Big Winner in Stuy Town? You!
Eliot Brown Jan. 26, 2010, 6:46 p.m.
The list of those pummeled by the debacle of a real estate deal at Stuyvesant Town and Peter Cooper Village is a wide-ranging one. It’s vaporized entire investments made by, to name a few, two California pension funds ($600 million), a Florida pension fund ($250 million), and the Church of England ($70 million), along with those of controlling partners Tishman Speyer and BlackRock, which each threw in $112 million before they agreed to surrender the property to creditors this week.
And then there’s the City of New York, which has done quite well for itself off the soured deal, thank you very much.
In all, the complexes’ owners have poured more than $300 million into city coffers, thanks to taxes that were affected or triggered by the $5.4 billion sale in late 2006. (The city could use any cash it can get. Amid the recession, it faces a deficit of more than $4 billion for the next fiscal year.)
Most of that $300 million-plus never would have flowed forth without the sale. The transfer and mortgage taxes alone brought in $190 million, according to city records. From there, the inflated sale price sent the complexes’ market value soaring 40 percent since 2006, which in turn brought in new property taxes: The total bill was more than $48 million this past year alone, according to property records, a number that will likely stay high for a few years more given the multiyear assessment method the city uses to collect property taxes.
And now that the owners have defaulted on their mortgage, there could be more riches to come.
Should the property be sold again to a new owner, as often occurs in a foreclosure, transfer and mortgage taxes would once again flow to the city. The amount of those taxes? Deutsche Bank analysts estimate it could top $100 million.