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It’s down to two bidders for the purchase of the nation’s largest subsidized housing complex.
Last week, Starrett City Associates (SCA) said they won’t consider selling their 46-tower, 140-acre Starrett City complex to two of the four bidders seeking to buy it.
“Four [entities] submitted bids and two were rejected by us,” said Starrett City Associates spokesperson Marty McLaughlin.
McLaughlin refused to give numbers on what the bids were or to set a date when a bid would be accepted.
The announcement comes about a week after the federal department of Housing and Urban Development (HUD) earlier rejected the same two bids.
The two groups that HUD rejected were the NHP Foundation, which partnered with The Related Companies, and the Greater Allen Development Corporation, which had J.P. Morgan Chase & Co. as its partner.
The two bids that are still in the running to purchase the complex include a consortium of Citigroup Inc., Westbrook Partners, the Central Labor Council, the Metropolitan Council on Jewish Poverty and Provident Resources Group.
The second HUD-approved bidder is a consortium of the Cogsville Group, which has joined with The Christian Cultural Center, The Housing Partnership Development Corp. and The Clarett Group.
A HUD spokesman told reporters that there is not a formal appeals process and that the rejections are a “preliminary assessment.”
Ultimately the sellers will decide whether they want to consider bids from the rejected groups or not, the spokesperson said.
First opened in 1975, Starrett City – a.k.a. Spring Creek Towers — has about 90 percent of the units receiving some kind of subsidy.
These subsidies include the Mitchell-Lama program for moderate-income workers, the state Section 236 program, and the federal Retired Assistance Program (RAP) and Section 8 program.
The remaining 10 percent of the 5,881 housing units is rented out at market rate.
However, after Starrett City Associates became eligible to opt out of the Mitchell-Lama program, another firm, Clipper Equity LLC, bid $1.3 billion for the complex, spreading fears among residents and housing advocates that the complex would go market rate.
This led to elected officials getting involved and ultimately HUD rejecting Clipper Equity, L.P.’s offer.
It also spawned government interjection, and ultimately federal legislation, under which the existing Section 8 and Rental Assistance Program (RAP) contracts at Starrett will be converted to a 20-year project-based Section 8 contract.
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.
The current Section 8 and RAP contracts are set to expire in 2016. Under the new legislation, Section 8 and the converted RAP vouchers have been locked in until 2028, according to Sen. Chuck Schumer.
The new bidders have pledged to keep the complex affordable and hope to build hundreds of additional affordable housing units on vacant Starrett property.
©2008 Community Newspaper Group
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