The Howard Hughes Corporation® Announces Plan For Affordable Housing At 250 Water Street In Lower Manhattan & Revived South Street Seaport Museum As Part Of Broader Seaport Vision

Rhea-AI Summary

The Howard Hughes Corporation (HHC) has proposed a $1.4 billion development in Lower Manhattan's Seaport area, converting a parking lot into a mixed-income project with affordable housing, a new museum building, and financial support for the Seaport Museum. The scheme is expected to create nearly 2,500 permanent jobs and 2,000 construction jobs, generating over $1.8 billion in economic impact. Designed by Skidmore, Owings & Merrill, the plan incorporates community feedback and aims to improve the area's housing landscape while preserving its historical significance.

Positive

• The proposal includes the first affordable housing in Manhattan Community Board 1, providing at least 100 affordable apartments.
• Estimated $1.8 billion economic impact, including $640 million in new labor income.
• Creation of approximately 2,475 new permanent jobs.
• $50 million allocated to support the South Street Seaport Museum.

Negative

• The proposal requires various government approvals, which may delay project timelines.

NEW YORK, Oct. 22, 2020 /PRNewswire/ -- The Howard Hughes Corporation® (NYSE: HHC) today unveiled a comprehensive proposal for Lower Manhattan's Seaport area, including the transformation of an underutilized full-block surface parking lot along the boundary of the South Street Seaport Historic District into a mixed-income development that would include some of the area's first new affordable housing in decades. The $1.4 billion proposal also provides for the long-term financial stability of the beloved South Street Seaport Museum, improvements to the Museum's historic buildings that will allow it to reopen, and a design for a new Museum building on an adjacent vacant lot. HHC's plan comes after more than a year of community input that significantly helped shape it. The plans were designed by world-renowned architecture and urban design firm Skidmore, Owings & Merrill (SOM). As the city focuses on economic recovery from the ongoing pandemic, the 250 Water Street development will help propel that recovery through more than $1.8 billion in economic impact for the city and state, creating nearly 2,500 permanent jobs and roughly 2,000 construction jobs. HHC recently repaid the debt on its Seaport ground lease, has nearly $1 billion on its balance sheet, and is in a strong position to carry out the project.

"The Howard Hughes Corporation remains firmly committed to the Seaport and New York City for the long-term, with mixed-income housing and a plan to save the Seaport Museum at the heart of our commitment," said Mary Ann Tighe, member of HHC's Board of Directors, and Chief Executive Officer of the New York Tri-State Region for CBRE. "We believe visionary projects like this will help propel the city's economic recovery." 

"As New York City works to recover from the devastating impacts of the pandemic, we are redoubling our commitment to the city and the Seaport. We aim to be part of the solution by investing in this unique, historic neighborhood and its economy, providing a crucial lifeline to the Seaport Museum, and building affordable housing in an area where housing prices are out of reach for most New Yorkers," said Saul Scherl, President of the New York Tri-State Region, The Howard Hughes Corporation. "Over the last five years, we've received input from a wide range of neighbors about the Seaport's future that has helped shape our proposal, which honors the area's history and culture. We're eager to continue the constructive dialogue with the community and our local elected officials as we move toward public review."

"For decades the Seaport Museum has credibly delivered its world-renowned and award-winning program despite a perennial shortage of reliable revenues," said Jonathan Boulware, President and CEO of the South Street Seaport Museum. "Following the repeated setbacks the Museum has endured, the pandemic is a terrible blow. The proposed financial support from this project and phased improvements to its Schermerhorn Row home would go a very long way to ensuring that this irreplaceable jewel in New York's crown survives and thrives."

The centerpiece of the proposal is 250 Water Street, which will include the first affordable housing built in Manhattan Community Board 1 through the City's Mandatory Inclusionary Housing program. It will bring at least 100 critically needed permanently affordable apartments to a Community Board district where just 2.5 percent of all housing qualifies as affordable and the median household income is more than $150,000. The MIH rental apartments will be made available to families earning 40 percent of Area Median Income. Of the project's roughly 360 overall units, approximately 25 percent will be affordable, along with approximately 260 condominium units.

This new affordable housing is particularly significant following the exit of nearby Southbridge Towers from the Mitchell-Lama housing program in 2015 with a co-op conversion that has resulted in more than 1,650 formerly income-restricted apartments being bought and sold at market prices well out of reach for working families.  

