Judge stops Howard Hughes’ Seaport project again, citing “quid pro quo”

Choppy legal waters have again threatened to capsize Howard Hughes’ planned high-rise in the South Street Seaport district. But the developer believes it can right the project on appeal.

A state Supreme Court judge on Thursday ordered construction paused on the 270-unit residential building at 250 Water Street for the second time in three months, citing an “impermissible quid pro quo” between the developer and the Landmarks Preservation Commission aimed at providing “political cover” to the project.

“We respectfully disagree with Judge Engoron’s decision,” a spokesperson for Howard Hughes said in a statement, “and believe that the Appellate Division will overturn this decision in due course.”

Judge Arthur Engoron called the project at 250 Water Street “controversial” and “counter-intuitive” in his ruling, stating that its approval by the Landmarks Preservation Commission was likely based on promises Howard Hughes made to fund the nearby nonprofit South Street Seaport Museum.

“This argument is supported by the record,” Engoron stated, “which demonstrates extensive coordination, over a period of more than three years, between LPC and Hughes Corp. on how to provide ‘political cover’ for the project.” The commission is supposed to consider projects’ historical appropriateness and not be influenced by sweeteners at other locations.

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Chartered into existence by Mayor Robert Wagner in 1965 following the demolition of Pennsylvania Station, the LPC is charged with protecting the city’s “aesthetic, cultural and historic values.” However, the city’s administrative code notes that the commission lacks the authority to “regulate or limit the height and bulk of buildings,” although that is a frequent outcome of its decisions after public hearings with community groups and developers.

Engoron had paused the project with a restraining order in October, and construction had not resumed after that order’s expiration in December, a Howard Hughes representative said.

Howard Hughes’ hopes for a reversal of Engoron’s ruling are bolstered by the outcome of a previous case. After he sided with opponents of four residential towers planned for Lower Manhattan’s Two Bridges neighborhood, the Appellate Division reversed his decision in 2021 and declined to hear further challenges from community groups.

In voting to approve the Howard Hughes project, the landmarks commission failed to explain why it changed course after rejecting the project numerous times, Engoron said in his decision.

“LPC repeatedly rejected prior proposals to build high-rise towers at 250 Water Street despite the location being a parking lot,” Engoron said in his decision. “If LPC wanted to change its position and determine that a parking lot in a historic district could now be converted into a 324-foot tower, that is LPC’s prerogative, however it had a legal duty to acknowledge the departure and explain its reasoning.”

The commission’s membership was different when it considered previous applications for 250 Water Street, as were the proposals.