NEW YORK—Sen. Charles Schumer joined Councilman Daniel Garodnick, Council Speaker Christine Quinn, and a crowd of Stuyvesant Town and Peter Cooper Village tenants in a rally to appeal to Fannie Mae and Freddie Mac, the largest creditors of Stuyvesant Town and Peter Cooper Village. The owners had defaulted on their 3 billion-dollar mortgage last weekend and turned the housing complex over to their creditors.
“At the end of the day we have to put the needs of thousands of middle-class residents and the need for New York City to maintain middle-class housing first,” Schumer said. “They were caught up in a high stakes real estate gamble that ended up going bust.”
Sen. Schumer says that there is a silver lining in the fact that they turned Stuyvesant Town over to the creditors. Fannie Mae and Freddie Mac are both agencies that are majority-owned by the federal government, and this gives them more leverage over the agencies than a privately owned group, such as MetLife—whom Schumer had also spoken to.
“They gave us the back of their hand, and it was disgraceful,” he said.
Councilman Garodnick added that Fannie and Freddie have received a hundred billion taxpayers dollars to help with their restructuring, but now they are saying they have nothing to do with the restructuring of Peter Cooper Village and Stuyvesant Town.
“Preserving affordability is Fannie and Freddie’s core mission—there are 25,000 tenants who are watching to make sure they don’t cut and run on us now,” Garodnick said. “These two government-owned corporations, along with their agent CW Capital, are in the unique position of being able to steer the long-term future of this community, to keep these apartments affordable and to bring in responsible management, and we will hold them to that.”
“We have leverage, and we will use it,” Schumer said. “Fannie and Freddie must guide this process to a conclusion with the least amount of impact on current tenants and families. I am going to watch them like a hawk to make sure they do just that. The attitude of Fannie and Freddie must go out the window; they can’t just all of a sudden change their stripes.”
Sen. Schumer raised three points directed toward Fannie and Freddie that the tenants would not compromise on.
“We’re asking Fannie and Freddie to do three things. First, to make sure maintenance is kept up; there will be no cutting corners. Second, tell CW Capital to install a new manager as quickly as possible—one that puts tenants first; and third, when they sell the buildings again, not to make the same mistake,” he said.
Councilman Garodnick, a resident of Stuyvesant Town, stressed that the housing complexes will need to be either owned by the tenants or someone in partnership with the tenants.
“This is not just a property that can be flipped to the highest bidder,” Garodnick said. “These tenants are organized. We are the source of money that everyone is scrambling to secure and we should have a say in ownership.”
Council Speaker Quinn wanted to send the message that the council would not allow anything to jeopardize Stuyvesant Town as a home for middle-class New Yorkers.
“Four years ago, when Stuyvesant Town and Peter Cooper Village’s future was on the line, in the same situation, we knew we were right [in bidding]—we just didn’t know how right,” she said. “[Fannie and Freddie have] an obligation to make sure the bad part of the deal you make goes right. Stop backing deals that are based on breaking the laws, underscored by harassing tenants, and pushing tenants out.”
Schumer has made similar, successful efforts of federal intervention in Starret City in 2007 and Ocelot in the Bronx, and says this should be looked at optimistically.