Howard Hughes’ Seaport project gets green light

Court of Appeals, 421a extension make 250 Water Street tower possible

Court Hands Win to Howard Hughes’ 250 Water Street

A photo illustration of Howard Hughes’ David O’Reilly along with a rendering of 250 Water Street (Getty, Howard Hughes)

The state’s highest court on Tuesday declined to hear a challenge to Howard Hughes’ 250 Water Street, paving the way for the 400-unit project.

The New York Court of Appeals denied preservationists’ request to appeal, ending a long legal fight that halted the project as it was staring down a crucial deadline to receive the 421a property tax break.

The South Street Seaport Coalition sued in July 2022, challenging the Landmark Preservation Commission’s approval of the project. In January 2023, state Court Judge Arthur Engoron voided the approval, citing an “impermissible quid pro quo” between the developer and the commission. Howard Hughes had pledged to pay $40 million for air rights from nearby Pier 17 and the Tin Building, which would go toward the nonprofit South Street Seaport Museum.

A panel of appellate judges reversed that decision last June. A call to a representative for the coalition was not immediately returned.

Because that reversal was unanimous, the South Street Seaport Coalition had no automatic right to continue the case at the Court of Appeals. Instead, it had to ask permission, and the court said no.

Last month, the 25-story, 324-foot-tall project surmounted its other hurdle when the state legislature extended the 421a completion deadline by five years, to June 2031.

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A press release from Howard Hughes noted that the extension and the court ruling “cleared all existing impediments to construction.”

The company broke ground in 2022 and was able to get foundation footings in place by June 15, 2022, meaning that it could technically qualify for the now-expired property tax break. But like many developers, the firm was not confident that it would be able to complete construction by June 15, 2026, a requirement to receive the tax break.

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Without 421a, the project would not pencil out, as it includes 100 units of affordable housing. And without the 421a extension, projects not yet underway have been unable to get construction loans.

The company last year completed remediation of the site, which has been a parking lot since 1977 and was once home to a thermometer factory. Howard Hughes’ development will be 550,000 square feet and also include offices, retail and community facility space.

Opponents considered it too tall and not in keeping with the historic district. Supporters noted that it will be across the street from Financial District towers.