Sandy is still causing headaches. Bureaucratic ones.

After Hurricane Sandy, rent-stabilized tenants living in damaged buildings with diminished services were told—and believed—that they would be able to get rent reductions for the entire time they were without services.

The Rent Stabilization Code stipulates that reductions are given from the time the service is lost. But, as rent-stabilized residents at Peter Cooper Village and Stuyvesant Town have discovered, they might only be eligible for reductions starting in March—a four-month discrepancy that could be worth thousands of dollars per tenant.

According to a recent fact sheet from the state's Division of Housing and Community Renewal, rent reductions will only be awarded from the month that the department notifies landlords of diminished services, rather than from the time when the services were lost. For the 1,200 tenants of Stuy Town and Peter Cooper Village who filed with their claims with the Department on Feb. 26, the difference is significant. Rather than receiving rent reductions starting in late October, when flooding damaged the building's security systems, laundry rooms, elevators, building intercoms, bike and carriage room storage and trunk storage, reductions would only start applying in March, or even April.

Now, politicians are trying to untangle the mess.

"Unlike the Rent Stabilization Code this seems to be an administrative policy that doesn't have a basis in law," State Assemblymember Brian Kavanagh told The Observer. "We're talking about a fact sheer versus a formally adopted code."

Earlier this week Mr. Kavanagh, State Senator Brad Hoylman, Councilmember Dan Garodnick, U.S. Representative Carolyn Maloney and borough president Scott Stringer sent a letter to the Division of Housing asking for clarification on the discrepancy and an explanation on its basis. They have yet to receive a response and the Division has not yet returned a request for comment from The Observer.

Mr. Kavanagh said that tenants could be denied a significant amount of compensation to which they are entitled if the Division's standard is applied rather than the Rent Stabilization Code's. Moreover, the Divison is not even applying reductions from the date they were filed, but from the beginning of the month that notifications are served on the landlords. Meaning that in some cases, rent reductions could be delayed a number of additional weeks, or even months.

Tenants may also have reason to be concerned as it's not the first time that the Division of Housing has shifted its policies and interpretations to be more landlord friendly. Incidentally, the last case also involved rent-stabilized tenants in Stuy-Town and Peter Cooper Village.

The tenants lived in apartments that had been removed from rent stabilization even though the landlords were receiving J-51 benefits. In 2000, the Division of Housing—which had earlier issued an opinion letter stating that J-51 units were exempt from deregulation—adopted a regulation that the exemption didn't apply to buildings like Stuy Town, which would have been rent stabilized even if the landlords did not receive J-51 benefits. The regulation was eventually struck down in court as illegal.

As for the market-rate tenants living in the complex? Neither the Rent Stabilization Code nor the Division's rules and regulations apply to them. But there's a class action lawsuit that they could join.

kvelsey@observer.com

Tenants will receive $68 M. in damages.

The tenants of Stuyvesant Town and Peter Cooper Village have finally settled their class action suit, winning $68.7 million in damages that will be awarded to tenants who were overcharged on their rent between January 2003 and December 2011 as a result of illegal rent deregulation.

The settlement means an end to the lengthy Roberts v. Tishman Speyer legal battle. Tishman Speyer defaulted on its loans in 2010 and the property is now owned by CW Capital Asset Management LLC. The damages, to be paid by CWCapital (on behalf of the
bondholders' trust) and former owner MetLife Inc, will be divided among 21,250 tenants in 4,300 units.

The settlement, pending final court approval that could come as early as April 2013, will mean that damages of some $10,000 will be awarded to each of the 4,300 units deemed to have been affected by overcharging. It also means that tenants' plans to buy the complex themselves in a bid to protect the buildings as a increasingly rare refuge for Manhattan's middle class might finally move forward.

Tenants sought $215 million in compensation for the rent overcharges, which is far more than the current award, but the plaintiff's attorneys say that the final agreement will bring the total recovery in the lawsuit to at least $146.8 million. In addition to compensating tenants for past rent overcharges, the agreement also includes savings in the form of future rents, which will be based on a formula that factors in market conditions and tenant turnover rates.

"We believe this settlement provides an extraordinary recovery for our clients and we couldn't be happier for them," said Ronald Aranoff of Bernstein Liebhard, one of the plaintiff's lead attorneys, in a statement.

The agreement also guarantees rent stabilization through 2020, when the complex's J-51 tax benefits expire, reinstating the benefit to a number of residents whose units had been erroneously deregulated. Tenants who signed market rate leases will be offered modified rents or their original rent grown by the yearly rent guidelines board increases.

The settlement comes after some 18 months of negotiations. The complex has been mired in drama ever since Tishman Speyer bought the complex for $5.4 billion in 2007 with plans to draw an upscale clientele in the market for luxury apartments.

CW Capital Partners took care to point out that they took over the complex almost four years after the suit was first filed.

“Since then we have worked hard to try to balance the interests of residents and bondholders, recognizing that our fiduciary responsibility to investors must respect the concerns of tenants who call Peter Cooper Village Stuyvesant Town home," wrote CW managing director Andrew MacArthur in a release.

The settlement deals with less than half of the complex's 11,229 units spread out across 56 buildings.

