The Howard Hughes spinoff Reverses Course on 250 Water

Seaport Entertainment Group is looking to sell the controversial site in the Financial District that Howard Hughes Holding Company spent years trying to develop.

SEG is marketing 250 Water Street to interested parties, Crain’s reported. There’s no asking price associated with the listing, but the land’s gross carrying value is $143 million, according to an annual report from the owner.

“The best value for the company is going to be realized either through an outright sale to a developer and an operator who specializes in multi-family and mixed-use developments, or to partner with someone with this expertise,” SEG chief executive officer Anton Nikodemus said on a conference call on Tuesday.

JLL is fielding bids for the site.

It’s a stunning aboutface after all of the legal wrangling over the site, which Howard Hughes spent years trying to develop; SEG was spun out from Howard Hughes in August.

Howard Hughes purchased the site for $180 million in 2018 after the seller, the Mistein family, repeatedly tried and failed to secure approval to build on the site. Howard Hughes received final approval to do so at the end of 2021.

But in July 2022, the South Street Seaport Coalition filed a lawsuit challenging the Landmark Preservation Commission’s approval of the project. In 2023, a judge voided the approval, citing an “impermissible quid pro quo” between the developer and the LPC. A panel of appellate judges later reversed that decision.

The site’s development approval is for 26 stories and 399 units. Howard Hughes broke ground in 2022 and placed foundation footings by June 15, 2022, so the site qualifies for the 421a tax abatement after the completion deadline for the program was extended to June 2031.

SEG also signed interactive art exhibitor Meow Wolf to a 20-year, 75,000-square-foot lease at Pier 17. Construction for the buildout is scheduled to begin in the third quarter.

— Holden Walter-Warner