Massive Starrett City Sale Moves Ahead in Fishbowl

The controversial sale of the nation’s biggest federally subsidized housing complex is moving forward under an unusual number of watchful eyes. This week, approximately eight entities submitted bids for Spring Creek Towers, a nearly 6,000-unit complex on Jamaica Bay in Brooklyn, N.Y., that is almost universally known by its original name, Starrett City. The scale of the property (pictured), which has 46 residential towers, a 124,000-square-foot retail center, schools and even its own power plant, will probably make Starrett City the subject of one of the nation’s biggest multi-family sales of the year. Despite the size of the project, however, it is the rare variety of stakeholders that will make the sale process especially challenging, said a spokesperson for Recap Advisors L.L.C., which is managing the sale for Starrett City Associates, the complex’s owner. “Every step at every point is watched by a huge number of competing interests,” he noted. Indeed, demands from elected officials and community leaders to keep the affordable element scuttled a $1.3 billion bid for the property last year by Clipper Equity L.L.C. Alphonso Jackson, then the U.S. secretary of housing and urban development, personally vetoed the sale because he was not convinced that Clipper Equity could maintain the affordable element. Bringing the property to market required a memorandum of understanding approved by Starrett City Associates and federal, state and local housing authorities. Probably most important to the government agencies and Starrett City residents, the deal will retain the affordable element for a minimum of 20 years. That provision means that the successful candidates must have extensive experience managing affordable housing. Recap Advisors would not confirm bid amounts, but a report published Wednesday by the New York Times indicated that the initial round of bids ranged between $700 million and $900 million.Click here for Blog Comments