250 Water Street is a unique, full block site located on the edge of the Historic District at the transition point between the tall skyline of Lower Manhattan and the lower scale of the Seaport. Vacant and used as a surface parking lot for decades, it has no historic fabric or significance. In planning 250 Water Street, HHC and SOM explored multiple configurations for the site and presented several options as part of three communitywide engagement workshops. Earlier concepts included a single tower standing nearly 1,000 feet. Shaped by feedback from community members, Community Board 1 and elected officials, the highest point of the proposed building is now 470 feet.

The distinctive two-tower design includes a contextually scaled podium base designed to reference the heights, materials and massing of adjacent buildings and the vernacular of the Historic District. The base is articulated at key points to allow light down to surrounding streets and neighboring buildings and includes storefronts that are resonant and compatible with the historic storefronts found in the Historic District. The 250 Water proposal also includes enhancements to the Peck Slip Play Street used by the neighboring Peck Slip School and Seaport families, as well as community-oriented spaces and office space.

The proposal is in keeping with HHC's commitment to preserving the character of the Seaport and honoring its past, which has included refurbishment of the historic buildings on Schermerhorn Row, preservation of the cobblestone streets, and the nearly completed renovation of the esteemed Tin Building. Critically, HHC's plan provides essential support for the South Street Seaport Museum, guardian and curator of the heritage of the global port where New York began. Since 1967, the Museum has been the cultural heart of the Historic District—telling the story of New York's history as a city built by immigrants and its maritime past to generations of students, residents, and tourists. Its collections, which include artwork, photos and artifacts from the city's seafaring heyday, bring the history of New York's first commercial center to life.

Over the past two decades the museum has survived significant setbacks, including a two-year closure after 9/11, the 2008 financial collapse, crippling flooding during Hurricane Sandy, and now an existential threat resulting from the pandemic, making the need to strengthen and secure its finances more vital than ever.

The Seaport Museum is the steward of a large collection of historical assets in the Historic District, including as its most significant and visible holdings its 19th-century home on Schermerhorn Row, a working letterpress printing shop, and its fleet of historic ships. For many years, the Museum has cared for these properties at the expense of its long-term financial health; without reliable funding, the Museum faces a potential for permanent closure in the wake of the ongoing pandemic. 

Through HHC's proposal, $50 million will be available to the Museum, providing it with a secure recurring revenue stream and allowing it to advance a first phase of restoration and rehabilitation that will enable the Museum to reopen.

Building on this solid financial base, the Museum will plan for a new state-of-the-art building that will meet its programming needs. The future vision is for the museum to maintain and restore key current properties, which are crucial testaments to the history of how New York was built and grew, as well as construct a modern, properly climate-controlled, high-ceiling space suitable to display precious art and artifacts from its collection. HHC is funding significant design and planning costs to enable the Museum's future development, laying the groundwork for a larger fundraising campaign.

The project will also provide significant economic benefits for the area and city at a time when the need for private investment in its long-term future is urgent. The 250 Water Street project's construction will generate more than $1.8 billion in economic output annually for both the city and the state, $640 million in new labor income, and roughly 2,000 construction jobs. Ultimately, the site is projected to create an estimated 2,475 new direct and indirect full and part-time permanent positions, and annually generate $645 million in economic output for New York City, along with $327 million in wages, salaries and benefits. 

A number of government approvals are required for the project. The New York City Landmarks Preservation Commission (LPC) must approve the designs of the 250 Water Street Building and the new Museum Building as well as the improvements to the Museum's historic buildings. Additionally, in order to proceed with the overall project, a framework for transferring unused development rights from the HHC-leased Pier 17 and Tin Building sites to 250 Water Street must be approved. Transferring these development rights to the upland 250 Water Street site will help preserve the low-rise character of the waterfront and the existing built fabric. Through the development rights sale, upon which the 250 Water Street proposal is contingent and requires City review and consent, the $50 million will be made available to the Museum. The proposed transfer builds upon the existing mechanism for transfer of development rights within the Seaport Subdistrict, which has been in existence since 1972.

To move this proposal forward, HHC will undertake a comprehensive public review that will provides numerous opportunities for community engagement and public comment, including at LPC and under the City's full public land use review process, known as the Uniform Land Use Review Procedure (ULURP). The proposal will be formally presented to the LPC in December, and the ULURP process is expected to begin in the spring of 2021. Under this timeline, if approved, construction, and the economic activity it will create, would begin in 2022. 

As part of the 250 Water Street project, HHC is working closely with the New York State Department of Environmental Conservation and Department of Health on a voluntary basis through the rigorous Brownfield Cleanup Program, communicating routinely with local stakeholders and funding an independent community monitor to ensure the safe environmental remediation of the 250 Water Street parking lot. 

