Howard Hughes Buys Seaport District Air Rights for $40M
By Abigail Nehring August 13, 2024 1:09 pm
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The Howard Hughes Corporation made good on its end of the deal with New York City to develop a 399-unit residential tower at 250 Water Street.
Howard Hughes paid the city $40 million for the air rights of Pier 16 and Pier 17 at the South Street Seaport, which it will use to develop a long-in-the-works 27-story building, according to property records made public Monday.
Spokespeople for Howard Hughes and City Hall did not immediately respond to requests for comment. PincusCo first reported the deal.
The funds from the air rights will “secure the survival” of the nearby South Street Seaport Museum at 12 Fulton Street, Howard Hughes executives promised in their 2021 building application to the city’s Landmarks Preservation Commission. The museum was founded in 1967 but has been struggling to keep its doors open after encountering financial challenges in 2011, with the city taking over the cash-strapped institution in 2013.
The museum’s president, Jonathan Boulware, said the air rights transfer has been part of the plan for the district for decades.
“The mechanism of air rights transport was actually first used in the Seaport to transfer the air rights over historic structures to an air rights bank,” Boulware said. “It was intended that real estate would support the operations of the Seaport Museum … It was intended to use tools just like this.”
By the end of 2021, the LPC approved the developer’s plan to build the 324-foot 250 Water across a former parking lot three blocks from the Seaport District waterfront. Yet, not everybody in the area was on board.
A group of community activists, the South Street Seaport Coalition, sued to stop the project in 2022, arguing it went against the 1977 landmark district designation in the area and the city had a “quid pro quo” deal with Howard Hughes, best known for developing master planned communities in Las Vegas and Hawaii.
The legal battle wound on for two years and came to an end in May when a New York Court of Appeals judge dismissed the claims, as Commercial Observer previously reported.
And the air rights deal comes weeks after Howard Hughes split off its arm tackling the development of the South Street Seaport into a separate entity, Seaport Entertainment.
Abigail Nehring can be reached at anehring@commercialobserver.com.
