Volume 22, Number 31 | The Newspaper of Lower Manhattan | December 11 - 17, 2009
By Patrick Hedlund
Seaport Winter Garden?
A pair of heavy-hitting commercial property owners are positioning themselves to battle it out for General Growth Properties Inc., the now-bankrupt owner and operator of the South Street Seaport.
Toronto-based Brookfield Asset Management Inc., which manages about $40 billion of commercial property worldwide including the World Financial Center in Lower Manhattan, and Indianapolis-based Simon Property Group Inc., which owns more than 300 malls nationwide, have both been buying up General Growth’s unsecured debt following its collapse earlier this year.
Neither company has made a proposal to General Growth’s board, which is planning to exit from bankruptcy by early next year, according to the Wall Street Journal.
Brookfield, which also owns One Liberty Plaza Downtown, has reportedly scooped up $1 billion in unsecured debt from G.G.P., while Simon’s purchases are so far unknown. However, reports indicate that Simon will try to buy out all of General Growth rather than individual assets.
The Seaport — as well as all of G.G.P.’s 200-plus malls across the country —have remained in operation while General Growth attempts to restructure its billions of debt. The property owner tried last year to develop a new hotel and retail complex on the Seaport’s Pier 17 prior to the April bankruptcy filing this year.
Soho mural movement
Soho preservationists are still working to salvage a nearly 40-year-old mural on Greene St. that was tainted by graffiti last year and is currently being threatened by both the planned construction of a building next door and scrubbing by the city.
The four-story mural, painted in 1975 by artist Richard Haas in the trompe l’oeil style, had remained unchanged on the eastern wall of 112 Prince St. for decades before taggers scrawled over the bottom portion in 2008. Then, earlier this year, a shoe company purchased the adjacent one-story building at 110 Prince St. and announced plans to build a new structure that could legally rise as high as its neighbor, or five stories, virtually muting the mural.
But in subsequent meetings with the developer, members of the Soho Alliance learned that the new building might only rise a total of two or three stories — creating questions over what ultimately to do with the artwork.
“From my point of view, one [story] is very different from two,” said Haas of how the proposed new building’s height would impact his piece, which depicts a cast-iron facade and has led to thousands of similar works around the world. “If you’re going to have two stories” above the original first floor, he noted, “I think you’ve compromised it too much.”
The city Landmarks Preservation Commission will also have some say, since the structure sits within the Soho Cast-Iron Historic District and the mural would be treated as a “significant feature of that building,” according to L.P.C.
The developer and co-op at 112 Prince St. have both committed to helping pay for any restoration of the mural, but Haas said that point could be moot because the wall it’s on requires extensive repairs. Then there’s the issue of the current real estate climate, and when and how high the developer will eventually be able to build. “The confusion begins because there’s no clarity about what they want to do at all,” Haas said, regarding the proposed project’s size.
In the meantime, the owner of 112 Prince St. requested in October that a cleaning crew wash the taggers’ offending spray paint from the mural, which the artist and advocates oppose because it would also erase portions of the underlying work. The Mayor’s Office, which handles graffiti cleanup, noted that the building had been in the queue to be scrubbed, but that — due to inquires about the cleaning — it will now reconfirm the landlord’s decision before moving forward.
Prime retail market
New York City’s reign as the world’s most-expensive retail market continued in the third quarter of 2009 despite a 25 percent drop in average rents over the past year.
According to a global report by CB Richard Ellis, prime retail rents in New York City ended the third quarter at $1,640 per square foot per year — a figure nearly $700 more than the second-most expensive market.
Hong Kong ($976 per square foot per year), Paris ($857), Sydney ($796) and Tokyo ($774) rounded out the top five. London ($756) dropped from the fourth to sixth spot quarter-over-quarter, while No. 7 Moscow ($735), No. 8 Zurich ($673), No. 9 Brisbane ($644) and No. 10 Dublin ($543) remained relatively unchanged over the same period.
Los Angeles (No. 11 at $540 per square foot per year) and Chicago (No. 15 at $500) were the only other American cities to make the report’s top 20, with San Francisco (No. 28 at $320), Miami (No. 59 at $140), Philadelphia (No. 68 at $115) and Washington, D.C., (No. 77 at $85) also earning recognition.
Globally, prime retail rents fell by just 1 percent from the second to the third quarters, reflecting greater economic stability and retailer confidence, the report added.
Meanwhile, New York City ranked just 24th over all for the world’s most expensive office markets, with Midtown posting an average of $68.93 per square foot per year, according to CBRE. London’s West End ($184.85), a pair of Tokyo districts, Hong Kong and Moscow accounted for the top five.