Howard Hughes Board of Directors Approves Seaport Entertainment Split
By Mark Hallum July 19, 2024 12:17 pm
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Howard Hughes Corporation is officially dividing Seaport Entertainment and Howard Hughes Holdings (HHH).
The division means shareholders of HHH, formed over the summer of 2023, will get a payout, and the organization that manages its undeveloped properties in Manhattan’s South Street Seaport and Las Vegas will become its own publicly traded company.
The move has been talked about since October 2023. The company made it official late Thursday with a vote in the affirmative by its board of directors initiating a pro rata distribution of 100 percent of common stock to shareholders of record as of July 31, according to Howard Hughes officials.
HHH did not immediately respond to a request for additional comment.
The purpose of the separation is to allow HHH to focus on building master-planned communities while Seaport Entertainment would focus on hospitality projects.
Seaport will specifically oversee the Las Vegas Aviators baseball team, its 25 percent stake in Jean-Georges Restaurants, and its 80 percent ownership interest in the air rights above Fashion Show mall in Sin City, according to Howard Hughes.
HHH will also be getting rid of estimated $120 million of net operating losses from Seaport from its books, while Seaport Entertainment will manage the South Street Seaport itself as well as the planned 27-story residential development at 250 Water Street. HHH will provide about $25 million to Seaport and pay off the 250 Water Street loan by about $51 million — possibly the $115 million refinance scored by the company in September 2023.
The decision comes just two months after a New York State Court of Appeals judge ruled in favor of the developer in its battle with those opposed to the residential development at 250 Water. The development was initially approved by the New York City Landmark Preservation Commission (LPC) but later challenged in court.
This was prior to the ruling by State Supreme Court Judge Arthur Engoron — the judge who presided over former President Donald Trump’s civil fraud trial that came to a close in February — that the LPC was wrong to approve the 399-unit project in the South Street Seaport historic district on account of the height of the building supposedly violating the 1977 landmark district designation.
Mark Hallum can be reached at mhallum@commercialobserver.com.
