Howard Hughes Corporation’s spinoff of the Seaport to shareholders last summer likely portends a change of direction for the South Street-area entertainment, dining and shopping complex, downtown sources said — and put a question mark over its valuable but again-stalled development site.
As reported in The Post on Friday, the Seaport’s new owner-operators, Seaport Entertainment Group (SEG), signed hospitality company Grupo Gitano to a nearly 14,000 square-foot lease on Pier 17, where it will replace the Pearl Alley bar-lounge complex by late February or early March.
But the largest issue at the Seaport — a complex of mostly historic buildings centered around South Street and Fulton Street with 470,000 square feet of retail, dining and entertainment uses — involves 250 Water Street, the one-acre site next door that’s empty eight years after HHC bought the land for $180 million.
HHC’s plan for a mixed-use project of apartments, stores and public space was stalled by years of lawsuits.
HHC finally got the green light from the state’s highest court last May, and seemed poised to build an $850 million, 27-story complex with 399 apartments above a five-story base with offices, stores and community space.
But by then, it had decided to spin off the Seaport, including the empty lot, into a new entity, SEG. (Bill Ackman’s Pershing Square has large investments in both companies.) And the fate of 250 Water Street appears in flux. There’s no sign of construction six months since the spinoff.
A downtown analyst said, “Even though the site is fully entitled for the project, SEG might need help. They’re either looking for a development partner or for a developer to buy it outright.”
SEG senior vice president Ellie Chamberland would only say, “We anticipate additional announcements regarding the future of 250 Water Street in the coming months.”
Meanwhile, the two-level, tropical-themed Gitano restaurant and club will be the brand’s US flagship. It has resorts in Tulum, Mexico, and Dubai, and operates a popular pop-up here on Governors Island.
Although Chamberland strongly denied that SEG was shifting the emphasis from locals to tourists, a jungle-themed eatery “with the laid-back luxury of the Yucatan,” as SEG founder James Gardner called it, might have a different appeal than pier restaurants run by local heroes Jean-Georges Vongerichten (The Fulton) and Andrew Carmellini (Carne Mare).
Some steps taken by SEG suggest continuity. It extended Live Nation’s rooftop programming agreement for five years and made the music venue a year-round affair with a glass enclosure. It also formed a closer relationship with Vongerichten’s restaurant company, of which it owns 25%, to operate the Seaport’s food operations.
But SEG said the pier still has 100,000 square feet of unleased space (prior to the Gitano lease).
Chamberland said, “Our goal is to make the Seaport an entertainment and hospitality destination by providing unique experiences that go beyond dining and will be embraced by locals. We are exploring concepts including experiential retail, immersive art experiences, new-to-market concepts, and beloved New York City brands.”
She added, “Our strategy for Pier 17 differs from HHC in that they were focused on leasing office space in the pier [which has ESPN studios and 21,000 square feet of Nike space.] SEG is instead looking to bring additional entertainment and hospitality concepts to the pier to complement the existing offerings.”
SEG’s plans might be clouded by the Tin Building situation. Back in 2022, when the 40,000 square-foot, Vongerichten-branded food hall opened, we wrote, “Its success is crucial to Hughes’ future fortunes at the Seaport,” which HHC held onto when it sold off $2 billion in non-core assets in 2019.
But Gothamist reported last week that the $200 million Tin Building had “struggled” with losses and it just laid off 100 kitchen workers after “a surprise identity check.”
A source said the firings were unrelated to economics but had to do with immigration-status issues.
She added, “Our strategy for Pier 17 differs from HHC in that they were focused on leasing office space at the Pier. SEG is instead looking to bring additional entertainment and hospitality concepts to the pier to complement the existing offerings.”
HHC had leased space to ESPN studios and 21,000 square feet to Nike.
SEG’s plans might be clouded by the Tin Building situation. Back in 2022, when the 40,000 square-foot, Vongerichten-branded food hall opened, Realty Check wrote, “Its success is crucial to Hughes’ future fortunes at the Seaport,” which HHC held onto when it sold off $2 billion in non-core assets in 2019.
But Gothamist reported last week that the $200 million Tin Building has “struggled” with losses and it just laid off 100 kitchen workers after “a surprise identity check.”
Daniel Boulud’s new steakhouse Tete D’Or will soon have even more mouths to feed.
IBM signed a 92,663 square-foot expansion lease at SL Green’s One Madison Avenue, the restaurant’s home, publicly traded SLG reported last week. The deal brings IBM’s footprint there to 372,000 square feet, and brings the redeveloped landmark at Madison and East 23rd Street to 72% leased barely a year since it opened.
SL Green reported strong 2024 office leasing overall across its 24 million square-foot Manhattan portfolio, with 188 deals covering more than 3.6 million square feet.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
