1. How can a charity that worked with a big chunk of public funding, run up 1 BILLION DOLLARS IN DEBT that rendered it insolvent and incapable of fulfilling the public duty we paid them to deliver with our taxes? From Crain's:
   

   The bankruptcy documents for Saint Vincent Catholic Medical Centers list many reasons for its financial failure. Some of the financial travails are shared by all New York City hospitals. But others were clearly the result of poor decisions by SVCMC's leadership.

   The documents trace the roots of the current bankruptcy to the previous one. The system's leadership signed off on a reorganization plan in August 2007 that was unworkable.

   “Despite a long Chapter 11 process,” writes chief restructuring officer Mark Toney in his affidavit, SVCMC “emerged from Chapter 11 with a complex capital structure consisting of various layers of secured debt, as well as substantial unsecured liabilities, totaling over $1 billion.”

   But SVCMC filed for bankruptcy protection in July 2005 with $1.1 billion in liabilities—the same amount as when it emerged. Why did the board and management sign off on such a plan, SVCMC critics have long wondered.

   Even after it had restructured, SVCMC couldn't pay off $1 billion in post-bankruptcy debt from its ongoing operations. The new bankruptcy filing on Wednesday states that its “operating revenues have remained relatively constant.” It had operating losses of $43 million in 2008 and $64 million in 2009. St. Vincent's Hospital itself generated $81 million in losses in 2008 and $107 million in 2009.

2. Why weren't the state and city comptrollers on the ass of the Catholic Church back in 2005 when the hospital first declared bankruptcy for such a staggering amoung of money?


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The criminally negligent cancer that has led the Catholic Church to become the number one defender of child rapists and abusers within their priesthood and leadership, has reared its ugly head in the closing of St. Vincent's Hospital. The 160 year-old institution was eerily quiet yesterday when I paid a visit to the place. It shut operations on April 15th and now the fate of what could end up being a community clinic lays in the middle of political theater and takeover bluffery.

I am personally not in favor of a bail out of the Catholic Church anytime soon. Am particularly enraged by the mismanagement and closing of the Elizabeth Seton Childbirthing Center. I gave birth to my second son with the assistance of the ESCbC midwives; albeit at the hospital because he was a VBAC. I will never forgive St. Vincent's for denying thousands of women in Manhattan the best midwifery and doula services we've ever had.
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Tishman-Speyers is walking away from the 56 residential buildings, 11,250 apartments, and over 25,000 residents that live in the properties it bought for $5.4 billion in 2006. Yes, they are walking away as in handing the keys to whomever and bidding adieu.

Strategic defaults are nothing new. Billionaires do it all the time. The issue here is that companies like Tishman-Speyer get to walk away from bad deals; whereas the regular family with a hefty mortgage and lost equity is made to believe they have a moral obligation to continue funding what is a bad financial proposition that no corporation would ever honor themselves. Which is why I absolutely agree with the tone of Michael Corkery's Tishman Speyer’s “Jingle Mail” on Stuyvesant Town outrage over at, of all places, the Wall Street Journal:

Where is the outrage?

[...]

Real-estate developer Tishman Speyer is handing control of the Manhattan apartment complex Stuyvesant Town and Peter Cooper Village to lenders that backed the $5.4 billion acquisition. With the massive property underwater and Tishman having put only $112 million of its own money into the deal, it makes more sense for the Speyers to walk away from the apartments.

Like residential home owners, Tishman Speyer Group calculated that it could take decades to regain the equity lost on its property.

Similarly, Tishman Speyer has calculated that complicated tenant laws in the New York could prevent the company from profiting on the development for many years. (The company’s strategy depended on being able to evict lower paying tenants and replace them with young professionals.)

Yet while residential homeowners are being attacked for not making good on their mortgages, Tishman Speyer has so far avoided such criticism.

As a Stuyvesant Town tenant I am not shocked with this bit of news. From years there had been rumors that Tishman-Speyers, which has helped New York University amass its real estate empire, was going to buy the place. Of course, the rumors started when MetLife entered into a housing agreement with the univeristy and literally slumlorded apartments into hipster fire hazards. Actually, it was thanks to New York University's business that MetLife and Tishman-Speyer got away with illegally vacating and renting at market prices rent-controlled apartments; especially in Stuyvesant Town (where we snarkily renamed the place NYU's dormtown)

Rent laws prevent Tishman-Speyer or any new owners to evict us, but it still feels surreally insecure to be in the middle of one of the biggest real estate failures in the history of the Unites States. Stuyvesant-Town & Peter Cooper were the third largest real estate sales in this country. It goes to show that when it comes to affordable housing for the grey collar working and middle classes of New York City, you cannot leave it to the vagaries of the mythical "free market". And this is why Tishman-Speyers epic failure is Michael Bloomberg's failure as well.

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I think trying to tie the recession with "Octomom" was a bit of a stretch. Still, am comforted by the fact that a "Lady Who Lunches" like Peggy Noonan is feeling the recession in the Upper East Side like this lady who barely lunches here in the East Village :

If you want to feel the bruise of what's happened, pick a neighborhood full of shops and go up and down the street. Here's Second Avenue in the 80s. A jewelry and consignment store on 84th has a new sign on the window: "We Buy Gold." Paul is at the counter, spraying the tarnish off a silver chain. How's business? "No buyin', no sellin', no nothin'. It's a joke. People scared. They're in shock." Nearby, an empty storefront, a bar that had been in business only 10 months. The sign on the window—you see it all over Manhattan now—says, "Retail Space Available." Next door, in a small beauty salon, the owner says "We're trying to survive." In September business plummeted. It's down "at least 30%," she says. July and August had been surprisingly good; her clients didn't go away on vacation. In the fall they were fired. "They lost the job, so they don't need to cut and color so much."

In a liquor store just off 82nd, the owner, from India, says volume is still high but profits are down. "In business, if you have a product under $15, is good. People used to spend $70, $80 on a bottle of wine, all the bankers, the young kids. Nothing moving more than $15."

On 81st, the kosher restaurant has closed. On 79th, the Talbots is gone. "Left a few months ago," says the doorman next door.  read more »