ADDITIONAL COMMENTS IN SUPPORT

"At a time when New York City is under so much stress from the pandemic and the economic downturn, this project is an exciting vote of confidence in the future, bringing affordable housing—a top priority for our community for many years—as well as long-term viability for the Seaport Historic District and Museum, and critical brownfield remediation, while removing a surface parking lot with legacy fossil-fuel infrastructure that has been an eyesore and a drag on community redevelopment for decades," said Catherine McVay Hughes, South Street Seaport Museum Board member and former Chair of Manhattan Community Board 1. "It also represents the first pandemic-recovery investment downtown, reminiscent of early investment following 9/11."

"The Seaport Museum and the Historic District were created to support each other," said Brendan Sexton, Chair of the Board of the Museum, the former President of the Municipal Art Society, and former Commissioner of Sanitation. "The Museum was to grant the District a unique and culturally rich identity and the District was to share its value—specifically its real estate value—to sustain the Museum. This latest proposed air rights transfer makes that concept real and will allow the Museum its first ever reliable, recurring income stream. With this, we will build on decades of good work to provide this community, the City, and the world the story of New York's origins, the birth of the port of New York and its nurture into today's world capital."

"Lower Manhattan will bounce back once again thanks to thoughtful projects like this one, which is the right project at the right time for Lower Manhattan for so many reasons," said Frank J. Sciame Jr., Chair & CEO of Sciame Construction, past Board Chair of the South Street Seaport Museum and Board member & past Board Chair of the Landmarks Conservancy. "I've seen many attempts to save the Seaport Museum, but this plan is the only truly workable one I've seen—and the Museum desperately needs it. At the same time, I appreciate that the proposal is sensitive to the Seaport Historic District, including its contextual base that responds well to its surroundings. This investment in our Seaport, our Lower Manhattan, and our city must move forward." 

"As a longtime resident of Southbridge Towers and someone who has been active in the community for decades, this exciting new plan proposed by HHC for 250 Water Street is the first plan to incorporate a viable fiscal support mechanism for our cherished South Street Seaport Museum, the cultural center of this historic neighborhood," said Paul Hovitz, former longtime Community Board 1 member. "It's important to remember that the Save Our Seaport coalition began a few years back as the Save our Seaport Museum Coalition—so this news will surely be cheered by many in the neighborhood. With a design appropriate to its upland location, this proposal will create a safe, more unified pedestrian experience for those of us who live nearby. And critically, it will bring the first mandatory affordable housing to Community Board 1. I'm very pleased to support this plan, which will spur economic recovery for our local small businesses and merchants, and greatly improve our community." 

"The parking lot at 250 Water has long been a void, but also an opportunity: to invest in our local economy, to create jobs, and to build sorely needed affordable housing in Community Board 1," said Jessica Lappin, President of the Alliance for Downtown New York. "The development proposed for the site is an opportunity that needs close and serious consideration. This plan would also bring stability to the South Street Seaport Museum, one of the area's essential cultural institutions. We look forward to the public review process as this proposal moves forward and receives the full attention it merits."

"This project presents an essential opportunity to revive one of our city's historic gems, the South Street Seaport Museum, a place dating back more than three centuries. The museum brings to life New York City's complex maritime history for New Yorkers and visitors from around the world," said Cortney Worrall, President & CEO of the Waterfront Alliance. "The Waterfront Alliance fully endorses this proposal, which would provide a solid and innovative plan to save the Museum—which has proved so elusive for so many years—and ensure it thrives for many years to come." 

"The South Street Seaport Museum is truly the soul of this historic neighborhood, a place that for years has brought our dynamic working waterfront history to life for so many," said Roland Lewis, former longtime President & CEO of the Waterfront Alliance. "Now, HHC is proposing a workable plan not only to get it reopened to the public but to help it thrive, solving the Seaport's Gordian knot at long last. This proposal, which maintains the neighborhood's historic relationship with the waterfront, would provide New York City—the city of water—with a tremendous and lasting benefit. There is no doubt that this is the right path forward for the Seaport."

"I've lived and worked in Lower Manhattan for many years and have seen first-hand the thoughtful planning and positive changes that Howard Hughes has brought to our unique waterfront community," said Denise Courter, Founder of FiDi Families. "The proposal for 250 Water Street will at long last transform a barren parking lot into a project that knits together the fabric of the neighborhood. The importance of providing affordable housing and community space, along with crucial funding for the South Street Seaport Museum, cannot be overstated. This proposal would be a very welcome investment in the Seaport's future at a time when New York City needs it most." 

