Lower Manhattan’s South Street Seaport redevelopment is planned to offer New Yorkers an attractive package of benefits they have said they want: a revitalized shopping complex, restoration of historic buildings, repairs to a storm-damaged pier and platform, an extended pedestrian path, and even a marina that could accommodate tall ships.
However, Dallas-based developer Howard Hughes Corp. is planning a component that remains a subject of debate among some New Yorkers: a new mixed-use waterfront tower that might contain a hotel and luxury residences.
The overall goal of the project is to revitalize properties in lower Manhattan that have not met the community’s needs for some time and which were damaged by Hurricane Sandy in October 2012. But to pay for many of those improvements, a significant revenue stream needs to be derived from the project. Chris Curry, senior executive vice president of development at Howard Hughes, says that needed revenue would be derived from the mixed-use building.
Without it, he says, the project just does not make sense for the company.
“We’re doing all we can to create a project that we feel is financially viable, that will do everything the community hopes to do, but also creates an economic return commensurate with the risk we take,” he says.
The massive Seaport project has a lot of parts, including the following:
- Pier 17, an unusually wide pier that extends from lower Manhattan over the East River;
- Retail portions of four mixed-use buildings located in the uplands, a section of lower Manhattan west of F.D.R. Drive, a major elevated highway along the riverfront;
- Several historic buildings on Pier 17;
- The East River Waterfront Esplanade, a roughly two-mile-long (3.2 km) pedestrian and bicycle path along the waterfront; and
- The New Market Building, a vacant one-story structure on the site of the proposed new mixed-use tower.
Pier 17
The Pier 17 portion of the project, approved in February 2013, features a new commercial building. Designed by locally based SHoP Architects, the building will offer 182,000 square feet (17,000 sq m) of leasable retail and restaurant space and approximately 45,000 square feet (4,200 sq m) of rooftop entertainment and public-access space.
“At the edge of the building closest to the water, you’ll be able to see the Empire State Building, Statue of Liberty, and Brooklyn Bridge,” Curry says. “We can put 4,000 people on that outdoor open space, which is going to be one of the most wonderful boutique entertainment venues in the world, and underneath that roof we’ll have a very exciting retail, dining, and entertainment offering.”
In its approval report, the New York City Planning Commission said the redevelopment would provide “improved waterfront open space, a contemporary urban retail environment, including modern architecture, and a varied and revitalized shopping experience, including quality dining services.”
Construction began in September 2013 after the demolition of an enclosed shopping mall built in the 1980s, when fewer people lived in lower Manhattan, according to Michael Slattery, senior vice president at the Real Estate Board of New York, a realty brokers’ trade group.
That project, intended to make the Seaport a viable retail destination, “got off to a good start, but then was challenged to find the right retail mix to make it work,” Slattery says.
The Downtown Alliance, an organization that manages a lower Manhattan business improvement district, attempted to tie the Seaport into Ellis Island and the Statue of Liberty as a tourist destination, Slattery adds, but “it never melded in a way people were hoping for.”
“As a retail destination, it languished a bit and struggled,” he says.
One Yelp reviewer described the retail destination as “a pretty decent tourist trap.”
What has changed is the opening of the new 9/11 Memorial and Museum, located about one mile (1.6 km) from Pier 17. That could draw more people to the area, Slattery suggests.
Curry insists that Howard Hughes is not building a shopping mall in the traditional sense. “We’re building an authentic New York experience that is bringing the street grid of lower Manhattan out onto the water. . . . The tourists are going to come because of the iconic location and the great view from the site, but we are building it for the New Yorker,” he says.
No tenants have been announced for the building, which is expected to open in the fourth quarter of 2016. In a December 2012 letter to the city planning commission, the company said it did not anticipate that any big-box retail would be included.
The Uplands
Howard Hughes’s current leases with the city include obligations to repair and maintain not only Pier 17, but also a large adjacent wooden platform pier that Curry says requires extensive restoration—“an expensive proposition.”
The Pier 17 project cost of $425 million includes renovation of 180,000 square feet (17,000 sq m) of leasable retail space that Howard Hughes controls within four mixed-use buildings located in the uplands. This space—also leased from the city—was damaged by Sandy.
As of December 31, 2013, Howard Hughes had collected $20.5 million from insurance companies and recorded $12.2 million of income as a result of claims related to Sandy, according to a U.S. Securities and Exchange Commission filing.
The company said it expected that insurance would offset “substantially all” of its storm damage and rental-income losses.
In December 2013, iPic Entertainment said it had signed a 20-year lease with Howard Hughes for over 46,000 square feet (4,300 sq m) in the Fulton Market Building. Not to be confused with the Fulton Fish Market, which relocated from Pier 17 to the Bronx in 2005, the Fulton Market Building is located across F.D.R. Drive directly opposite Pier 17. In the second quarter of 2015, iPic plans to open an eight-screen movie theater in the space.
Slattery says storm risk should not present a significant deterrent to other prospective tenants for Pier 17 or the renovated uplands retail space. “We’ve learned a lot and been quickly trying to incorporate [new measures] in any new developments and zoning changes so waterfront sites will be more resilient,” he says.
More Redevelopment
The latest Howard Hughes proposal would extend the East River Waterfront Esplanade, which begins at the Battery Maritime Building near Battery Park and currently ends at Pier 17. The plan would affect several existing buildings on the pier. The plan also would call for adding a road; extending two existing lower Manhattan streets onto Pier 17; constructing a new mixed-use building on the wooden pier platform adjacent to Pier 17; and building a new marina off the pier and platform. The Link Building, which Curry describes as “a little sliver of a building” originally erected to hide the Fulton Fish Market, would be demolished.
