Volume 17 • Issue 14 | August 27 - September 02, 2004

Rouse, Seaport mall agree to takeover

By Elizabeth O’Brien

A South Street Seaport merchant community concerned about its future once the Fulton Fish Market leaves in early 2005 was further rocked last week by news that the Seaport retail operator would be sold.

The Rouse Company, the Maryland-based firm that has managed retail at the Seaport since 1983, agreed last week to be acquired by General Growth Properties, a large owner of shopping centers. The deal will affect Rouse’s many retail holdings nationwide, including the Faneuil Hall Marketplace in Boston.

Merchants at the Seaport said that news accounts of the $12.6 billion deal took them completely by surprise. Several days after the announcement was first reported in the press, shopkeepers at the Pier 17 mall said they still had not received any word from management about the sale or its consequences.

“It’s not fair,” said one merchant who first learned about the deal from a newspaper account.

Last week’s announcement came at a time of intense speculation among merchants about the future of the South Street Seaport property. Starting next January, fishmongers from the historic Fulton Fish Market next to Pier 17 will begin moving to a new facility in the Bronx.

Under an agreement with the city, which owns the Seaport land, Rouse had the option to develop two buildings occupied by the fish market. This spring, the general manager of Seaport Marketplace said Rouse was working on a master plan that would incorporate those two buildings and that further details would be announced by the end of the summer.

But the projected sale of Rouse throws all plans into flux.

“Considering the company is under new ownership, I don’t know what I’d be able to say in terms of an announcement,” said Michael Piazzola, general manager of the Seaport Marketplace.

Piazzola declined further comment, referring all questions to Rouse corporate headquarters.

“I can’t answer questions about speculation on the future,” said Bob Rubenkonig, a Rouse spokesperson, when asked what the company’s acquisition might mean for the Seaport’s future.

Rubenkonig declined to say how long the deal with General Growth Properties had been pending. It is subject to the approval of Rouse shareholders, who will receive proxy ballots in the mail sometime before the end of the year, Rubenkonig said.

A spokesperson for the city Economic Development Corporation, which oversees the Seaport, said she could not say how the changes in the retail ownership might affect the property’s future.

“We’re looking into it,” said Janel Patterson, the spokesperson.

Faith Hope Consolo, vice chairperson of Garrick-Aug Associates Store Leasing, Inc., said the projected sale of Rouse would probably bode well for the South Street Seaport. General Growth Properties has extensive retail experience, and its holdings are more sophisticated than Rouse’s, she said.

As for any plans that Rouse might have made for the property, Consolo said that General Growth would likely “scratch every deal on the table and start again.”

Merchants say they simply want to know if they have a place in the Seaport’s future, whatever that may be. Many took on debt to stay in business after 9/11, and they have a personal and professional stake in the property.

Even before the deal was announced last week, a group of 14 long-time tenants at the Pier 17 mall joined forces and hired legal representation. The group is not considering legal action now and hopes instead that their lawyers will help them obtain answers about the Seaport redevelopment, said Gerry Nally, owner of the Seaport Watch Company and a founder of the Seaport Tenants Committee.

For the moment, Nally said, merchants are still reeling from last week’s news: “Everyone is pretty shocked.”

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