MetLife Stuy Town Deal Tripped Up by 50-Year-Old Fine Print?

20061116stuytown.jpg
Photo: AP


There's a major plot twist in the story of Stuyvesant Town's impending $5.4 billion sale, potentially the largest real-estate deal in history. As any good plot twist should, it begins with a lawyer, alone in a library after hours, poring over a dusty folio (or so we'd like to think). He's representing the megacomplex's tenants (who lost their own bid for the place to Tishman Speyer), and he has unearthed an obscure provision in the 1942 agreement between the city and MetLife, Stuy Town's owner. Under its terms, MetLife would get a 25-year tax break in exchange for a promise: The insurance company would keep rents low and, crucially, it would cap its annual profit at six percent.

The tenants' lawyer has thus concluded that, should MetLife go on with the sale, it must either dissolve its subsidiary named in the agreement or fork over all excess profit to the city (yeah, right). MetLife, meantime, is of course shrugging this off as "a last-minute, desperate attempt to interfere." Tishman Speyer is staying out of the mess altogether. And the ball is now in the city comptroller's court, where the discovery may actually get some traction. Consider Comptroller William Thompson's original statement when the sale was announced: "I am deeply disappointed that Metropolitan Life rushed to sign a deal without giving serious consideration to the offer submitted by the residents of Stuyvesant Town and Peter Cooper Village." Is this his chance to remedy that disappointment?

MetLife Real Estate Deal Could Be Derailed [Crain's]
Thompson Statement, 10/17/06 [NYC.gov]