South St. Seaport Is Among Tourist Markets for Sale

By Charles V. Bagli
South Street SeaportOwners of the South Street Seaport have put the Lower Manhattan property on the market, saying that it was “seeking partners, investors or buyers.” (Photo: Todd Heisler/The New York Times)

General Growth Properties, the nation’s second largest mall operator, is putting the South Street Seaport in Lower Manhattan up for sale, along with Harborplace in Baltimore and Faneuil Hall in Boston.

The company, which is struggling and billions of dollars in debt, said on Friday that it was looking at its options for the three popular tourist markets. This year, the company unveiled a billion-dollar plan for the redevelopment of the South Street Seaport, which embraces several historic, cobblestoned blocks.

Harborplace in Baltimore
Faneuil HallThe financially strapped General Growth Properties is offering Harborplace in Baltimore, top, and Faneuil Hall in Boston for sale, as well as the South Street Seaport in New York. (Photos: Steve Ruark for The New York Times, top; Michael Dwyer/Associated Press)

“South Street Seaport is among a group of properties for which General Growth is seeking partners, investors or buyers,” Jim Graham, a spokesman for General Growth, said in a statement released on Friday. “We intend to continue working with the city of New York on a plan for the property’s development that they and the community will embrace.”

In October, the Bloomberg administration picked a consortium led by General Growth to develop a 1.7 million-square-foot project in East Harlem that includes office and retail space, a hotel, cultural center and apartments. Mr. Graham said that the company still “looked forward to playing a role in the future of Harlem.”

But real estate executives say that the company has been offering to sell its position in the project.

“I can’t speak to that,” Mr. Graham said. “There’s no change in our status at this time.”

General Growth, which operates more than 200 malls in 44 states, has been laboring under heavy debts, including $900 million that was due by the end of the year. But with the credit markets largely frozen, General Growth like many other companies has found it virtually impossible to refinance its debt. This week, a group of lenders agreed to extend the deadline for repayment of a past due $900 million loan until Feb. 12.

Andrew Brent, a spokesman for Mayor Michael R. Bloomberg, said on Friday:

We remain committed to the redevelopment of the Seaport, whether with General Growth Properties and new partners or with a different firm altogether should the property be sold. The company has indicated its preference is to stay with the project given its unique location and significant potential. General Growth is a non-lead party in a multi-entity development partnership that is building the East Harlem Media, Entertainment and Cultural Center. We are confident the project will continue to move forward, and we have established project milestones and financing requirements to ensure it does.

Comments are no longer being accepted.

SteveR December 19, 2008 · 5:38 pm

Too bad, but their time had definitely past.
Guess there’s no hope that the City will come in and we’ll get a park or public space out it. Say goodbye to another piece of skyline once the developers get it.

Gerry Nally Pier 17 Tenants December 19, 2008 · 5:52 pm

I was waiting for you to write something on Seaport.

As Mr Bagali knows, Rouse and then GGP commenced to attack and displace all the original tenants of only Pier 17 after 9/11 and to replace us with temporary tenants so they could tear down the Pier at will. As a 22 year tenant at Seaport Watch Company at the Pier, I along with my business neighbors paid all the inflated Rouse charges that were billed to us until 9/11.
We were told continuously that the Seaport was in huge debt, even in “The Weitzman Report” look that up Mr. Bagali. (I can supply a copy if you need it) Now by some miracle GGP claims to have zero debt for the Seaport.
Doesn’t that raise “Madoff accounting questions” for you.
This whole situation and the ruination of our businesses, again of which you are aware, is criminal.
while we 18 long term tenants are still in court with GGP 4 years later, we will now await the next owner, bring them on.

Gerry Nally, Pier 17 Tenants Association 646 387-5794

Lyle Vos December 19, 2008 · 6:20 pm

I am glad it is up for sale. It’is currently underutilized. With the blessing of city planners and the Mayor, I am proposing to put a casino on the site along with adult themed enterprises and a large stadium like concert hall.

Jim from Brooklyn December 19, 2008 · 8:03 pm

What we need down there are more condos for the investment bankers, stockbrokers and lawyers.

Wally Withers December 19, 2008 · 8:32 pm

just hope those buildings in the photo for this article aren’t torn down, it would another tragedy to what is happening to our local landscape with nyc.

George December 19, 2008 · 9:53 pm

It is amazing how some folk just “fall to type” such as poster #1.

GGP is a developer and it had planned major changes to the South Street Seaport – which is a real estate property, NOT a museum. The changes they wanted require zoning changes and a lot of controversy was flowing around this past Summer even as GGP’s finances were cratering.

For those who know anything about property development and ownership – GGP came to own the South Street Seaport property as the result of its acquisition of the Rouse Corporation several years ago.

It was Rouse that originally during the 1970’s and ’80’s developed Fanieul Hall in Boston, Inner Harbor in Baltimore and SSS in New York. They were early urban re-use projects intended to save older landmark areas by creating a marketplace out of them.

