After almost 18 months of negotiations, tenants of Stuyvesant Town and Peter Cooper Village have reached a $69 million settlement in their rent overcharge action against the current and past owners of the apartment complexes, bringing their total recovery including previous agreements up to $147 million. The settlement received preliminary approval from Manhattan Supreme Court Justice Richard Lowe III (See Profile) on Nov. 29, according to a press release from Wolf Haldenstein Adler Freeman & Herz and Bernstein Liebhard, the firms representing the plaintiffs. A hearing on final approval is set for April 13.
Metropolitan Tower Life Insurance Co., which owned the complex until 2006, will contribute $10.5 million, and its current owners, a pair of holding companies controlled by Tishman Speyer Properties LP, will contribute $58.25 million. The rest of the recovery comes from a 2009 interim agreement with Tishman Speyer. The tenants will likely save $10 million to $20 million in future rent as a result of settlement as well, according to the press release.
The suit, Roberts v. Tishman Speyer Properties LP, 100956/07, alleged that the owners of the complex deregulated some rent-stabilized units between 2003 and 2006 while continuing to receive a tax abatement under the New York City’s J-51 program. In 2009, the case reached the Court of Appeals, which ruled that landlords may not simply deregulate units in a J-51 building and then claim a proportionately lower tax credit, which had been common practice since the early 1990s (Roberts v. Tishman Speyer Properties LP, 13 NY3d 270).
The Court of Appeals left the question of whether the rule should be applied retroactively to Justice Lowe, who ruled that it should. The Appellate Division, First Department, affirmed that decision last year (NYLJ, Nov. 8, 2011).
Stuyvesant Town and Peter Cooper Village contain about 11,000 apartments. They have been managed by CWCapital Asset Management LLC since 2010, when Tishman Speyer defaulted on its mortgage, on behalf of bondholders.