Volume 17 • Issue 31 | Dec. 24 - 30, 2004

Seaport’s new owner not rocking the boat yet

By Ronda Kaysen

The more things change, the more they stay the same. Since General Growth Properties acquired the Rouse Company in November and effectively became the general managers of the South Street Seaport stores, the company remains tightlipped about its plans, the future of the Fulton Fish Market remains the source of endless rumors, and several Pier 17 merchants have lodged yet another lawsuit against Rouse.

“It’s like going to Fleet Bank after Bank of America took it over. They just painted it; it’s still the same bank inside,” said Mike Flanagan, a co-owner of MacMenamin’s Irish Pub at Pier 17, and a plaintiff on the lawsuit against Rouse. The suit was filed just days before General Growth acquired Rouse. “It’s the same management team that’s in place. They certainly haven’t sat us down and told us what their plans are for the Seaport,” he said.

For all intents and purposes, little has changed since Maryland-based General Growth, now the second largest U.S.-based publicly traded Real Estate Investment Trust, acquired all of Rouse’s holdings, including the Faneuil Hall Marketplace in Boston, for $12. 6 billion. The Seaport management team is still steered from its South Street offices by general manager Michael Piazzola. The company has given no hint of its plans for the city-owned Tin Building and the Fulton Market Stalls, to which it has first refusal rights once the Fish Market leaves.

“General Growth absorbed all of Rouse and it’s taking them some time to get their arms around what they’ve acquired,” Piazzola said in a telephone interview. “We need to give them the opportunity to understand what they’ve acquired and build a plan around what it is and all the various constituents.” Piazzola suspects that any new plans will not be divulged until sometime during the first quarter of 2005.

“Sounds like normal posturing to me,” said Marc Donnenfeld, chairperson of Community Board 1’s Civic Center/South Street Seaport Committee. According to Donnenfeld, the board has made several unrequited attempts to arrange a meeting with the company.

When it comes to the future of the Fish Market, General Growth does have considerable time to make a decision. The market is not scheduled to complete its move until March and, according to Paul Goldstein, district manager of C.B. 1, the company has six months after the market closes shop to weigh in with its own plans for the space. “I have a feeling we’re not going to know for a long time,” he said. Goldstein speculates the company has “some interest in optioning that property.”

Rumors persist — like Rouse before it — that General Growth has plans to transform Pier 17. “We see a pattern here of a desire to empty out the Seaport,” said Robert Rubenfeld, a lawyer for the merchants. “They want to redevelop the area and they want all the tenants out.” Many of the Pier 17 merchants have left in recent years, and some of the storefronts remain vacant.

Although Piazzola did not comment on General Growth’s current plans for the Seaport, in the past, he maintained that Rouse was “keeping its options open,” toying with a wide range of possibilities including a movie theater, Cirque du Soleil, a Home Depot and a possible hotel.

The lawsuit, filed in New York State Supreme Court on Nov. 5th, alleges Rouse engaged in “fraud, breach of contract, breach of fiduciary duty, bad faith and unfair dealing.”

General Growth had until Dec. 22nd to respond to the claims. As of press time, Downtown Express had not received confirmation of a response from General Growth. “We expect it [the lawsuit] will go the normal course and be resolved,” said Piazzola. The majority of the plaintiffs in the suit, he added, neglected to pay rent.

The plaintiffs attribute the rent controversy to increased additional charges to the base rent. “Even after 9/11 there was a systematic plan of overcharges,” said Rosenfeld. Several tenants, including Flanagan, sued Rouse in 2003 regarding outstanding charges. The matter was settled in December 2003 in a confidential agreement.

In the meantime, residents and merchants wait for General Growth to make the next move, some with a growing sense of frustration. “I’m not grinding an ax here,” said Flanagan. “I just want to know what’s going on.”


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