The causes of GGP’s financial problems are many – including two over-leveraged high-end malls in Las Vegas known as the Pallazo and Fashion Mall for which they have just yesterday gotten a temporary reprieve from their lenders.

The purchase of those Rouse properties was accomplished, in part, by GGP assuming various bonded debt issued by Rouse to finance the properties. Many of these bonds are due in March and April of 2009.

The fact that they have now put these properties up for sale is a sign to GGP creditors that the company is scrambling for cash. Particularly since only a few weeks ago GGP assured it’s various lender that it had the capacity to pay off the Rouse bonds and would not be selling the properties.

It sometimes amusing to read totally uninformed yet opinionated posts on these blogs. But at other times it just gets to be too galling to hear idiots and ideologues blather on about of which they know nothing.

Robert Ingenito December 19, 2008 · 10:08 pm

Visitors to the New York’s South Street Seaport, Baltimore’s Harborplace and Boston’s Faneuil Hall will notice that they all share the same qualities and have the same feel. Visit one and you’ve seen them all. This is, in my opinion, a result of all three properties being owned and operated by General Growth Properties – a large, multi-city corporation.

I had the pleasure of living in Seattle, Washington for three years and spent many weekends visiting the lovely and charming Pike Place Market. Run by a quasi-government authority, it is overseen by a 12-member volunteer council made up of Seattlites working for the a Seattle institution. The result: a very community-based, farmers’ market that is loved by both tourists and locals.

Waterfront markets like the South Street Seaport, Harborplace and Faneuil Hall should capture the local essence of their communities. New York, Baltimore and Boston are very different cities. Their respective waterfront markets should reflect those distinctions.

Ray December 20, 2008 · 4:46 am

Three great properties. The weak economy reveals the bad leasing strategies of GGP. The bones at the Seaport are great – and Rouse originally hit the nail on the head in NY, Boston and Baltimore. Any new owner will need courage. Start by removing the national retail chains that have ceased to excite consumers – the gap, Abercrombie & Fitch, J. Crew, Sharper Image … is that the type of retail such a site requires? Get back to basics… restore the Market Hall food stalls please! and then figure out what’s next.

Oh… and please, please, please. Not another Westfield Shoppingtown.

David L. NYC December 20, 2008 · 8:27 am

Aside from a handful of attractions (such as the ships and the museum), South Street Seaport is boring. Even the Peking, Wavertree, and Ambrose (in their static roles) aren’t as interesting as they could be. Like the Pioneer and Howard, these vessels should be restored and used for harbor cruises – and the entire business should be moved to the Hudson and moored near the USS Intrepid.

jwp-nyc December 20, 2008 · 10:23 am

South Street Seaport was ill conceived from the beginning and Rouse & Company was emblematic of the trend to make NYC a mall for America. They attempted to sanitize the district but were thwarted for years by the smell of fish and inconvenient transportation options to the area. Those transportation access issues ultimately drove the Fulton Fish Market to find a more practical (if less romantic) location, but the smell of fish still lingers. Perhaps it is from GGP’s accounting as suggested by post #2, Gerry Nally.

The bottom line is that the conception of South Street Seaport as a mall is fundamentally flawed. Unlike Times Square which is a major transportation and commerce nexus for the City, South Street Seaport is largely vestigial. That’s why retail moved from Schermerhorn Row to Ladies Mile, and migrated upwards to Herald Square as the mass transit system and real estate industries in Manhattan developed in the 19th and early 20 centuries.

The South Street Seaport area should have been given landmark status and then selectively developed by the East River Piers with much more locally oriented commercial development and parking. A Fairway, or Whole Foods + an outdoor Farmer’s Market should be the anchor. Playgrounds, child care centers, and school annex facilities for the Beekman Place Towers and adjacent developments, the Finance District and Chinatown are needed. More ugly architecture, and ground up ‘loft like’ cheesy construction is not. There is still a large parking lot on the Howie Milstein Lot, and the threat of development to the visibility of the Brooklyn Bridge should be quashed.

PDub December 20, 2008 · 11:03 am

Pedestrian zones are a scourge on what could otherwise be vibrant urban neighborhoods. It doesn’t surprise me a bit that it’s a failure.

Jon S. December 20, 2008 · 11:53 am

Redevelopment for the Seaport was/is an excellent idea.

I liked, with the exception of the tower, the plans SHoP presented for the area. Mixing its use, instead of making it a monolithic mall, would, IMHO, be the best use.

Benjamin Hemric December 20, 2008 · 7:10 pm

1) First a bit of background:

If I remember correctly, the City used a large Federal grant (an Urban Development Action Grant, which kind of replaced the Federal government’s urban renewal grants) to help build the South Street Seaport as we see it today — i.e., to help restore the landmarked historic structures (like Schermerhorn Row), to build brand new structures that complemented them (like the Fulton Market building) and to build Pier 17 (a modern day evocation of both the once plentiful enclosed finger piers and the occasional balconied recreation piers that used to line the Manhattan waterfront).

