Allen A.M.E. group may buy Starrett City

A Jamaica church is in the running to take over Brooklyn’s Starrett City, a 46-tower apartment complex of more than 140 acres near Jamaica Bay.
The Reverend Floyd Flake’s Greater Allen A.M.E. Cathedral of New York teamed up with J.P. Morgan Chase & Co. as one of eight suitors to take over the self-contained neighborhood of 5,881 apartments, a shopping center, post office, power plant, recreational complex and religious facilities.
Starrett City Associates, the current owner of the property, announced in late July that they had chosen Flake’s group along with three other bidders, including a partnership of Citigroup Inc., the Central Labor Council, the Metropolitan Council on Jewish Poverty and others, as finalists in the sale.
The eight initial bidding groups submitted offers ranging from $700 million to $900 million for the 34-year-old development. Each of the bidders has included a non-profit organization as the nominal owner of the property, which would enable them to issue tax-exempt bonds to defray the cost of the purchase.
The current process has defused much of the controversy surrounding last February’s bidding process for a proposed sale, which was short-circuited by a private company, Clipper Equity LLC, who made an out-of-the-ballpark offer of $1.3 billion.
The unusually high offer was attacked by tenants and officials as a windfall for the current owner and a virtual guarantee that existing tenants would be driven out of their homes so Clipper Equity could recoup their investment.
That sale was blocked by federal and state authorities, saying that the complex had been created with a sizable and continuing public investment.
Senator Charles E. Schumer, who has played a pivotal role in the entire process, is quoted in published reports as saying he was happy with the bids so far.
“We are light-years ahead of where we were over a year ago when an oversized and overpriced bid for Starrett City would have changed the development forever and forced thousands of tenants from their homes,” Schumer said.
The finalists will now submit “best and final” proposals which are expected to go as high as $1 billion. Government officials and Starrett City Associates are expected to choose a winner by September 1, according to reports.