Deadline Looming for Starrett City Bids
- Sep 25, 2008
Judgment Day is one step closer for the residents of Brooklyn’s Starrett City and its suitors. Sept. 25 marks the deadline to submit bids to acquire the 34-year-old, almost 6,000-unit multi-family property–the nation’s largest federally subsidized housing complex. Sources anticipate that the winning bidder will be announced a few weeks after the bidding deadline. Thursday will represent the latest chapter in Starrett City’s acquisition saga. The Department of Housing and Urban Development shot down a $1.3 billion offer last year from David Bistricer’s Clipper Equity L.L.C. amid uncertainty surrounding whether the development would remain affordable. In recent months, the bid deadline has been extended a handful of times; as previously reported by CPN, the deadline was pushed back from earlier this month to Sept. 25, to arm HUD with enough time to determine the apartment complex’s future rents. Recap Advisors L.L.C. is managing the sale on behalf of the property’s owner, Starrett City Associates. Coming into this week, four teams reportedly still had their hats in the ring: the NHP Foundation and The Related Cos.; the Greater Allen A.M.E Cathedral Housing Corp. and JPMorgan Chase; Westbrook Partners, the Metropolitan Council on Jewish Property and the New York City Labor Council, among others; and The Clarrett Group, the Christian Cultural Center; Housing Partnership Development Corp. and The Cogsville Group. When asked about its involvement in the bidding Westbrook told CPN the following: “Westbrook Partners is proud to be a part of a team including several respected not-for-profit groups led by the New York City Central Labor Council that is bidding for the Spring Creek complex in Brooklyn and is committed to preserving affordability even beyond the minimum 20-year period required of bidders. “Our proposal would also retain the services of the very capable current management company, with financing to be provided by Citigroup.”On Tuesday, however, federal officials, citing what they deemed a lack of fiscal and managerial ability needed to run Starrett City, rejected the NHP/Related and Greater Allen/JP Morgan bids. While the volatile economy can make getting debt financing difficult, Donald Cogsville, CEO of The Cogsville Group, one of the remaining bidders, notes that funding from government-sponsored entities will be crucial–for all bidders. “This is likely to be primarily driven by tax-exempt bonds. There are three [GSEs] that we’ve spoken to: Fannie Mae, Freddie Mac and the FHA. All three are still doing business, and we’re in conversations [with them]. This will be an enormous opportunity to show that they’re still in business.” Cogsville adds that he and his partnering bidders intend to satisfy the needs of the seller, the government and community; 2,300 of the 30,000 members of the Christian Cultural Center live in Starrett City, and the center’s Rev. A.R. Bernard has many ties to the community. Prior to Wall Street’s fiscal woes, industry insiders pegged the deal as fetching nearly or more than $1 billion. Sources on Wednesday, however, suggest the property may go for $600 million to $800 million.