The idea was, primarily, to build a tourist attraction in lower Manhattan that would complement (and help support) the South Street Seaport Museum (and thereby not only “renew” and revitalize the area itself, but the city’s economy as well).

So the City, as I understand it, owns much of the South St. Seaport (including Pier 17), and leases it out to a private company — originally to the Rouse Company, and then to its successor, General Growth — to operate it.

While the Seaport has always been successful, I believe, with tourists (and when it first opened it was WILDLY successful), the problem has been getting non-tourists (and non-office workers) to get there too, especially in “off periods,” because of its out of the way location.

2) I hope this development means the end of General Growth’s (and the Bloomberg adminstration’s) plans to radically redevelop the South Street Seaport’s Pier 17 — although I realize that General Growth and the Bloomberg administration seem intent upon continuing anyway.

3) It’s important, I think, to distinguish between the buildings themselves (both the landside buildings and Pier 17) and the uses to which they’ve been put.

In my opinion, the buildings themselves (most especially Pier 17) are fantastic and unique (and potentially very useful) in the NYC metro area (and also, by the way, significantly different from either Faneuil Hall or Harborplace).

If the Bloomberg administration / General Growth (or its successor) doesn’t want a “conventional mall” to occupy these structures, it should operate them differently or find a different use for them — in other words adaptively reuse them for a more uniquely New York shopping experience or for something else entirely.

It would be a shame to destroy this unique treasure for just more of the same.

4) Although none of the articles I’ve read seem to explicitly state this, it seems to me that the City (the Bloomberg adminsitration?) really wants to redevelop the site so that both the City and the leasee (General Growth) can make more money out of the site.

And it seems to me that both the City and General Properties have been bad-mouthing the Seaport (and perhaps mismanaging it as well) in order to make a better case for such a redevelopment.

If this is true, this is like the City allowing the leasee of the Central Park carousel to let it deteriorate so that both the City and the leasee can then share from greatly increased revenues obtained from a new “improved” replacement carousel to be funded by a brand new condo tower to be built (in the park) above it.

5) I’m certainly not against increased densities or high-rises, but that’s for private developers on their own property (and within legitimate zoning regulations, etc.). I don’t think a mayoral administration should be so quick to think of city property — particularly park-like or low-rise properties — in the same way, or to be so eager to work with a private developer to rejigger city regulations so that a private developer can then develop city properties along these lines.

Benjamin Hemric December 20, 2008 · 7:42 pm

P.S. — Didn’t mean to imply that the City built the Fulton Market Building, etc. (although I do think the City built and owns the pier upon which the Pier 17 pier shed was built). But, the City does, nevertheless I think, own a significant portion of the land under the buildings (e.g., the Fulton Market building) that were built or remodeled by Rouse, the predecessor to General Growth. And of course, it probably still owns most of the open spaces, like the pedestrianized streets.

Wild Turkey December 21, 2008 · 11:24 pm

My Dad first took me to the South Street Seaport Museum in 1968 when it was still a grassroots effort by a few concerned citizens to save a part of Manhattan’s heritage before it was lost forever.

I remember him showing me a postcard of the Titanic Memorial Lighthouse when it was still atop the Seamen’s Church Institute and how impressed I was with it even in its derelict condition just sitting on the street (prior to 1976’s current installation).

My strongest memories of the area at that time are of splinters and broken glass; dead rats and the smell of fish; drunken bums lying around on the street; and, of course, eating at Sloppy Louie’s—which my Mom raved about, but the appeal of which I couldn’t quite fathom at the time.

I strongly remember the 1970 arrival of the Wavertree and the 1975 arrival of Peking (my family was shown cheering the ship’s arrival on local TV) and I, like my father, was pleased and satisfied that South Street Seaport had grown as much as it had since opening in 1967.

Later, like many others, the gentrification and general sanitizing of the area saddened me, but progress is about change and I realized that if we were to save this area for the future it would have to have a purpose and raison d’etre–otherwise it would inevitably be whisked away by urban development.

I never felt that Pier 17 was as good or as interesting as it could have been; however, I think in terms of its architectural scale it was a good addition to the area and I again felt that things were moving in the right direction.

Now I have just read–with great dismay–that General Growth Properties is hoping to sell the area and it makes me fear for the future of both the museum and the entire waterfront area south of the Brooklyn Bridge.

If ever there was a time for the Landmark’s Preservation Commission, in league with the Bloomberg administration, to take strong steps to ensure the flavor of this neighborhood it is now before a new investor comes in with hopes for investment that don’t include preserving the scale of this important waterfront area for New York City’s future.

law ed February 10, 2009 · 1:48 am

SEAPORT
Once again LAWMAKERS messed up a historic location; pushed out (into oblivion!!!) so many ‘pleasant; fun places) – the location should be torn down; a plaque set to denote the history – & left as an open space.
law ed