In 2016, when Westchester County was under a federal mandate to develop affordable housing in affluent communities, the county made a $2.8 million deal to subsidize construction of 14 apartments in Pleasantville.
The apartments were never completed.
Now Westchester is demanding $2.6 million from the developer, Migi Asset Acquisition LLC, Long Island City, in a complaint filed last month in Westchester Supreme Court.
Westchester paid $1.8 million for a vacant structure at 98 Washington Ave. near the center of the Pleasantville business district, and then sold it to Migi for $1. The government, under the administration of county executive Robert Astorino, also agreed to pay Migi $993,000 to partially cover the costs of gutting the structure and building 14 rental apartments.
The deal was even more lucrative to Migi than the county’s lawsuit lets on. The complaint does not say from whom the county bought the property. According to property records, it was Migi.
Hudson City Savings Bank had bought the property for $1,425,000 in a 2013 foreclosure sale. Migi bought it from the bank a year and a half later for $1,150,000.
So when Westchester bought the property from Migi for $1.8 million, and sold it back to Migi for $1 on the same day, the company realized a 57% profit of $649,999.
The county’s lawsuit also does not explain how Migi was selected for the project.
The company is managed by Peter Aytug, a New York real estate investor who founded York Funding, according to a LinkedIn profile, and who has closed $5.8 billion in short-term commercial loans.
The Pleasantville plan was to create apartments for households with incomes from 50% to 60% of the county’s median income, according to covenants agreed to by Migi, Aytug and the county. Initial monthly rents and utilities would cost tenants about $1,012 to $1,245 for a one bedroom apartment and $1,510 for a two bedroom apartment.
The project budget was $4.4 million. The county’s share would have been 63%, not including Migi’s profit from selling the property to the county, and 78% if the profit is included.
The apartments were not done by a December 2018 deadline, and at Migi’s request the deadline was extended to June 30, 2020.
The county says Migi has drawn $788,533 from the $993,000 subsidy and has mortgaged the property for $2.2 million.
But the building permit expired in February 2021, the complaint states, and the developer has not tried to renew it.
Westchester claims that Migi abandoned the project; has failed to maintain or secure the premises, resulting in damages inside and outside; and is delinquent on property taxes and utilities.
The county accused Migi of breach of contract and unjust enrichment. It is demanding $1.8 million for the property and $788,533 for the subsidy payments.
Aytug did not respond to an email requesting his side of the story.
White collar “financial” crooks are no less offensive to society than those who rob and burglarize. They should be charged, prosecuted, convicted and given LONG prison sentences.