Volume 22, Number 02 | The Newspaper of Lower Manhattan | May 22 - 28, 2009
Seaport firm gets money to continue operations
By Julie Shapiro
General Growth Properties, which owns South Street Seaport, secured a $400 million loan last week that will allow the Seaport mall and G.G.P.’s other shopping centers around the country to remain open for the foreseeable future.
G.G.P. declared bankruptcy in April, bowed under the weight of $27 billion in debt, but promised then that day-to-day operation at the Seaport would be unaffected through the summer. The Seaport has a full slate of events planned for this summer, including Water Taxi Beach, free concerts and a farmer’s market opening Friday.
The $400 million loan, from a group led by Farallon Capital Management L.L.C., is called debtor-in-possession financing. Several lenders offered to provide the financing, including William Ackman, who runs Pershing Square Capital Management and owns a 25 percent interest in General Growth. But G.G.P. decided to accept Farallon’s offer instead.
The financing “provides additional liquidity and also allows us to refinance certain pre-petition secured indebtedness,” said Jim Graham, spokesperson for G.G.P., in an e-mail to Downtown Express. “Our malls and other properties will remain open for business and the bankruptcy process should be invisible to our visitors and customers.”
Before declaring bankruptcy, G.G.P. was working on a redevelopment plan for South Street Seaport that faced hurdles of its own, including critical comments from the Landmarks Preservation Commission. Among the most controversial pieces of the plan in the community was a 500-foot condo and hotel tower on the site of the New Market Building.
Seth Pinsky, president of the city Economic Development Corp., said last Friday that the city still supports a redevelopment of the Seaport and that G.G.P had a “good plan.”
“Whether the developer is G.G.P. or someone who buys the site from G.G.P., that entity is going to want to redevelop South Street Seaport,” Pinsky told reporters in E.D.C.’s offices on William St. “I don’t think the existing conditions at the site make sense.”
Pinsky acknowledged the community’s concerns about a tower on the waterfront, but he said any redevelopment would have to include higher density because of the high infrastructure costs and open space requirements on Pier 17.
“Is the 40-story tower going to become a five-story tower?” Pinsky asked. “I don’t see how the project can be financially feasible if that happens.”
In response to community concerns about a tower adjacent to the South Street Seaport Historic District, Pinsky added, “On the one hand, you want to preserve the historic character of the area by not having a 40-story tower. But if the result of that is the historic Tin Building continues to fall in on itself, I’m not sure at the end of the day that you’ve accomplished a lot in terms of historic preservation.”
Pinsky said the site would require compromises and concluded, “There are certain fundamental realities you have to deal with if you want to see the project move forward.”