New York City politicians, community groups and residents were up in arms for the last 18 months over the possibility that affordable housing complex Starrett City in Brooklyn would follow Manhattan affordable housing complex Stuyvesant Town/Peter Cooper Village and sell in a megadeal to a buyer disinterested in keeping the rents down. However, the financial crisis' impact on the sale process is making that reality seem like a pipe dream as some bidders have reportedly lost financing, and with the deadline of the auction for the development, which spans 140 acres, on Thursday, many expect bids to come in south of the $1 billion mark, according to Crain's Business.
One bidder -- the National Housing Partnership Foundation -- expected Goldman Sachs Group Inc. and Lehman Brothers
Inc. to underwrite its proposal, and Fannie Mae and Freddie Mac to finance
it and provide credit enhancement insurance, according to Crain's. Now those plans are questionable at best, and more stringent lending standards means bidders might be able to borrow only 70% or 75%
of the amounts they had hoped for. Crain's says real estate insiders believe bids won't exceed $700 million.
Even bids in the $700 million range -- still a hefty amount -- would make the original developers of the 35-year-old complex crack a big smile.
For those of you not familiar with Starrett City, now known as Spring Creek Towers, or even have a penchant for nostalgia, check out the commercial about the complex from 1979. - Gerald Magpily
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