Stuy-Town apartments were unlawfully
NEW YORK CITY-Tenants who filed a class-action suit in 2007 against the then-current and former owners of Peter Cooper Village/Stuyvesant Town have reached an agreement with the defendants to settle past and future rent overcharge claims, court documents show. The settlement received preliminary approval Thursday by Justice Richard B. Lowe III, chief justice of the New York State Supreme Court’s Appellate Term, First Department, with a hearing on final approval scheduled for April 9, 2013.
The $68.75-million settlement covers rent overcharges on 4,311 apartment units at Stuy-Town between Jan. 22, 2003 and Dec. 31, 2011. The two trusts that hold the $3-billion senior loan on the 11,229-unit apartment complex in Midtown South, PCV ST Owner LP and ST Owner LP, will contribute $58.25 million toward the settlement, while former owner Metropolitan Tower Life Insurance Co. is putting in $10.5 million. MetLife developed the complex in the late 1940s.
An October 2009 ruling by the New York State Court of Appeals found that a partnership led by Tishman Speyer Properties, which paid $5.4 billion to buy the complex from MetLife in 2006, unlawfully deregulated apartments at the complex while continuing to receive J-51 tax abatements. The partnership defaulted on the senior loan in 2010, and operations of the complex were later turned over to special servicer CWCapital Asset Management on behalf of the trusts.
In a release, Alexander Schmidt of law firm Wolf Haldenstein Adler Freeman & Herz LLP, the plaintiffs’ lead attorney, says that when it’s finally approved, Thursday’s settlement “will bring the total recovery in the lawsuit to at least $146.85 million” when combined with past refunds and rent savings the tenants have already received. “There will also be future benefits.”
Andrew MacArthur, managing director of CWCapital, says in a statement that his firm has “worked hard to try to balance the interests of residents and bondholders, recognizing that our fiduciary responsibility to investors must respect the concerns of tenants who call Peter Cooper Village/Stuyvesant Town home.”