Senator Schumer And Attorney General Cuomo Announce The Blocking Of Starrett City Deal

NEW YORK, NY (March 2, 2007) -U.S. Senator Charles E. Schumer and Attorney General Andrew M. Cuomo today announced that the U.S. Department of Housing and Urban Development (HUD) will stop the sale of the Starrett City complex.

“This was an ill-conceived deal from the start,” said Cuomo. “The principal purchaser had been banned for life from doing co-op transactions in New York State, and HUD was wise to prevent him from acquiring these homes. The threat that this sale posed to so many New Yorkers was reflected in the overwhelming public outcry against this deal, and I am glad my office was able to do its part in protecting the tenants of Starrett City.”

“It is high time that HUD put the final nail in the coffin for this deal that would have cheated New York out of critically important housing for middle-income and working-class families,” Schumer said. “From day one I vowed that any sale of Starrett City will not go forward without an ironclad commitment from any buyer that it stays affordable. I will continue to fight tooth and nail to ensure that the tenants are protected.”

At a press conference this morning, HUD Secretary Alphonso Jackson noted that the rejection of the deal was based on the contributions of Senator Schumer, Congressman Edolphus Towns, and Attorney General Cuomo. In particular, Secretary Jackson stated: “The information provided by the Attorney General really helped tremendously.”

Last month, Cuomo provided HUD Secretary Alphonso Jackson with a letter and supporting court records to provide HUD with a basis for rejecting the deal altogether. Included in those materials was an injunction, obtained by the Office of the State Attorney General, banning principal purchaser David Bistricer from certain real estate deals. Cuomo has previously vowed to enforce that injunction regardless of HUD’s actions. As recently as yesterday, Cuomo’s deputies met with HUD’s lawyers to provide further information relevant to stopping the Starrett City sale.

Schumer, the Democratic Chairman of the Senate Housing Subcommittee, has criticized the bidding process that led to the current arrangement with Bistricer, since certain bidders were forbidden to talk to the federal government about the deal. He has also vowed to help block the Starrett City deal unless the purchaser signs an ironclad agreement that ensures Starrett stays affordable. Schumer has also pointed out that federal funds sustained the project and built up the owners’ equity, in effect making the federal government a full partner in the project that ought to have a say in any sale. Schumer has a long history of working to ensure the sustained affordability of Starrett City. As a congressman representing the development in the 1980s, he sponsored legislation bringing over 1000 project-based section 8 vouchers to the development.

Under federal law, HUD has the authority to consider a purchaser’s background before consenting to real estate deals such as the proposed sale of Starrett City. Since 1998, Bistricer has been under permanent injunction from the offer and sale of cooperative buildings and apartments. The order, signed by New York Supreme Court Justice Diane Lebedeff, stemmed from a finding of a pattern of abuse and deception by Bistricer in prior cooperative apartment conversions and sales.

Senator Schumer and Attorney General Cuomo thanked Secretary Jackson for his thorough and expeditious review and for his partnership in fighting for hard-working New Yorkers.