under an interimagreement that was extended Wednesday. The agreement, which wasset to expire at the end of January, adjusts market-rate rents toestimated rent-stabilized levels for a group of tenants thatsuccessfully sued the massive complex's ownership in a case thatwent all the way to the state's highest court. The court ruled lastOctober that Stuy-Town's ownership, a joint venture led by TishmanSpeyer Properties and Blackrock Realty, illegally deregulatedsome 4,400 units at the 11,227-unit complex on Manhattan's EastSide.

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According to a joint statement issued Wednesday by the JV andtwo law firms representing the tenants, Wolf Haldenstein AdlerFreeman & Herz LLP and Bernstein Liebhard LLP, "Each affectedtenant will also continue to be afforded certain rights as ifpursuant to the Rent Stabilization Law, including renewal andsuccession rights." Additionally, tenants will be reimbursed fortheir November and December 2009 rent payments, "either by way of acorresponding reduction of current tenants' March 2010 rent billsor a refund check issued to former tenants who moved after payingtheir November and/or December rents," according to thestatement.

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The two sides are working to negotiate a settlement to thelawsuit, which under Wednesday's agreement will proceed as a classaction. They expect that rents for the 4,400 affected units will berecalculated over the next few months by an independent consultant,"who has been selected but not yet formally retained," thestatement says.

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Since the two sides worked out the interim agreement inDecember, Stuy-Town's current ownership first defaulted on the$3-billion mortgage, then turned the 56-building complex over to creditors lastmonth. A number of high-profile would-be buyers, including DonaldTrump and billionaire Wilbur Ross, have said publicly that they'dbe interested in buying Stuy-Town, but a change of ownership couldbe months away.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.