Howard Hughes buys $40M air rights for 250 Water St project

Howard Hughes Holding Company just won big on its South Street Seaport project. 

The developer purchased $40 million of air rights from the city this month for its long-awaited 250 Water Street project, Crain’s reported. 

Although Hughes Holding Company recently spun off its holdings to publicly traded company Seaport Entertainment Group, Hughes is the listed buyer of the air rights, the outlet said.

Crain’s said the 27-story project at 250 Water Street is set to be a 27-story tower which will include 400 units. The plans have undergone a number of changes in the past few years, with litigation slowing it down sometimes.

A New York judge halted construction last year at least twice in a three-month period after Hughes’ dealings with the Landmarks Preservation Committee was questioned. 

The South Street Seaport Coalition called the transaction an “impermissible quid pro quo,” claiming Hughes likely got landmark approval in return for promises to fund the nonprofit South Street Seaport Museum, The Real Deal reported at the time. Hughes ultimately prevailed in the end and the project moved forward.

President and CEO of the museum Jonathan Boulware said the air rights transfer will serve as an “endowment-like investment that will sustain the Seaport Museum as an interpreter of New York City for generations to come.”

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Hughes got another win for the Water Street project when the state extended the 421a tax break completion deadline. The tower will have 100 residential units as affordable housing for those earning between 40 percent and 120 percent of the area median income, or about $56,000 to $168,000 for a family of three.

Howard Hughes bought 250 Water Street in 2018 for $180 million. The previous owner, the Mistein family, had repeatedly tried and failed to secure approvals to build there. Hughes got final approval to start building at the end of 2021.