Seaport Developer Weighs Selling Controversial 250 Water Street Site
The Seaport Entertainment Group (SEG), the corporate successor to South Street Seaport developer Howard Hughes Corporation is considering a sale of the controversial development site at 250 Water Street.
In a story first reported by Crain’s New York Business, SEG president Anton Nikodemus said on a Monday earnings call, “250 Water Street is a development project with entitlements to build a 26-story building that includes more than 200,000 square feet of commercial space and up to 399 apartments. This qualifies as a legacy project under the since-expired 421a tax abatement program, which makes it especially attractive in the overall Manhattan multifamily real estate market.”
He continued, “we believe the best value for the company will be realized either through an outright sale to a developer and operator who specializes in multi-family and mixed use developments, or to partner with someone with this expertise. We’ve engaged a leading investment sales team to explore different options for the site, including a partnership or outright sale.”
SEG spokesperson Michela Della Monica told the Broadsheet, “we are continuing to explore multiple options for the 250 Water Street site, which may be an outright sale or a partnership. Nothing is final at this time.”
The possibility of a 27-story building being erected on the site of the former parking lot at 250 Water Street inspired years of opposition and legal battles, which commenced almost immediately after Howard Hughes Corporation purchased the site in 2018. These were largely mobilized by the Seaport Coalition, a confederation of local grassroots groups opposed to any plans that would depart from existing zoning guidelines, or conflict with the low-rise streetscape of the legally protected South Street Seaport Historic District. That campaign drew to a close in 2024, when the final court challenges that could have stopped the project were resolved in favor of the developers.
Michael Kramer, president of the Seaport Coalition, said, “we are not surprised. We always suspected that Howard Hughes Holdings, which is now the Seaport Entertainment Group, intended to sell the approvals and entitlements it secured from the city to the highest bidder. Through various financial maneuvers, we estimate that Howard Hughes has invested over $250 million into 250 Water Street. However, in its most recent SEC filing, the company values this asset at $125 million. It’s a tough time to sell – and perhaps a new buyer will need to return to the Landmarks Preservation Commission [LPC] with a revised design.”
“This is not a ‘quirk of zoning,’” Mr. Kramer continued. “It is a designated, down-zoned, historic district. The LPC is not City Planning – it is a charter-mandated safeguard meant to protect history over profit.” He added that when the initial trial verdict (which favored the Seaport Coalition) was overturned by an appellate court, “it set a precedent. The transaction effectively monetized the air, light, and history of the South Street Seaport Historic District.”
In a separate (but related) development, SEG chief financial officer Matthew Partridge acknowledged on the same Monday earnings call that the Tin Building, a 53,000-square-foot seafood-centric food hall by acclaimed chef Jean-Georges Vongerichten that opened to critical raves at Pier 17 in 2023 has been a commercial disappointment.
“Unfortunately, it has not been profitable,” he said, adding that SEG (which is both a landlord to and an investor in the project) had recently written off $10 million in warrants that would have allowed the firm to acquire an additional 20 percent ownership stake in the venture, on top of the 25 percent it already holds. SEG’s annual report contains a note about the Tin Building food hall, warning “substantial doubt exists about the company’s ability to continue as a going concern.”