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PR- 203-08
June 2, 2008


Agreement Signed by Owners, City, State and Feds Ensures that Starrett City Buyer Must Keep Rents Affordable and Protects Thousands of Tenants from Being Displaced

Mayor Michael R. Bloomberg, Senator Charles E. Schumer, Governor David A. Paterson, and Department of Housing and Urban Development (HUD) Deputy Secretary Roy A. Bernardi today announced that the bidding process to sell Starrett City will move forward with a signed agreement in place to preserve affordable housing and keep rents down. A Memorandum of Understanding, signed by the current owners of Starrett, the New York City and State housing commissioners and HUD, lays out guidelines governing the sale of the massive properties and strict restrictions on any rent increases. Starrett City is the largest federal subsidized housing complex in the country, comprised of 5,881 affordable housing units.

"With all the dysfunction that has grown in Washington over the years, it's important to give credit where credit is due. In the case of saving Starrett City, there's enough credit to go around," said Mayor Bloomberg. "Preserving existing affordable housing is a key component of our 165,000-unit New Housing Marketplace Plan - the largest municipal affordable housing plan in the nation's history. Working together, HUD, Governor Paterson, Senator Chuck Schumer, Housing Preservation and Development Commissioner Shaun Donovan, ACORN, and countless other City, State, and Federal stakeholders have crafted a solution that's going to work well for tenants, owners, and the City of New York."

"This is the long sought victory we have all hoped and prayed for," said Senator Schumer. "This agreement charts a clear course to ensure whoever buys Starrett City must keep it affordable for its current and future tenants. There is no question that we couldn't have gotten this done without the owners, the tenants, federal, state, and local government all working together toward a common goal - preserving Starrett City as the haven for affordable housing that it has always been and always should be. We will watch the bid process like a hawk to make sure everyone lives up to this agreement."

"Creating and preserving affordable housing is one of my Administration's highest priorities. We can't build communities and grow our economy unless we have safe, affordable roofs over our heads," said Governor David A. Paterson. "This Memorandum of Understanding is the result of hard work on behalf of the city, state and federal governments, as well as the owners and tenants of Starrett City. I am proud to show our support for keeping Starrett City affordable-now and into the future."

"This agreement provides the framework to ensure that Starrett City remains a much needed affordable housing resource for the City of New York on a long-term basis," said HUD Deputy Secretary Bernardi. "We want residents to know that Starrett City isn't going away.  Affordable housing isn't going to be eliminated here. Rather, it will continue to thrive.  Families with lower or middle incomes, elderly residents, and residents confronting a disability will not be priced out or told to move on."

With Starrett City Associates (SCA) set to put the property out to bid this week, the Memorandum of Understanding as well as a letter from SCA to Senator Schumer lay out a specific framework to ensure, no matter whom the final owner is, Starrett City will remain affordable. The text of the MOU will be included in any bid package made available to prospective purchasers of Starrett City so that these organizations, their advisors, and their potential financing sources will know exactly what the affordable housing requirements are from the outset.

"The Starrett City Memorandum of Understanding provides a fair and transparent process for a sale that will preserve Starrett City as affordable housing for an additional twenty years or more," said New York City Housing Preservation and Development Commissioner Shaun Donovan. "It is welcome news for thousands of Starrett City tenants and for the preservation of affordable housing in New York City. Last year's attempted sale of Starrett City saw a flawed process, and it led to an unrealistic bid that threatened to put 5,881 apartments at the largest HUD-subsidized property in the nation at risk.  Federal, state and city governments worked together to prevent that misguided sale and now we are continuing our unprecedented cooperation to secure an affordable future for Starrett City. We look forward to working with Starrett City Associates and potential buyers to protect the diverse community that is Starrett City."

"Governor Paterson and New York State's Housing Finance Agency are committed to preserving Starrett City as affordable housing for its current and future tenants," said New York State Housing Finance Agency President Priscilla Almodovar. "I am pleased that Starrett's owners are similarly committed. The Memorandum of Understanding, which we expect will be the basis of any sale, was the result of extraordinary collaboration among all levels of government and the owners. We've agreed on a framework that recognizes everyone's interest -- the tenants, government and the owners. We now stand ready to work with the owners and our partners in government to ensure that the sale of Starrett will have minimal impact on the lives of the working men and women who live here."

"It doesn't get much better than this. For nearly two years the more than ten thousand tenants of Starrett City, the Starrett Tenants Association and ACORN have fought together to preserve this community for working class New Yorkers of every stripe for generations to come. Today we are here to say: 'We did it,'" said Bertha Lewis, Executive Director of NY ACORN. "The MOU we are announcing today is a model of how government and the private sector can and should work together to keep New York affordable for working families.  Today, for the first time in a long time, Starrett tenants will have the peace of mind that of knowing that their homes and their community will remain affordable for them and their children and generations to come."

Current tenants would be grandfathered into their apartments, eliminating the need for disruptive and costly moves for tenants. Starrett City would remain in the Mitchell Lama program as affordable housing for at least the next twenty years. The MOU allows an owner to commit to participating in Mitchell-Lama for a longer period time but no shorter than twenty years.

The MOU is signed by Disque D. Deane, Managing General Partner of Starrett City Associates (SCA), Harvey Rudman, President of Starrett City Inc, and representatives of the federal Department of Housing and Urban Development, the New York State Housing and Finance Agency, Division of Housing and Community Renewal, and the New York City Department of Housing Preservation and Development. Bidders will have 30 days to complete an offer for the property. SCA will select a group of financially viable finalists that will then be vetted through the local, state and federal government to ensure their commitment to preserving the property as affordable.

As part of the agreement, Schumer has authored and is pushing legislation that converts the existing Section 8 and Rental Assistance Program (RAP) contracts at Starrett to 20-year project-based Section 8 contracts. This change will cover 60 percent of the units at Starrett City and ensure that these units can remain affordable for 20 years, the standard length of a Section 8 contract.


Stu Loeser / Andrew Brent   (212) 788-2958

Josh Vlasto (Schumer)   (202) 380-5990

Errol Cockfield (Governor)   (212) 681-4640

Neill Coleman   (Housing Preservation & Development)
(212) 863-8076

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