Stuyvesant Town was the brainchild of the megalomaniacal Robert Moses, who envisioned a new city of high-rise commercial and residential towers, segregated by race and income and separated by highways. Looking to create a partnership of private enterprise with the city government to achieve this vision, he approached Metropolitan Life with the idea of building Stuyvesant Town. Moses, who held a variety of city positions at the time including Park Commissioner, and was one of the six members of the City Planning Commission, had a reputation for cutting through red tape and getting things done. He already had the Triboro Bridge, Jones Beach, a number of parkways in the city and suburbs, the Bronx-Whitestone Bridge and Flushing Meadow in his portfolio of accomplishments. The state legislature recently had lifted restrictions on the participation of insurance companies in real estate development, allowing Metropolitan to build Parkchester, a privately financed project that contained apartments for more than 35,000 middle-income residents on 129 acres of largely vacant land in the Bronx. Metropolitan was interested in Moses’s proposal but demanded certain concessions from the state legislature before it would commit to such a large scale project in Manhattan, a far more expensive proposition than building in the outer boroughs. A compliant legislature passed the Hampton-Mitchell Redevelopment Companies Law of 1943, tailored to meet Metropolitan’s requirements. Under the contract drawn up, the city would condemn the land, purchase it at market value and then sell it to Stuyvesant Town Corporation, a wholly owned subsidiary of Metropolitan. For 25 years, Metropolitan’s tax bill would be based on the preexisting real estate value of the slum district, rather than on the actual value of the redeveloped property. During this period, the contract allowed Metropolitan a 6 percent annual profit on its capital investment.
Stuyvesant Town had its critics from day one. The opponents, with arguments that echo today, objected to the use of the government’s power of eminent domain for the benefit of private developers, and to the transfer of public streets and land, such as school property, to a private enterprise. They saw the 25-year tax exemption as a taxpayer subsidy of a profit-making enterprise. They objected to the idea of private enclaves in the city, housing people of one economic level and isolated by design from the surrounding neighborhoods. They objected to the population density of the project. They objected to the absence of a public school or other community services within the complex.
Initially the opponents were a small minority of architects, city planners and social reformers who found an early ally in Stanley Isaacs, the only Republican on the City Council. Then Frederick Ecker, president of Metropolitan Life, ignited a fire when he confirmed to a reporter from the New York Post that African Americans would not be accepted as tenants at Stuyvesant Town, a policy already in force for the company’s privately built Parkchester project. He told her that "Negroes and whites don’t mix. Perhaps they will in a hundred years, but not now. If we brought them into this development, it would be to the detriment of the city, too, because it would depress all the surrounding property." Metropolitan Life insisted that, despite the public subsidies and concessions, as a private company Stuyvesant Town had the right to discriminate in the selection of tenants, giving preferential treatment to veterans and barring African Americans, in violation of the public housing laws. It also banned singles and unmarried couples as well as “troublemakers” and other “undesirables.” Following that revelation, the opposition became more vocal. as a growing number of civic and political groups and leaders lined up to denounce the project. One week before the Board of Estimate was to vote on the contract, a freedom rally for “Negro Rights” packed Madison Square Garden where Councilman and future congressman Adam Clayton Powell, Jr. called for the impeachment of LaGuardia.
Moses successfully had fought against an earlier effort in the state legislature to introduce an anti-discrimination clause into the Stuyvesant Town contract, before the discriminatory policy had become public knowledge. Dismissing his opponents as “crackpots” and “social reformers” more interested in creating a political issue than in slum clearance, Moses warned the Board of Estimate that if they did not approve the contract "it will mark the death knell of slum clearance by private enterprise." In the final vote, the only opposing votes were cast by two liberal Republican bluebloods, Newbold Morris, the city council president, and Manhattan borough president Edgar Nathan, on the grounds that the project excluded blacks. "We can't wait a hundred years," Morris said, in response to Ecker’s earlier statement. A series of civil suits followed and the matter was still before the courts in 1946. In an affidavit filed in one suit, a Metropolitan Life spokesperson revealed that the reason no school had been included on the site was that a public school would draw students from outside Stuyvesant Town, including possibly Negroes, into what was to designed to be a private enclave open only to residents and their invited guests. In July 1947, the State Supreme Court ruled that Stuyvesant Town was a private development and that it was "well settled that the landlord of a private apartment or dwelling house may, without violating any provision of the Federal or State Constitutions, select tenants of its own choice because of race, color, creed or religion…Clearly, housing accommodation is not a recognized civil right."
Ecker, who had started with Metropolitan in 1883 as a 15-year old office boy from Brooklyn and had made his mark in the company’s real estate department, insisted that he personally had nothing against Negroes but as president of Metropolitan his first duty was to the widows and orphans who depended on the company’s insurance policies. He claimed that the segregation policy only sought to avoid depreciation of the property and prevent strife and "unfortunate incidents" among the tenants that might imperil the company's investment. Since the Gashouse already was an overwhelmingly white neighborhood, there was no discrimination involved, the company argued. As opposition grew louder, the company announced that it would be building another complex, Riverton Houses, in Harlem to meet the needs of black veterans. Ecker’s position was in line with public opinion at the time, despite the fervent opposition of a progressive minority.