The desperate attempt to cover a cash shortfall on the historic 80-acre housing development began two weeks ago when the property's owners, Tishman Speyer and BlackRock, applied for bailout funds, using the housing assets as collateral for a new federally backed bond.
The Federal Reserve Bank of New York, which received 58 applications for bailout bonds under its Term Asset-Backed Securities Loan Facility, accepted all but three of the requests, including the Stuy-Town application.
But owners of the project insist such an application never existed. "The owners of Stuyvesant Town and Peter Cooper Village, a joint venture led by Tishman Speyer and BlackRock, never submitted an application to the Federal Reserve Bank for funding through the Term Asset-Backed Securities Loan Facility," says a company statement. "Recently published media reports stating otherwise are erroneous."
According to the Post, the New York Fed gave no reason for rejecting the request. The value of the property has plummeted by more than one-half to about $2 billion due to its inability to raise regulated rents to market rates.
Earlier this month, Stuy-Town's owners and tenants reached an agreement to adjust rents downward for January and February 2010. The court order, issued by Justice Richard B. Lowe III of the state Supreme Court, also says the two sides are to hire a consultant to calculate the difference between the stabilized rents and negotiated rents for each unit by Jan. 15.
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