The Real Deal New York

Howard Hughes strikes deal with Edison that allows it to develop large Seaport building

Combined properties hold 500k sf of development rights

March 31, 2015 04:20PM
By Rich Bockmann

David Weinreb and the Howard Hughes Corp. development site (photo credit Max Dworkin)

David Weinreb (credit Max Dworkin) and the Howard Hughes Corp. development site

The Howard Hughes Corp. has struck a deal with Edison Properties that allows the former to build a large mixed-use building straddling the border of the South Street Seaport Historic District, according to sources familiar with the transaction. 

The Dallas, Texas-based Howard Hughes Corp. and Newark, N.J.-based Edison each own a handful of properties on the block along Front Street between John Street and Maiden Lane. About half of the block lies within the historic district.

City records show that Howard Hughes paid $64.6 million earlier this month to buy nearly 150,000 square feet of air rights from a parking lot Edison owns at the northern end of the block, part of the historic area, and add them to an adjacent development site that Howard Hughes has been assembling since late last year.

The Howard Hughes site, which fronts at 163 Front Street, lies just outside the historic area.

A zoning diagram prepared by SHoP Architects, the firm that the developer’s controversial 42-story mixed-use tower planned just a few blocks north, indicates a project site spanning both companies’ properties.

Representatives for Howard Hughes did not respond to requests for comment, while Edison declined to comment.

SHoP’s zoning diagram indicates the combined properties hold 518,760 square feet of development rights. Howard Hughes properties’ hold several buildings and at the corner of the block opposite Edison’s parking lots, the Lam Group is finishing up work on a 31-story hotel at 161 Front Street.

The site sits about four blocks south and just inland from where the developer is planning to build a controversial, 42-story residential tower on the East River overlooking the historic district.That plan has been met by stiff pushback from community groups arguing it is out of character with the neighborhood, including local Council member Margaret Chin and Manhattan Borough President Gale Brewer, who have opposed the plan in its current form.

Howard Hughes has been active in the area lately, including purchasing about $31 million worth of air rights back in February from a consortium of banks that owns the air rights above the South Street Seaport Museum and surrounding properties.

Edison is a major parking lot owner in New York through Edison Park Fast, and also owns companies such as Manhattan Mini Storage. It recently went into contract to sell Ziel Feldman’s HFZ Capital Group a block-long development site at  518 West 18th Street for more than $800 million, or about $1,000 per square foot, as The Real Deal first reported.

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