Like a high school bathroom wall, the Huffington Post is the place one heads to scribble thoughts, ask questions, and defame others. And today, Starwood head Barry Sternlicht comes out swinging on the web site, defending the deal with the FDIC. The piece is written in response to another developer's HuffPo piece attacking the FDIC deal, and while there's not a lot of new information, Sternlicht reiterates the zero interest FDIC deal is intended to help stabilize the market, and help the government recoup its losses. "Essentially the government 'rented' our shop, which has 160 professionals, so that they could recover as much of the 'loss' or the taxpayers as possible," he writes. As for Astani? "He is in our view an extortionist trying to get value for a position far underwater through no fault of ours." And Sternlicht mentions the Solair project, and hey, we get a sales check. "Nearly 200 people attended the opening of the Solair condominium project in Los Angeles and we've sold 32 units in just four weeks." Does he address that questionable quote he gave the New York Times, when he said Starwood would be as powerful as the Saudis when it comes to control of these properties? Nah, but don't we wish he would have.
To be fair, we asked Astani if he wanted to respond to Sternlicht's piece. Oh, yes, he does:
"For Mr. Sternlicht to outright call me an "extortionist" goes to show you how bankrupt his position really is. After all, Starwood acquired the Corus assets at $0.50/dollar, with zero % financing and is receiving a $50 million management fee annually; thus leaving him no incentive to work with local developers. Meanwhile I invested $60 million of my funds and I'm simply trying to finish a key project part of the Downtown Renaissance which has the support of the labor unions, City Council, Mayor and our Congressional Delegation.
As you have reported from the beginning, we auctioned the 77 Loft units and generated $31 million, but since Corus was seized we had to file Chapter 11 and seek the judge's approval to close the escrows so we could pay the contractors and complete construction. Unfortunately since last year, $11 million has already gone to Starwood for interest payment. The project is still incomplete and over 1,000 union jobs remain at stake.
Anyone can generalize that a property is underwater in the current state of our economy, but if Starwood took over a lender’s duties and acted in good-faith, then why has it resisted giving me a reasonable interest rate on my loan instead of asking for 11%? --- Is it possible that Mr. Sternlicht’s real goal is to drive developers like me out of the market so that he can control it. After all, he told the New York Times that Starwood wants “to be like the Saudis in these markets?we will be the guys. We will have price control.” Just like they have done with Solair and others which they have rebranded as part of their “ST Collection.”
· Our Response to Halsey Minor [Huffington Post]
· Meet the Parents! ST Residential Talks Solair, Terranea Resort, More [Curbed LA]