Rather than heralding the announcement, lifelong resident and council member Dan Garodnick issued a cautious statement.

A popular amenity. (Marianne O'Leary/Flickr)

Hurricane Sandy turned Stuyvesant Town and Peter Cooper Village into hell in Manhattan for almost a week after the power went out. Sure, much of downtown was a disaster zone, to say nothing of the devastation in the outer boroughs, but Stuy Town had some particular, peculiar problems. Most notably, all the hallways are interior, with no windows, so it was impossible to get around. What's worse, the locks on all the doors are electronic, so anyone could have been lurking in the darkness.

Fortunately, Stuyvesant Town and Peter Cooper Village have returned to a sense of normalcy now that the power is back, as the management has been detailing in a serious of lengthy email updates to residents. Unfortunately, one of the things tenants might have hoped Superstorm Sandy would have washed away is still coming: the ice rink.

Rinks have become all the rage in recent years, not only in Central Park and Rockefeller Center, but everywhere from the Standard Hotel and W Downtown to McCarren Pool in Williamsburg. Stuy Town was no exception, and last year the management installed a rink, too. They saw it as an amenity for tenants, but naturally those persnickety residents, many of whom have been in full-on revolt ever since the complex was sold to Tishman Speyer, hated it.

There were the crowds, the noise and fumes from the generators and the loudspeakers blaring music at all hours. It was anything but a winter wonderland.

Well, now, just as the lights and locks are back, so, too, is the ice rink, as a note near the bottom of the latest resident update explains.

PCVST Ice Rink: PCVST's seasonal ice rink, operated by Ice Rink Events, will open this Saturday, November 17th at 11am. Residents are invited to enjoy free admission all day this Saturday. For operating hours, lessons, and other details, please visit pcvst.com. For additional information, please contact icerink@pcvst.com.  The completion of the ice rink was accomplished using separate outside contractors and did not impact any of our on-going restoration efforts.

So please, don't complain that those outside contractors could have been put to better use putting the complex back together. The rink is an important part of the complex, and it is here to stay, so it needs just as much resources as the boilers and the grounds.

Update:As a number of commenters have pointed out, the utilities are indeed spotty for some residence, meaning those outside contractors might well have been put to better use than building an ice skating rink. That is one frigid move, Stuy Town.

On Monday, The Real Deal reported that the long-fabled co-op conversion is on its way, based on a press release by Fitch Ratings.

But wait! The publication later clarified that this doesn't mean the long-awaited conversion has commenced. In fact, it's just more of the same, with rents on nearly 600 vacant units going way up, jumping from an average of $900 a month to $3,000. This brings them almost exactly in line with market-rate rents for similar apartments.

"Basically, they'll be brought up close to what market rate is," Robert Scaglion, a senior managing director with Rose Associates, told The Real Deal. "On a percentage basis there's no rule of thumb. If you could renovate it and get it up to $4,000—well, I don't think the market is going to pay [that] for a one-bedroom in Stuy Town."

So how did the apparent conversion get called off? Because there wasn't any. Fitch had initially referred to a "conversion" when what the company meant was "a rehabilitation" of the 560 apartments. It's all so confusing. Where's Charles Bagli when we need him?

lkusisto@observer.com

Ever since Tishman Speyer bought the complex four years ago for the phenomenal price of $5.4 billion, there has been one fight after another: from the deregulation of apartments to the over-planting of the lawns, from the foreclosure of the complex to fight for control of that foreclosure.

When a group of Stuy Town tenants won a court case in March 2009 that found that many units had been illegally deregulated, it was a huge victory. It not only ended Tishman Speyer's already tenuous hold on the complex but also provided rent relief to thousands of residents, both decades-old and recent arrivals.

But calm never lasts in the complex, and the Stuy Town rent agreement expired yesterday with no clear resolution. As Crain's points out, the rent issue must be dealt with before a proposed co-op conversion can proceed.

As for the rents themselves, the intricacies are head-spinning. Fortunately, The Times' Charles Bagli, who is writing a book about the Stuy Town debacle, is here to explain. "The issue is very complicated for a complex as large as Stuyvesant and Peter Cooper Village, where every single apartment has a unique rent history," Bagli writes. He then goes on to provide a 202-word explanation that, while elegant and thorough, may still require an economics degree to understand.

Stuy Town was bought in 2006, but check out the biggest real estate deals of 2010. >>

mchaban [at] observer.com | @mc_nyo

BusinessWeek is now reporting that Ackman broke even on the deal, getting back his $45 million in exchange for backing out. A serial winner, Wily Bill was still not entirely satisfied with his results:

Ackman said in an interview yesterday that his venture was "outgunned" by CW's legal team in court. He said he believed his interpretation of the loan documents was correct and that his venture was legally entitled to conduct a mezzanine foreclosure.

"We came to a resolution that was very smart for CW and contributes to the long-term stability of the property," Ackman said.

Ackman also said that he still remained interested in the property and might even put together a bid with Winthrop. "We understand the asset, we know all the people, we spent a lot of time with the tenants' association," he told BW. "We may choose to put a plan in going forward."

mchaban [at] observer.com | @mc_nyo