New York, NY. Nixon Peabody LLP advised the NYC Real Estate Investment Cooperative, Inc. (NYC REIC) on New York’s regulatory requirements under the Martin Act in the formation of NYC’s first investment fund towards community and neighborhood preservation.
The NYC REIC is a New York State nonprofit corporation focused on securing permanently affordable space for civic, cultural and cooperative use in NYC, such as community spaces and local businesses. Together with Nixon Peabody, NYC REIC received approval from the New York Attorney General’s office to launch investment opportunities in NYC for its members.
“Real estate investment cooperatives make long-term, stabilizing, and transformative investments for the mutual benefit of members and our cities,” explains Paula Segal, NYC REIC founding member and attorney with the Equitable Neighborhoods unit of the Community Development Project at the Urban Justice Center.
NYC REIC is focused exclusively on investments in New York City, triggering New York’s blue sky law known as the Martin Act. “Although often overlooked, the Martin Act does in fact regulate more than just coops and condos; it also regulates investments in real estate, known as syndications,” said Nixon Peabody partner Erica F. Buckley.
Erica Buckley serves as general counsel to the NYC REIC. Nixon Peabody associate Rajesh Bandla handled the syndication filing for NYC REIC, which was approved by the attorney general last month, giving the go-ahead to offer investment opportunity to the nonprofit’s members.
While the New York City real estate market remains strong, and gentrification continues to change the fabric of neighborhoods, NYC REIC is hopeful their efforts will be able to bring stability to communities. “By becoming investors in the physical infrastructure of our communities, people get a stake in the present and future of those communities,” said Mara Kravitz, a NYC REIC board member and a director at 596 Acres, New York’s community land access advocacy organization.
Nixon Peabody also sees an opportunity for collaboration between NYC REIC and developers. “Many new projects include community spaces that have limited use, or could perhaps be sold at a nominal price upfront to NYC REIC,” according to Erica F. Buckley. “If a project has a community facility space required for a zoning bonus, the developer may wish to consider NYC REIC as a permanent home for that space.”
NYC REIC will seek investment opportunities throughout New York City. “Small businesses and community-based organizations with permanently affordable space can transform our streetscapes from empty retail corridors and abandoned warehouses to vibrant streets filled with local culture,” noted Adele Eisenstein, a NYC REIC board member.