Ackman Plants Seed of Nation’s Biggest Co-op Conversion
Laura Kusisto Sept. 13, 2010, 4:15 p.m.
Two investors vying to purchase Stuyvesant Town have released a proposal that’s sure to give the powerful tenants’ association pause.
Bill Ackman and partner “have proposed a partnership with the 25,000 tenants there that would create an affordable housing co-op and allow the investors to reap a profit,” reports The New York Times.
The tenants’ association wouldn’t have to pay for its stake, but it would have full veto rights over all major decisions and would be involved in the plan to turn the units into affordable co-ops, says the letter Mr. Ackman sent to the association, according to Crain’s.
The partnership, which consists of Mr. Ackman’s Pershing Square Capital Management and Winthrop Realty Trust, is embroiled in a complex legal batle with a rival lending group to foreclose on the property. The partners have purchased $300 million of Stuy Town’s secondary loans, while another group of lenders, which holds the property’s $3 billion mortgage, has moved to block them from foreclosing.
The case is set to be decided by the end of this month, but the Ackman partnership may hope it can gain the upper hand by appealing directly to tenants who are anxious to hold onto their homes in one of the country’s most prominent middle-class housing complexes. “Working together,” the letter reads, “we believe that we will be able to effectuate an affordable non-eviction conversion while protecting the long-term affordability of the property for current and future tenants and ensuring that those who wish to remain rent-stabilized renters can do so.”
If successful, this would be the largest co-op conversion in the country’s history, according to the Times.