Stuyvesant Overcharged Rents
October 22, 2009 in Commercial Real Estate
Quick follow-up to CalPERS losing another $500 Million, about the failing Stuyvesant Town apartment complex in Manhattan.
Not only has the development failed, but they have been overcharging rent in breach of city contracts along the way.
The New York Times reports Court Deals Blow to Owners of Huge Apartment Complex
The state’s highest court dealt a financial blow on Thursday morning to the already beleaguered owners of the sprawling Stuyvesant Town and Peter Cooper Village complexes in Manhattan when it ruled that they improperly began charging market rents on thousands of apartments.
The ruling by the Court of Appeals may mean that the current owner, a partnership of Tishman Speyer Properties and BlackRock Realty, and the former owner, Metropolitan Life, may have to pay an estimated $200 million in rent overcharges and damages to tenants of about 4,000 apartments.
In a majority ruling (two of the six judges dissented), the court said the owners improperly raised rents beyond certain set levels at the complexes while receiving tax breaks from the city for major renovations.
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