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Robert Trigaux

Manhattan housing project that sank Florida's $250 million pension investment now in flux



Stuyvesanttownpetercoopervillagegettyimage The fate of the humongous Manhattan housing project that Florida's state pension fund invested in -- and has since written off all $250 million of its stake and $16 million in fees -- is once again in flux.

Billionaire investor Wilbur Ross said he and partners including developer Richard LeFrak may consider buying the Stuyvesant Town-Peter Cooper Village apartment development (see photo by Getty Images) in New York City after its owners cede control to lenders, according to Bloomberg News. Here's the complete story.

According to Bloomberg, the future ownership of the 80-acre property, Manhattan’s biggest apartment complex, was put in question Monday after owners Tishman Speyer Properties LP and BlackRock Inc.said they will turn over the buildings to lenders following a missed debt payment. Tishman and BlackRock bought the development in 2006 from insurer MetLife Inc. for $5.4 billion with plans to remodel and raise the prices of rent-regulated units to market rates. Those plans were challenged by a recession, slackening demand for rentals and a legal victory for tenants who claimed some rent increases were illegal.

How Florida's pension fund, administered by the State Board of Administration, decided to invest a quarter billion dollars in the Tishman-Blackrock deal in New York is well chronicled by St. Petersburg Times reporter Sydney Freedberg's investigative piece last fall. Here is that story.

The bottom line? The $250 million investment of pension funds, plus $16 million in fees on the deal, are most likely gone forever.Now the vulture investors are moving in to take over on the cheap. Egads, it was a wretched investment even for a high-risk hedge fund -- but sheer folly and stupidity for an investment of pension fund money. Florida's pension investment managers were either fed a load of bull on this Manhattan deal, or buried beneath so much of it they never saw the light.

-- Robert Trigaux, Times Business Columnist


[Last modified: Tuesday, June 1, 2010 11:27am]


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