Tishman Loses Stuy Town Fight; May Have to Pay $200 Million, Default
When Tishman Speyer Properties took thousands of units in Stuyvesant Town and Peter Cooper Village -- longtime middle-class bastions on the edge of the hyper-gentrified East Village -- out of regulation and raised rents, tenants sued and a court found that the properties could not be deregulated, because Tishman and former owner Met Life enjoyed J-51 tax breaks and building assistance from the city. So Tishman took the case to the This is a hard blow to the realtor, which may have to pay back as much as $200 million in back rent and damages. Tishman and partner Black Rock Realty bought the complexes for $5.4 billion in 2006; higher rents were apparently part of the deal. Now that Tishman is looking at lower revenues in the long term as well as a big payout -- whether in cash or in future rents -- and depreciation has brought the complexes' value down to about $2 billion, experts says that default is probably the next step.
Meanwhile Tishman Speyer, perhaps anticipating this result, has reportedly ordered a wave of inspections in the complexes, by means of which they may move to evict some tenants for violations.
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