Tenants left high and dry after Church of England abandons New York towers

Alex Frean and Christine Seib The Times 02/15/2010 13:06

The Peter Cooper Village and Stuyvesant Town apartment complex in New York City abandoned by the Church of England

When the Church of England walked away from a £40 million investment in a Manhattan apartment complex last month, it simply wrote off the entire amount, promising that “lessons would be learnt”.

Yet many of the tenants of the 11,000 apartments are still dealing with the fallout. Left in limbo as a new buyer is sought for the buildings, they have serious concerns about who will maintain the complex.

The move also puts the Church at the centre of a heated debate in America about strategic defaulting — walking away from property debts. The Church of England has joined the likes of Morgan Stanley, the banking giant, which stopped repayments on five office buildings in San Francisco that it had bought for $2.5 billion at the height of the property boom.

Many argue it is unfair that banks and businesses can walk away while homeowners are being urged to “be responsible” and continue servicing negative equity — with those that walk being labelled by some as “a new breed of deadbeats”.

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