. Parents slept on couches in the living room.

But, take a right onto the winding inner streets and you see manicured lawns, soft street lights, ball courts, and a community center where friends gather and play bridge. Guards patrol the area. By today’s cramped standards, the space is unbeatable.

It’s 80 acres of prime real estate, right on the East River.  Before Stuyvesant Town was even completed in 1947, would-be tenants rushed to fill out applications. The rent for a two-bedroom apartment then was $73.

“It was a very big deal when it opened,” Mehlman said. “When my parents got the acceptance letter, they thought they were the luckiest people in the whole world.”

Peter Cooper Village opened a few years later across the street.

The apartments were more spacious and had more amenities.

“The joke was that they put the enlisted men in Stuyvesant Town, and the officers in Peter Cooper,” said 14-year resident Joan Colten.

A waiting list quickly developed. At one time it was reportedly 20 years long, full of Brooklyn, Staten Island and Queens residents.

But the complex isn’t as altruistic as some tenants would like to think. Blacks were initially discouraged from moving in.

“The place was lily white in my childhood,” Heath said. “I remember one family, who was maybe Haitian, they ended up leaving, probably because they felt uncomfortable. It was nearly impossible to live there for the first 20 years or so if you were a person of color.”

During the civil rights movement, the facility integrated, which was no small task, said New York University public history professor Daniel Walkowitz.

Joseph Flores has lived in Stuy Town for 38 years, and he said he was among the first group of Hispanics to move to the area. “The face of the whole city changed, they had to start letting other people in,” he said.

Many say the city should have made more of an effort to protect the development, to back a tenant effort to purchase the facility for $4.5 billion. The Bloomberg administration examined the tenants’ proposal, as well as others, and decided to stay out of the private transaction and not back any of the offers.

‘No place in the middle’
City Councilman Daniel Garodnick, whose district includes the development and who lives there, spearheaded the tenant effort to buy the complex.

“It’s important for the city to recognize not only the historic and symbolic value of Stuy Town, but also the importance of preserving this housing for our work force,” he said.

Robert Speyer, Tishman Speyer’s senior managing director, said the residents of rent-stabilized apartments are protected by law.  He said there are no plans to convert any of the apartment into condominiums.

City regulations would allow conversion of rent-stabilized apartments if the rent rises to more than $2,000 a month, or if a household earns more than $175,000 for two years in a row. It could take several years under current rules for the apartments to hit the $2,000-a-month threshold.

Rent stabilization laws are up for review in 2011. About 25 percent of the apartments are rented at market rate.

Heath thinks it’s going to get more difficult for companies to hire middle and low-level employees because they won’t be able to afford a home within a reasonable commute.

“We will become a city of the very rich and very poor with no place in the middle,” she said. “Manhattan is for the rich, and the rest of us to the outer boroughs. We can live here, but our kids can’t? It’s not right.”