How New York Steered Four Buildings to a Nonprofit Buyer

Four troubled Brooklyn buildings have a new landlord.

After intervention from the city and the state Office of the Attorney General, that landlord is the nonprofit organization IMPACCT Brooklyn.

The city and state AG helped steer a bankruptcy process toward IMPACCT and away from two other bidders, both for-profit entities offering double the cash.

Mayor Zohran Mamdani has made transfers to “high-road landlords,” including nonprofit corporations, a key part of his housing plan. But the story at the four properties demonstrates how the city and state have worked to steer sales even before his tenure.

The recent history with the properties begins in April 2024, when tenants at one of the buildings sued their landlord. Tenants and the Legal Aid Society said the building at 201 Pulaski Street had become “dangerous to the life, health and safety of the tenants” owing to a “long history of neglect.”

The landlord was nonprofit Food First, a Housing Development Fund Corporation meant to provide housing for low-income tenants. Its director had ranked among the city’s worst landlords, according to the city’s public advocate, based on housing code violations.

Two months later, Food First HDFC placed four buildings — 709 Lafayette Avenue, 327 Franklin Avenue, 335 Franklin Avenue and 201 Pulaski Street — into liquidation bankruptcy. The buildings had in total about $1.2 million in debt, mainly tax and other municipal arrears, according to court documents.

The bankruptcy trustee first tried to select Abraham Leibowitz and Isaac Leibowitz as stalking horse bidders for the properties in Sept. 2024. The pair had offered $4.2 million in cash for the buildings, a plan which would recover $2.8 million for the estate, according to court filings.

But the city objected, saying the proposed bidders had no known experience operating affordable housing and that city approval for their takeover, necessary to complete the sale, would be extremely unlikely.

“In not-for-profit law, and in considering sales by HDFC’s, highest offers are not necessarily the best offers to fulfill the corporate purpose of a not-for-profit corporation or HDFC,” the city wrote in filings. “The City’s fear is that the Debtor is using bankruptcy to circumvent the fact that the sale would not be approved under non-bankruptcy law, despite that being a requirement of [the Bankruptcy Code].”

The trustee tried again in July 2025, putting forth a pair of rent-stabilized landlords, Moses Rabinovitz and Chaim Teitelbaum, who offered $4.4 million, according to filings.

The city and state had been pushing for IMPACCT as the bidder at this time, according to court filings, but the trustee complained that IMPACCT was taking a long time to submit a deposit, “[a]ll the while, many of the tenants of the Properties are refusing to pay their rent.”

Finally, IMPACCT was approved as the buyer this week after bidding $2 million for the four properties. That keeps the buildings in the hands of a nonprofit purchaser.

Meanwhile, Food First is battling a complaint from its bankruptcy trustee that it fraudulently transferred funds to its parent company.

Alfred Thompson, Food First’s director, said the accusations from the trustee are “baseless.” Food First had to repay its parent for paying off the mortgage on the properties, he said.

Thompson blamed the bankruptcy ultimately on tenants’ decision to not pay rent and on delays in housing court.

Rents for the apartments in the properties are low — averaging $1,134 monthly, according to filings from the city.

“When the rents are not paid, or when the rents are fixed, while your expenses continue to gallop, including real estate taxes, water, sewer, insurance … exactly how does the city and the state expect those not-for-profit to manage those properties for the benefit of those for whom their charter exists?” Thompson said. “The entity that they sold it to will surely fail soon enough.”

IMPACCT’s purchase is funded by a $3 million loan from the state’s housing arm. Additionally, the city’s housing department anticipates providing construction financing to rehabilitate the buildings.

What we’re thinking about: The city and state obviously like to keep these buildings in the hands of nonprofits, but they do often have to kick in money to do so. What’s the fiscal impact? Send thoughts to lilah.burke@therealdeal.com.

A thing we learned: It’s Climate Week in New York. The Empire State ranks fourth from the bottom among U.S. states in greenhouse gas emissions per capita.

Elsewhere…

— The Mamdani administration highlights its own success in the mayor’s first agency performance report. Affordable housing completions rose 20 percent in fiscal year 2026 to 26,971, “the most in any of the last five years,” according to a release. The city also financed 2,546 supportive housing units and 4,742 affordable homes for formerly homeless residents, the most in a fiscal year in the City’s history.

— The same report highlights a decrease in major crime in New York in fiscal year 2026. Major felonies fell by about 2 percent, including a 20 percent decline in murders. Shooting incidents, meanwhile, fell 15 percent.

—The City Council has asked a judge to dismiss a lawsuit brought by the mayor’s office that would block $10,000 bonuses for teachers’ aides, The Daily News reports.

Closing time

Residential: The most expensive residential sale recorded Thursday was $16 million for a 6,355-square-foot condominium at 150 Nassau Street in the Financial District. Nick Gavin, Ugo Russino and Allie Fraza with Compass had the listing.

Commercial: The most expensive commercial transaction was $95 million for a development site at 10-01 45th Road/45-01 Vernon Blvd in Long Island City. Hans Holterbosch Inc. sold the property to Montgomery Street Partners. There is a new building permit filed for a 133,457-square-foot, 10-story, 99-unit project. Joseph Frankl filed the permit on behalf of Jacob Schwimmer in early Sept.

New to the Market: The highest price for a residential property hitting the market was $28 million for an 8,131-square-foot condominium at 551 West 21st Street in Chelsea. Scott Hustis, Mark Jovanovic, David Son, Nora McGuire and Stojan Trendov with Compass have the listing. The property last traded for $13 million in July 2021.

Breaking Ground: The largest new building permit filed was for a proposed 71,874-square-foot, 99-unit project at 89-51 164th Street in Jamaica. Nikolai Katz filed the permit on behalf of Lead It Builders.

— Matthew Elo