A larger structure, the Tin Building, would be dismantled, catalogued, restored, and elevated to accommodate new flood maps by the Federal Emergency Management Agency. After the restoration, the Tin Building has been tagged for “a locally sourced food market that has everything from produce to meats,” Curry says.
The Tin Building also would be moved back because part of it currently extends under F.D.R. Drive, which was built after the Tin Building.
The highway presents a challenge for pedestrians who want to access Pier 17 from the uplands. “The F.D.R. has been historically somewhat of a barrier,” Curry says. “Tourists [cross] it because they want to see the view of the Brooklyn Bridge. New Yorkers don’t because there’s nothing for them to enjoy.” To overcome that impediment, Howard Hughes wants to extend Fulton and Beekman streets into a one-way loop that would give vehicles access to the pier.
Fulton Street is important because it could connect the Seaport to the 9/11 memorial site. “That corridor between the World Trade Center site and the Seaport will be much more direct, easier to access, [and] that level of traffic will enhance the Seaport’s appeal,” Slattery says.
The estimated cost to rebuild the platform, restore the Tin Building, extend the Esplanade, and complete some other work is in the $150 million to $200 million range, Curry says.
The marina is envisioned as a place for tall ships to moor as well as a venue for other waterfront and water-related commercial and recreational activities.
New Mixed-Use Tower
Curry says that neither the food market nor the marina would generate enough rental income to make the rest of the project viable.
“The food market probably isn’t a big moneymaker. We believe it’s appropriate for that building in this district, but if you look around the country, most of the great food markets are [run by] nonprofit corporations. . . . The marina probably will have to support itself, but we will probably end up subsidizing it as well,” he says.
That explains why the company wants to replace the existing New Market Building—a vacant one-story structure on the platform pier—with a new building that Curry describes only as a taller mixed-use property.
In a March letter to shareholders, David R. Weinreb, the Howard Hughes chief executive officer, said the project would have nearly 700,000 square feet (65,000 sq m) of space and include “a LEED-certified building with hotel and residential uses.” The company has not disclosed a cost estimate.
Too Tall?
That hotel and luxury housing tower has come under fire from the Seaport Working Group, an advisory committee made up local officials, small business owners and groups, Howard Hughes representatives, and residents of lower Manhattan.
In June, the group presented a four-page document that outlined nine guidelines and more than 30 principles that it wanted developers to honor within the historic district that overlaps part of the Seaport. The guidelines cover community and connectivity, open space, preservation, building heights and views, the pedestrian environment, and other topics. The document notes that “alternatives to the proposed 50-story tower should be sought, and any building on the New Market site should be contextual with the buildings within the South Street Seaport Historic District.”
Curry says that the height of the building was “the only guideline that created any controversy,” and that the project needs a revenue source—especially since the community also wants the developer to offer a community center and participate in some sort of rescue plan for the undercapitalized South Street Seaport Museum and its fleet of historic ships.
“The only [way] to really generate economic benefits to pay for replacing the deteriorated platform, restoring the Tin Building, extending the Esplanade, and building all these other elements that will create better connectivity to lower Manhattan is to build a significant building on the New Market site,” he says.
Historic District
Slattery calls the mixed-use project “the economic engine for the Sandy-related repairs and other benefits that are needed to make the project viable.” Without that, he says, it’s difficult to see Pier 17 as a successful stand-alone entity.
He also notes the community’s objections to the proposed building’s height, given its proximity to the historic district, where buildings are generally not that tall. “There’s been a great deal of concern about the appropriateness of that property to Seaport,” he says.
The historic district, which overlaps the Seaport, is a crucial consideration that affects several aspects of the project, including the buildings on Pier 17.
“The [line] was drawn when there were two piers,” Curry explains. “The Pier 17 building was built between the old Pier 17 and Pier 18. Pier 17 was inside the historic district. Pier 18 was not. That’s why [the line] goes through the building. The Tin Building is completely within the historic district; the New Market Building is not.”
Much of the additional work is subject to an approval process that includes an environmental analysis, a review by the city Landmarks Preservation Commission, and an application for a Uniform Land Use Review Procedure, known as a ULURP review.
The company plans to present a revised proposal to the Seaport Working Group, then proceed with the environmental analysis and begin the seven-month ULURP process in the first quarter of 2015. With that timeline, the project could be ready to open, in stages, in 2017 or 2018, Curry says.
The city planning commission referred questions about the proposal to the developer.
Affordable Housing
Curry says that no new buildings are planned for the uplands portion of the Seaport project, but Howard Hughes also controls a 5,000-square-foot (465 sq m) vacant lot in the area that could be developed. Whether that might be used for a community center, affordable housing, or some other purpose is unknown. The project will have an affordable housing component, Curry says, though it is not clear where that housing might be added.
“I think that would happen in the uplands area. It’s too early to tell what that might look like or how big that might be. Those are ongoing discussions we’re having with the city,” he says.
New York City Mayor Bill de Blasio in May outlined a ten-year plan to preserve 120,000 affordable apartments and build 80,000 new affordable apartments throughout the city’s five boroughs. The mayor’s office did not respond to repeated requests for comment on the Seaport project.
Marcie Geffner is a freelance reporter and book editor based in Los Angeles.
