Appeals court revives Howard Hughes’ Seaport project  

Decision reverses lower court’s rejection of project in historic district

Howard Hughes’ David O’Reilly and Judge Arthur Engoron with 250 Water Street
Howard Hughes’ David O’Reilly and Judge Arthur Engoron with 250 Water Street (Google Maps, Howard Hughes, Getty, Seaport Vision NYC)

A state appellate court has unanimously reversed a decision that stopped Howard Hughes’ 250 Water Street project, paving the way for a residential tower to supplant a parking lot.

In January, a state court judge had voided the Landmark Preservation Commission’s approval of the 399-unit building, citing an “impermissible quid pro quo” between the developer and the commission.

At the time, Judge Arthur Engoron agreed that Landmarks’ approval of the project likely hinged on the developer’s promises to fund the South Street Seaport Museum. Ahead of the City Council’s approval of the project, the developer pledged to pay $40 million for air rights from nearby Pier 17 and the Tin Building, which would go toward the nonprofit museum.

In Monday’s order, the panel of judges found that mentions of funding during public hearings were not improper and that the “record otherwise does not establish an improper quid pro quo or improper communications between LPC and the developer.”

The panel also ruled that landmarks’ approval of the project “was not arbitrary and capricious or irrational.” 

“We are gratified by the court’s decision, which confirms what we have maintained all along: The Landmarks Preservation Commission’s approval of our project was proper and made in full compliance with the Landmarks Law,” Zach Winik, co-president of Howard Hughes’ New York operations, said in a statement.

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The project still faces challenges, notably the June 15, 2026, construction deadline for projects to receive the 421a tax abatement. An industry source said the project needs an extension of that deadline, which Gov. Kathy Hochul has proposed. Howard Hughes declined to comment.

Because the decision was unanimous, the South Street Seaport Coalition, which filed the lawsuit, does not have an automatic right to file an appeal to the state’s Court of Appeals. It will need to request permission to continue the case.

The decision also continues a pattern of lower New York courts halting development and then being reversed by the Appellate Division. In fact, Engoron stopped residential towers in Manhattan’s Two Bridges neighborhood only to be reversed on appeal.

The 250 Water Street project’s unit count has changed to 399 apartments, with 100 set aside as affordable. 

Orion Jones contributed reporting. This story has been updated with information about the 421a construction deadline.

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