2007-04-26 / Other News

Officials Continue Efforts To Keep Starrett City Affordable

By Neil S. Friedman

Elected officials last week continued their efforts to block the sale of Starrett City and assure that the nation's largest federally subsidized housing complex remains affordable for more than 10,000 tenants.

News 12, Brooklyn's cable news outlet, reported on April 13 that lawmakers planned to introduce legislation that would prevent potential buyer Clipper Equities from opting out of the Mitchell-Lama program, if they eventually win the bid.

Additionally, senior New York senator Charles Schumer asked the federal Department of Housing and Urban Development to reject the real estate developer's revised bid, which they submitted when their initial offer was rejected in March and subsequently turned down by state housing officials two weeks ago.

Mayor Michael Bloomberg last week signed two bills that would provide incentives to allow Mitchell-Lama developments to be eligible for tax benefits when owners renovate or make major repairs at multiple housing projects citywide.

Bloomberg said the new legislation "extends the tax exemption to owners who receive low interest government" loans. To be eligible, Mitchell-Lama property owners must remain in the program an additional fifteen years after the initial 25-year period has expired.

The second bill, he said, "makes an important correction by allowing thousands of Mitchell-Lama cooperative units to take advantage of" certain benefits even if their market value is assessed above $40,000. Previously, the ban, Bloomberg said, "was inappropriate since the assessed value of the Mitchell-Lama unit did not reflect the value of the apartment" due to rising property values in some neighborhoods where such co-ops are located.

"Both (bills) will," the mayor said, "help maintain New York City's affordable housing stock by spurring much needed rehabilitation at lower interest rates that private sector financing, while keeping more developments from leaving the Mitchell-Lama program"

Clipper Equities won the bidding rights for 46-tower Starrett City, which has been formally known as Spring Creek Towers for several years, in January, but the offer was subsequently rejected by federal and state officials due to concerns that it would have to raise rents to offset the $1.3 million sale price it offered, thus making the cost unaffordable to about 90 percent of the current residents living at the 140-acre development.

As the bidding was being examined, city officials pointed out that Clipper Equities owns scores of Brooklyn buildings that have compiled over 8,700 building code violations, including some cited as "dangerous."

The real estate developer has defended itself that it inherited the problems when they purchased those properties and has corrected some or is in the process of fixing the remaining ones.

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