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BROOKLYN, NY-Starrett City has been sold to Clipper Equity LLC for $1.3 billion, according to a source. Bids for the 140-acre site, also known as Spring Creek Towers, were due to CB Richard Ellis on Monday.

The 140-acre complex was put on the market in November, as reported by GlobeSt.com. It was created in the 1960s for middle-class minorities. An estimated 14,000 people live in the complex, which almost replicates a city, including a 124,000-sf shopping center and an elementary and middle school. It is considered the largest federally subsidized housing complex in the US. Starrett City Associates, which is led by Disque Deane, has owned the complex since 1972.

Over the past several weeks residents and local politicians spoke out against the sale of the affordable-housing complex with concerns that the complex would no longer remain affordable. Tenant groups held rallies and Gov. Eliot Spitzer promised to work to keep it affordable.

After the sale was made public, New York Acorn, an organization of low- and moderate-income families, issued a statement doubting the ability of Berkshire to pay $1.3 billion for the asset and keep it affordable. Bertha Lewis, executive director of the group says, "There is simply no way that Berkshire can afford to pay $1.3 billion for Starrett City and still keep the complex affordable. By offering to pay a quarter of a million dollars per apartment, these developers are virtually guaranteeing that they will raise rents, cut services and build market rate housing in order to squeeze a profit out of their wildly inflated offer."

The group plans to appeal to state and local government leaders to stop the transaction from completing. "We urge the Bloomberg administration to make clear to Berkshire that no changes in Starrett City's zoning will be forthcoming for a bid that is so reckless and financially irresponsible," Lewis says. "Today we are also calling on Gov. Spitzer to draw a line in the sand and make clear that Starrett City will not leave the Mitchell-Lama program. Finally we are urging the US Department of Housing and Urban Development to intervene to stop this sale based on Berkshire's poor track record maintaining multiple properties its principals and investors own throughout New York City."

Late in the afternoon on Thursday Speaker Christine Quinn issued a statement expressing her concerns of the sale and Berkshire's track record as a real estate company. "We are very concerned about the track record Berkshire and the individuals associated with it have on other Brooklyn housing projects, where they have accumulated almost 8800 open housing violations, including over 1,000 that are considered hazardous."

Quinn says she would like to see Berkshire's plans to keep Starrett City affordable. "Losing nearly 6,000 apartments from the City's affordable housing stock would be a blow to the families of Starrett City, and would severely worsen our already desperate citywide shortage of affordable housing."

The deal was brokered by CB Richard Ellis' Darcy Stacom and William Shanahan, who also arranged the sale of Stuyvesant Town and Peter Cooper Village for MetLife in October for $5.4 billion.

Calls to CBRE and Starrett City Associates' spokesperson Martin Mclaughlin were not returned. Original reports of the sale named Bershire LLC as the purchasing company. Berkshire is another company of David Bistricer, a principal at Clipper.

Instant Insights /

Starrett City Sells to Clipper Equity for $1.3B

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