Tavros Capital is in contract to buy 250 Water St., the development site of the long-stalled Seaport Tower, for $150.5M.
The property is owned by Seaport Entertainment Group, a hospitality and entertainment company that spun off from Howard Hughes Holdings last year in a deal spearheaded by hedge fund billionaire Bill Ackman. HHH purchased the full-block lot for $180M in 2018, nearly $30M more than what it’s being sold for now.
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“We believe the anticipated sale of 250 Water Street marks a significant milestone for Seaport Entertainment Group, unlocking capital that is poised to enhance our balance sheet, support new sustainable growth opportunities, and create long-term value for our shareholders,” SEG President and CEO Anton Nikodemus said in a statement.
“We are confident that Tavros, an experienced and engaged New York City developer, is well-positioned to bring this project to life in a way that respects the character of the neighborhood and contributes positively to the community.”
The agreement includes a $6M deposit due at signing, with certain provisions to potentially increase the deposit up to $8.5M and the sale price up to $152M before closing, SEG said in a press release. The sale is expected to close before the end of 2025.
An $850M, 26-story tower was planned for the Lower Manhattan site, which was previously a parking lot, but it never came to fruition. The proposal included 399 residential units, approximately 100 of which would be affordable, above a five-story base, featuring 200K SF of office, retail and community space.
Howard Hughes initially planned a much larger project, then scaled back due to community backlash over the tower’s height. The project began the city’s Uniform Land Use Review Procedure in 2021, but the Texas-based developer, which specializes in sprawling, master-planned communities, encountered several headaches throughout and following the city's notorious approval process.
In order to gain local support, HHH committed to pay $40M for roughly 235K SF of air rights for the South Street Seaport Museum. However, that pledge became a point of controversy after a lawsuit from a neighborhood group called South Street Seaport Coalition that formed to battle the development. A state court judge voided the Landmark Preservation Commission’s approval in early 2023, citing an “impermissible quid pro quo.”
Later that year, an appeals court reversed that decision. The preservationist group attempted to continue the fight, but the court denied their request in May 2024, finally allowing HHH to move forward with construction.
But while the land use battle was playing out, HHH lost billions in value from its prepandemic highs and was struggling to gain traction. Last year, it spun off SEG to separate the Lower Manhattan holdings from HHH's projects in Maryland, Texas, Arizona, Nevada and Hawaii.
Ackman helped create HHH as a spinoff from General Growth Properties and served as its chairman before stepping down in April 2024. He invested $900M in the REIT in May and returned as chairman.
The 1-year-old Seaport-based firm, of which Ackman is also the largest shareholder, owns several other properties in the area but eventually decided against pursuing development at 250 Water St. In January, it was looking to either bring in a partner or to sell the 1-acre property, the New York Post reported.
A JLL team led by Andrew Scandalios, Ethan Stanton and Nicco Lupo represented SEG in the deal.
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