Despite pressure from top lawmakers and tenant advocacy groups to block the sale, the buyer of Starrett City, now called Spring Creek Towers, is not backing off its intentions to buy the complex. The showdown started last week after Starrett City Associates agreed to sell the 46-building, 140-acre complex to Clipper Equity LLC for $1.3 billion. First opened in 1975, Spring Creek Towers is the largest federally subsidized rental complex in the country, with about 90 percent of the units receiving some kind of subsidy. These subsidies include the Mitchell-Lama program for moderate-income workers, the state Section 236 program and the federal Section 8 program. The remaining 10 percent of the 5,881 housing units is rented out at market rate. Upon announcing the sale, Clipper Equity LLC also announced its intention to withdraw the complex from the state Mitchell-Lama program by paying the balance of a $243.6 million mortgage. The sale and announcement led to a host of elected officials decrying the sale. Among these officials were Senators Charles Schumer and Hillary Clinton, who both called on the federal Department of Housing and Urban Development (HUD) to block the sale. Anyone who pays $221,000 per apartment, pays off the balance of a $243 million mortgage, and willingly accepts an additional $8 million a year in property taxes is going to need to charge top dollar for these units, Schumer said. Experts across the board agree it will be impossible for someone paying this price not to convert the units into high-price rentals or ritzy condominiums. Without question, a sale at this price will change the character of Starrett forever, he added. Additionally, Schumer said that if the new owner opts out of the Mitchell-Lama program, or any other subsidy program, the senator would ask HUD Secretary Alphonso Jackson to provide project-based Section 8 vouchers for 100 percent of those units. This will keep the apartments affordable for the long term. Schumer also floated an idea for a new program that would allow any new owner to convert the 2,442 apartments subsidized by the federal Rental Assistance Program (RAP), which expires in 2016, to project-based Section 8. Not to be outdone, U.S. Rep. Anthony Weiner and Rep. Edolphus Towns went to Starrett City last week to decry the sale and announce that they will lead Secretary Jackson on a tour of the complex this week. Among those also expressing strong concerns about the sale were Mayor Michael Bloomberg, Borough President Marty Markowitz, City Council Speaker Christine Quinn and City Councilmember Charles Barron. Representing and helping to organize tenants, many of whom fear they will be pushed from the complex, is New York ACORN (Association of Community Organizations for Reform Now). The elected officials, tenants and ACORN also note that Clipper Equity LLC already has 4,768 apartments in 71 buildings citywide. In these properties, the citys Department of Housing Preservation and Development reported last week that Clipper Equity has 8,792 outstanding maintenance code violations. But Clipper Equity spokesperson Ilyse Fink said an overwhelming proportion of these violations was inherited when the owner purchased Flatbush Gardens, formerly the Vanderveer Houses in East Flatbush, 18 months ago. When you buy a development with many violations, you also buy the violations at the same time, said Fink. Since our purchase, we have worked diligently on a continuing multimillion dollar program of improvements, she added. Fink also said the firm has recently met with ACORN and various city, state and federal officials and agencies regarding the future of Starrett City. We are committed to maintaining affordable housing at Starrett City and ask only that our plans be judged fairly, fully and on the merits, Fink said. We look forward to sharing our plans with local officials and the residents in the near future. But Bertha Lewis, executive director of NY ACORN, said she came away from the meeting with Clipper Equity with the same mind frame going into the meeting. We continue to believe that there is simply no way that they can afford to pay $1.3 billion for Starrett City and still keep the complex affordable, said Lewis. Lewis said by paying so much for the complex, the developers are virtually guaranteeing that they will raise rents, cut services and build market-rate housing in order to squeeze a profit out of their wildly inflated offer. The bottom line is that Clipper Equity has no intention of keeping Starrett City affordable and we intend to fight to kill this deal, she said.
©2007 Community News Group
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