Rebuffed by state and federal regulators over his plan to buy Starrett City for $1.3 billion, David Bistricer is now bargaining with the current owner over a lower sale price and devising a plan that he hopes will pass muster with government officials, local politicians and the 14,000 tenants at the vast Brooklyn housing complex.
If Mr. Bistricer has any chance of success, it now seems critical that he renegotiate his deal with the current owner, Starrett City Associates. Senator Charles E. Schumer and state officials have indicated that a deal is not feasible at $1.3 billion, asserting that such a heady price would force the new owners to increase rents sharply or cut services at the ethnically and economically diverse complex.
Executives who have talked with Mr. Bistricer’s group say that the owner recently said it would consider a new proposal, but it is unclear whether the two sides can come to terms on a lower price for Starrett City, the nation’s largest federally subsidized housing complex.
The new proposal, which has not been finalized, also involves forging a partnership with the Rev. Calvin O. Butts III of Harlem and devising a way to ensure that the 5,881 apartments at Starrett City will remain affordable to poor and working-class families. Mr. Bistricer, who heads Clipper Equity, also wants to develop mostly market-rate housing on vacant land within the 140-acre complex, which sits on Jamaica Bay between East New York and Canarsie.
With many New Yorkers increasingly rattled by the price of housing, politicians including Mr. Schumer, Gov. Eliot Spitzer and Councilman Charles Barron of Brooklyn have come out against the sale.
“As Starrett City goes, so goes the city of New York on the question of affordable housing,” Mr. Barron said yesterday at a City Hall rally of tenants and housing advocates. “Not only do we need to preserve affordable housing, we need to build more of it. Otherwise, New York City will turn into a town for the rich.”
He also excoriated Mr. Butts, who heads Abyssinian Development Corporation, a well-regarded housing developer based in Harlem, for working with Mr. Bistricer.
“We’re saying to the reverend from Harlem,” Mr. Barron told a crowd of about 75 people, “butt out of our business.”
Mr. Butts disputed a suggestion by Mr. Barron that he was involved simply for the money. “We are working on something that will answer a lot of the questions that many people have,” Mr. Butts said. “I think we will maintain affordability not only for the current tenants but for tenants to come.”
If an agreement is reached, Abyssinian will have a substantial role in managing Starrett City and in developing new housing on the site.
For its part, Mr. Bistricer’s group insisted that it was not proposing steep rent increases and was supportive of reasonable state legislation that would regulate rents in complexes like Starrett City that are part of the state’s middle-class Mitchell-Lama housing program.
“Clipper’s deal to buy Starrett City will get done,” said Lisa Linden, a spokeswoman for Mr. Bistricer. “We are in discussion with many individuals, including Reverend Butts. Our plan is evolving, as well. Its centerpiece remains affordability.”
The secretary for housing and urban development, Alphonso R. Jackson, rejected Mr. Bistricer’s first proposal in March, saying it failed to show how the complex would remain a “viable community for New Yorkers of modest means.”
In April, state officials rejected Mr. Bistricer’s second proposal, saying it was unworkable under state housing laws.
Two weeks ago, Senator Schumer said that a deal at $1.3 billion was not feasible because it would require millions of dollars in additional federal subsidies, which would allow the seller to reap a windfall from the sale. He said Starrett was a successful complex because of huge federal, state and city subsidies since the day it opened in 1974. He suggested that Starrett City Associates hold a new auction or renegotiate the sale price, which he said, should be closer to $900 million or $1 billion.
The senator’s remarks seemed to signal that Mr. Bistricer’s deal was dead unless he was able to reopen negotiations over the sale price. Real estate executives who have been briefed by the Bistricer group say that Clipper has talked to the owners and put together a plan that would allow most of the tenants to remain.
Mr. Bistricer has also sought to enhance his credibility and political clout by reaching out to Abyssinian Development and Mr. Butts, who knows both Mr. Schumer and Mr. Jackson in Washington.
But critics remain unconvinced.
“The private developers interested in buying Starrett City do not have the best interests of this community in mind,” said Bertha Lewis, executive director of New York Acorn, a community-building group.
