THE four bidders vying for Starrett City, the giant housing complex on Jamaica Bay in Brooklyn, now have until Sept. 25 to put in second-round bids – which the sellers hope could reach nearly $1 billion.
At least one bidder confided that Sen. Chuck Schumer might feel that pushing back the deadline – after he secured special legislative subsidies – will be tantamount to “a money grab.”
Brokers, however, say the decision to stretch out the bidding process was made to allow the officials at the US Department of Housing and Urban Development to “mark up to market” the rents of 60 percent of the project’s 5,881 units, which are governed by Section-8 agreements.
The low- and moderate-income tenants in these apartments pay 30 percent of their incomes as rent while taxpayers subsidize the remainder to reach the market rates.
Section-8 rents are increased annually and the decision to delay the bid deadline was made to provide more incentives for the bidders to raise their offers and provide the financiers more certainty of the cash flows.
“I would anticipate the decision [on a winning bid group] will be made in early October,” said Todd Trehubenko of Boston-based Recap Advisors, which is marketing the 46-building Brooklyn project. “It’s a transaction we want to complete this year.”
Bidders include non-profits teamed with developers and financial backers.
The Related Cos. has teamed up with the NHP Foundation, while the Rev. Floyd Flake‘s Greater Allen A.M.E. Cathedral of New York’s The Greater Allen Development Corp. is bidding with JPMorgan Chase.
Another group consists of the Metropolitan Council on Jewish Poverty with Westbrook Partners, the Central Labor Council and Citigroup.
This partnership has also been talking with Touro College about opening a pharmacy school on the property.
The fourth group includes Donald Cogsville‘s Cogsville Group with The Claret Group and the Rev. A.R. Bernard of the 29,000-member Christian Cultural Center, which is located in Starrett City and therefore might have an edge in the process.
“Everybody has supporters,” said William Rapfogel of the Met Council, who is interested in helping seniors in large units relocate to more appropriate neighborhood housing.
Flake, who was to meet with community members last night, told us, “This gives us more time to do a little vetting and analyzing what the community needs and the role we will play.”
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A three-building apartment package on the Upper East Side has been sold in an off-market transaction for $277.5 million.
The pricing equates to $1,927,083 per unit and $1,108 per square foot.
The buildings include 814-816 Madison Ave., a 43-apartme-nt, 11-story structure on the southeast corner of E. 68th St., which was valued at $191.8 million. City records show it was immediately mortgaged for $130 million to Column Financial, which flipped the mortgage to Fortress Investments.
The very large units range in size from 2,000 to 7,000 feet. There is also one professional apartment and a 10,000-foot swath of valuable Madison Avenue retail space with Italian designer, Malo.
Timour Shafran, Lazer Sternhell and Peter Vanderpool of Capin & Associates represented both the buyer, ABRO Management of Woodmere, LI, and the seller, the Jaglom family.
The other properties are at 103-109 E. 86th St., a 13-story building that sold for $49 million, and 115-119 E. 82nd St., a nine-story building sold for $36 million.
These two buildings have a total of 86 apartments and four professional suites.
