In a major financial blow to the owners of Stuyvesant Town and Peter Cooper Village, the State Court of Appeals ruled that some 4,000 rent-stabilized apartments were illegally deregulated in the past decade. That means that the current ownership group, led by Tishman Speyer and BlackRock (which are already basically out of cash for the project) and prior owners Metropolitan Life will have to pay an estimated $200 million in damages and rent overcharges to tenants. According to the ruling, the complex was receiving J-51 tax breaks from the city for major renovations, which barred them from luxury deregulation, and they’ll have to pay back the tenants for the higher rents — and adjust future rents accordingly (they continue to receive the tax breaks). Of course, figuring out just who is owed what could take years. But as it stands now, a whole bunch of current and former tenants look to get a lot of money back. Whether or not the “dire financial consequences” the owners predicted for “themselves and the New York City real estate industry generally” come to pass also remains to be seen.
Court Deals Blow to Owner of Huge Apartment Complex [NYT]
Related: How Tishman Speyer got into this mess in the first place.
