The Howard Hughes Corporation, the developer and owner of the South Street Seaport, is suing two of its insurance companies for withholding more than $8.5 million in payouts after Superstorm Sandy, according to a suit filed in New York State Supreme Court today.
Howard Hughes claims that two of its eight insurers — Ace American Insurance Company and Torus Specialty Insurance Company — have “steadfastly thwarted all reasonable attempts to adjust the seaport loss,” according to the suit. Five insurers have paid out the claims and one insurance company denied Howard Hughes’ claim.
The suit centers on six Seaport buildings, in the district bounded by John Street, Peck Slip, Water Street and the East River. During Sandy, which battered New York in October 2012, water ran into and throughout the buildings, the developer claims in the suit. As a result of the damage, “many tenants” left the premises, Howard Hughes claims. Before Sandy, the South Street Seaport was about 96 percent leased, the developer said.
“ACE and Torus, at a minimum, have wrongfully withheld their proportionate shares of $8,610,036,” the complaint states. Howard Hughes maintains that they showed the insurers sufficient “proof of loss.” “Therefore,” the complaint continues, “(ACE and Torus) breached their contractual obligations to HHC.” The developer is asking the insurers to pay that amount plus 9 percent interest.
ACE declined to comment. Torus’ spokesperson, based in the United Kingdom, did not respond to a request for comment in time.
The Dallas-based Howard Hughes Corp., which has $5.3 billion in assets, has been the defendant in multiple Seaport-related lawsuits as well. In March 2013, retailer the Gap sued Howard Hughes, alleging the developer improperly moved to end the store’s lease inside the Fulton Market Building and ordered the retailer to remove all of its merchandise. The Gap followed high-end catering hall Bridgewaters, who filed a breach of contract suit against the landlord claiming the store was blocked from opening back up after Sandy. While Bridgewaters reportedly only sustained minor wind damage due to the storm, the caterer claimed that Howard Hughes claimed that the building was unfit for use.
Howard Hughes is planning a massive Seaport redevelopment, including a two-story retail hub with a 10,000-square-foot rooftop venue at Pier 17 — the company is looking to break ground on the building this year — as well as a 42-story condo tower, which has met with community opposition.