NEW YORK CITY-In a bid to take control of Peter Cooper Village/Stuyvesant Town, a joint venture of Pershing Square Capital Management and Winthrop Realty Trust has bought the senior mezzanine debt on the 11,227-unit multifamily complex. The JV paid $45 million for Stuyvesant Town Mezzanine Loans 1, 2, and 3, which have a face value of $300 million.

In a statement issued Monday, the JV says it has initiated foreclosure proceedings on Stuy-Town, with the goal of becoming “the 100% controlling owner of the property.” The group has retained the Carlton Group as exclusive advisor. Calls to Carlton for additional comment were not returned by deadline.

Pershing Square CEO William Ackman says in the statement that the JV shares the objective of the Stuy-Town tenants’ association: “to complete a non-eviction, affordable, co-op conversion of the property, which will require the restructuring of the property's first mortgage debt.” That $3-billion first mortgage, like the mezz debt acquired by the Pershing/Winthrop JV, is currently in default.

Michael L. Ashner, Winthrop’s CEO, says in a statement, “Through this acquisition, Winthrop and Pershing Square will be working to resolve the future of Peter Cooper Village/Stuyvesant Town. We are looking forward to working with the Tenants Association, community leaders, creditors and other interested parties to ensure that our investment and our approach to recapitalizing Peter Cooper Village/Stuyvesant Town will bring long-term stability to the property and its residents. We understand the importance of this property in providing housing for moderate income New Yorkers. Among our goals is the continued supply of affordable housing for its residents for years to come.”

This past February, trustees Bank of America and the US National Bank Assn. initiated foreclosure proceedings on Stuy-Town. In June, Judge Alvin Hellerstein of US District Court in Manhattan ordered a foreclosure auction on the 80-acre complex, possibly as two separate parcels.

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