Brooklyn, NY - Federal officials have denied approval for the $1.3 billion sale of Starrett City in Brooklyn.
Alphonso Jackson, secretary of the Department of Housing and Urban Development, will announce that the current deal will not pass muster.
The decision comes after HUD lawyers met with deputies of New York state Attorney General Andrew Cuomo to discuss government worries about the purchase of the 6,000-apartment complex by real estate company Clipper Equity LLC.
HUD notified Clipper Equity on Thursday that the agency will not approve the sale because of a lack of certain information the agency believes is critical and because certain details of the transaction—such as the sale price—lead them to believe the complex may not remain affordable housing, according to sources.
The notification from the U.S. government also indicated the sale could be salvaged if Clipper Equity can provide more information about its credit standing and answer some of the challenges posed by critics.
Senator Charles Schumer (D-NY), who had vowed to block the deal, said he was happy to hear of Jackson's decision. "HUD is doing the right thing. Now we can get back to the drawing board to craft a deal that preserves middle-class housing and supports the tenants," he said in a statement. [WABC]
U/D: 03/02/07. 15:11
HUD just announced, that While the letter to the buyers seemed to leave the door open for the deal to be revived, the housing secretary added today that the â€śdoor is not open, the door is actually closed.â€ť [NY Times]
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