The South Street Seaport’s owner is looking to sell all or part of 250 Water St. after winning a lengthy legal battle for the right to develop a 26-story building with 399 apartments on the vacant downtown site.
There’s no stated asking price for the property, which a predecessor to Seaport Entertainment Group acquired for about $180 million in 2018. The land has a gross carrying value of $143 million, according to Seaport’s annual report.
“The best value for the company is going to be realized either through an outright sale to a developer and an operator who specializes in multi-family and mixed-use developments, or to partner with someone with this expertise,” Anton Nikodemus, chief executive of Seaport Entertainment, said on a conference call this morning.
Seaport Entertainment was spun off last summer from a larger developer, Howard Hughes Corp., and is trying to gain its footing as a public company. Quarterly net losses widened to $41 million from $36 million a year ago, while revenue for the period ending Dec. 31 was little-changed at $22.8 million. The company’s share price has lost a third of its value since the spinoff and was down 5% Tuesday morning, to $21 a share.
In addition to 250 Water St., Seaport Enterainment’s holdings include Pier 17, a 3,500-seat rooftop concert venue on the East River. It also has the Tin Building, the former Fulton Fish Market that in 2022 was converted into a food hall presided over by chef and entrepreneur Jean-Georges Vongerichten. Because the food hall isn’t profitable, Seaport officials said today that they plan to slim down offerings and reduce the number of kitchens to one from two.
Seaport Entertainment owns a 25% stake in Jean-Georges Restaurants, which has been selected to take over the space used by the Bryant Park Grill, one of the nation’s highest-grossing restaurants. Nikodemus said an agreement isn’t finalized.
Seaport’s decision to retreat from 250 Water St. is startling because management fought three years for the right to develop the site. Community groups argued a new 550,000 square-foot tower would compromise the protected neighborhood’s historic character, but last year the state Court of Appeals ruled that development could proceed.
After last year’s spin off was completed, the newly independent Seaport raised $175 million in cash by selling shares, but management has decided that developing a tower isn’t the best use of the proceeds. Nikodemus said on the call that the 250 Water site is eligible for tax incentives under 421-a, an expired program for developers who build affordable housing.
“Given this tax abatement structure, we believe the project’s development opportunity is especially attractive,” he said.
