Pleasantville affordable housing developer files for bankruptcy

A developer that was sued by Westchester County for $2.6 million for allegedly abandoning an affordable housing project in Pleasantville has petitioned for bankruptcy protection.

Migi Asset Acquisition LLC, Long Island City, filed for Chapter 11 reorganization Feb. 9 in U.S. Bankruptcy Court, White Plains, declaring assets of $50,000 or less and liabilities between $1 million and $10 million.

Migi is managed by Peter Aytug, founder of York Funding, a firm that lends money to developers who fix, flip and resell apartment buildings. According to his LinkedIn profile, he has originated $5.8 billion in short-term commercial loans over 30-plus years.

In 2016, when Westchester was under federal government pressure to develop affordable housing in affluent communities, the county made a deal with Migi to renovate a vacant building at 98 Washington Ave., Pleasantville.

The plan was to gut the structure and build 14 apartments.

Migi had bought the property in 2014 for $1,150,000 from Hudson City Savings Bank. Two years later it sold the property to the county for $1.8 million and bought in back on the same day for $1, thus realizing a 57% profit of $649,999.

The county also agreed to pay Migi $993,000 to partially subsidize the $4.4 million project.

Work was supposed to be done by December 2018 but the deadline was extended to June 30, 2020. When the building permit expired in February 2021, the apartments still were not finished.

At that point, according to the county lawsuit, Migi had drawn down $788,533 from the project subsidy.

Westchester sued Migi last year for breach of contract and unjust enrichment, claiming that the developer had abandoned the project. The county demanded $1.8 million for the property and $788,533 for the subsidy payments, for a total of $2,588,533.

Migi claims that less than 10% of the work remained to be done when the building permit expired, according to a court record, and alleges that the county arranged with Pleasantville to terminate the permit.

The parties agreed to refer the dispute to a mediator, according to court records, and all depositions were supposed to be completed this month.

When Migi petitioned for bankruptcy protection, the lawsuit was automatically stopped for the duration of the bankruptcy case.

Migi owes nearly $1.8 million to its top 20 unsecured creditors, according to the petition. Most of the claims are for loans, totaling nearly $1.6 million.

The initial bankruptcy filings do not refer to the county lawsuit or potential court judgment.

Migi is represented by Rochelle Park, New Jersey attorney Kenneth L. Baum.