The Milstein family has ended a decades-long plan to develop one of the South Street Seaport’s largest vacant lots.
Milstein Properties, which has owned the site at 250 Water Street for nearly 40 years and faced downzoning and litigation in its repeated development efforts, sold it to Howard Hughes Corporation for $180 million, the Dallas-based developer confirmed to The Real Deal.
The one-acre site, currently a parking lot, offers nearly 290,000 buildable square feet, property records show. The property also has the addresses of 304-312 Pearl Street, 2-8 Peck Slip and 116 Beekman Street.
The deal, which pencils out to a little over $620 per square foot, consists of a $53 million initial payment and a mortgage for the balance. The financing has an initial interest-free term of six months, with three six-month extension options at a rate of 6 percent annually, Howard Hughes said. The second and third extension options each require a $30 million paydown.
Howard Hughes said it has not yet decided its plans for the site. The deal was reported earlier Monday evening by the New York Post.
Milstein paid a mere $5.8 million for the site in 1979. Starting in the early 1980s, the developer battled with the Landmarks Preservation Commission over the site, with a series of different proposals. One was for a two-building complex; another was for a 770,000-square-foot tower with a concave glass wall and a sculpture of a ship figurehead at the base, according to the New York Times. Residents and Community Board 1 expressed opposition to Milsteins’ plans, arguing they failed to fit in with the surrounding historic architecture.
In the latest iteration, the Milsteins sought to build a 23-story, 450-unit rental building on the site in the 2000s, but hit a roadblock when the city passed a 2003 downzoning in the historic area bound by Brooklyn Bridge down to Fulton Street and from South to Pearl streets. The height restrictions limited construction to 120 feet. The family sued to block the rule, but a judge later ruled in the city’s favor.
Howard Hughes, a publicly traded developer of master-planned communities across the U.S., is a major player in the Seaport area. The firm is at work on the redevelopment of Pier 17 and the Tin Building, and is considering availing of more than 600,000 square feet of air rights from the New Market building and the aforementioned properties.
“This acquisition represents another major step forward in making the Seaport District a vibrant destination and an anchor of the rapidly growing Lower Manhattan community,” said Saul Scherl, president of the New York Tri-State Region The Howard Hughes Corporation.
In another trade of a large Seaport development site, Howard Hughes sold a lot at 80 South Street to China Oceanwide Holdings for $390 million, or about $475 buildable square feet.
Milstein, headed by Howard Milstein, could not be reached for comment.
Milstein is also in contract to sell 7 Hanover Square to the Gural family and Northwind Group for $310 million, and is redeveloping its office building at 335 Madison Avenue into a 1.1 million-square-foot technology campus.