Clipper, Government Fight for Starrett City

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BROOKLYN, NY-Sen. Charles Schumer, New York Assembly speaker Sheldon Silver and Assembly Housing Committee chairman Vito Lopez are trying to push bill A795 through the Assembly quickly. Should it pass, the legislation will put all of Starrett City’s rent-stabilized units under the Mitchell Lama program, a move that flies directly in the face of both Starrett City’s current owner and its potential buyer, Clipper Equity. According to the bill, this change will be effectively immediately when the legislation is approved.

Clipper Equity, the firm run by David Bistricer, was the highest bidding party for the low- and middle-income housing area here that encompasses 140 acres, offering $1.3 billion. Once the deal was made public, Clipper executives said the company did not plan to keep the units under the Mitchell Lama program, and a spokeswoman for the company tells GlobeSt.com “Our commitment continues to be to retain affordability for Starrett City. To the extent that the proposed legislation could help achieve that goal in a reasonable manner, we support its goals and objectives.”

As GlobeSt.com previously reported, Clipper plans to remove Starrett City from the program by paying the remaining $243.6-million mortgage. The Mitchell Lama program, which was created in 1955, is meant to create and maintain middle-income housing in New York by low-interest mortgage loans and real property tax exemptions. At the time Schumer said, “Withdrawing from the Mitchell Lama program would not only put thousands of tenants at risk, but it would also raise the new owners’ taxes to $12 million a year from $3.7 million.”

At the beginning of March, Clipper’s original bid was rejected by the US Housing and Urban Development after much public opposition by both tenants and government officials. HUD’s secretary Alphonso Jackson blocked the sale due to concerns about the complex remaining affordable and called for a re-bid. During the press conference to announce the decision, Jackson said for Clipper “the door is not opened the door is actually closed,” for maintaining its winning bid.

But Clipper remained committed to the purchase and has since then continued to offer the various parties information on how it plans to maintain affordability, according to a spokeswoman. “Things are moving forward and Clipper is in this till the end,” she tells GlobeSt.com. “The centerpiece remains affordability. We absolutely believe we will maintain affordability for the current and future tenants.”

Officials of complex’s current owner, Starrett City Associates, have also indicated it will not maintain the Mitchell Lama program on the property should the Clipper deal fall through.

A795 is being sponsored by Lopez and has more than 20 listed co-sponsors.