"I've seen firsthand Howard Hughes' dedication and commitment to building a stronger Seaport district for the families, businesses and cultural institutions that make up the fabric of our community" said Kamau Ware, Founder of Black Gotham Experience. "Their plan for 250 Water Street would follow in that spirit by shoring up the future of our studio and bringing much-needed affordable housing to the area. That is an inclusive vision—one which I'm hopeful our Seaport neighbors will support."

"The development of the Seaport remains incomplete, and is marred by parking lots," said Sarah McNally, owner of McNally Jackson independent Bookstores. "I think Howard Hughes has the right idea for these blocks, and I hope they are able to finish polishing the rough gem of this neighborhood."

"It is very clear that New York City needs investment and job creation now, and forward-thinking plans like HHC's 250 Water Street project accomplish that goal," said Carlo A. Scissura, President & CEO of the New York Building Congress. "This is the moment to say yes to affordable housing in Lower Manhattan near public transit, and to creating scores of construction and permanent jobs that propel the city's economy. Howard Hughes is deeply committed to investing in the long-term success of the historic Seaport area and we applaud this proposal." 

"As an educator with deep ties to the Seaport community, there is no question in my mind that this plan for 250 Water charts the best course forward for families, businesses and workers in our neighborhood," said Kimberly Busi, MD, Founder & Head of School, The Quad Preparatory School. "Over the years, Howard Hughes has been a highly responsible neighbor to the families in the Seaport, from working closely with local nonprofits to funding our beloved Seaport Museum, an essential institution that connects us to our city's waterfront history. The 250 Water Street project will help make the Seaport a better place to live and work for current residents—and provide a home for new neighbors who otherwise might not have had the chance to live here." 

"There is no question: for the hospitality industry, for the Seaport, and for the city to get back on its feet, we need to embrace projects like this one," said Ignacio Cipriani, Operator of the Mr. C Seaport Hotel. "Howard Hughes is a committed steward of the Seaport and I applaud them for throwing this lifeline at just the right moment. We know that visitors will once again flock to the Seaport and a revived Seaport Museum, and it'll be in large part due to Howard Hughes' comprehensive vision for a brighter Seaport future." 

"The South Street Seaport Museum plays such an important role bringing New York City's fascinating maritime history to life," said Tom Berton, Owner of Manhattan By Sail. "It's important that New Yorkers and visitors grasp that history, and that they understand the role of the Seaport in the city's and the nation's growth and evolution. That's why I am so pleased to see this proposal to ensure a bright future for the Museum and why I am hopeful everyone who cares deeply about the Seaport and our waterfront history will get behind this plan." 

"The Seaport is the birthplace of New York and the beginning of its journey as the most important city in the world," said Burchenal Green, President of the National Maritime Historical Society. "The South Street Seaport Museum plays a critical role in proudly preserving that history for New Yorkers. America owes its place in the world in no small part to the history that occurred at the Seaport and many of our country's economic successes and developments sprang from the trade and innovation that happened there. The generosity of this project will ensure that the museum and its mission flourish and The National Maritime Historical Society endorses this wise investment in historical preservation that benefits all of us."

"New York's future depends on innovative and creative strategies that bring housing, jobs and sustainable development together," said Mitchell L. Moss, Henry Hart Rice Professor of Urban Policy and Planning, and Director of the Rudin Center for Transportation, at New York University. "The proposed Seaport project provides: affordable housing in a neighborhood with great access to mass transit, a dynamic mixed-use project rather than a parking lot, and a plan to assure the well-being of the Seaport Museum." 

About The Howard Hughes Corporation®

The Howard Hughes Corporation owns, manages and develops commercial, residential and mixed-use real estate throughout the U.S. Its award-winning assets include the country's preeminent portfolio of master planned cities and communities, as well as operating properties and development opportunities including the Seaport District in New York; Columbia, Maryland; The Woodlands®, The Woodlands Hills®, and Bridgeland® in the Greater Houston, Texas area; Summerlin®, Las Vegas; and Ward Village® in Honolulu, Hawaiʻi. The Howard Hughes Corporation's portfolio is strategically positioned to meet and accelerate development based on market demand, resulting in one of the strongest real estate platforms in the country. Dedicated to innovative placemaking, the Company is recognized for its ongoing commitment to design excellence and to the cultural life of its communities. The Howard Hughes Corporation is traded on the New York Stock Exchange as HHC. For additional information visit www.howardhughes.com.

Safe Harbor Statement

Statements made in this press release that are not historical facts, including statements accompanied by words such as "will," "believe," "expect," "enables," "realize," "plan," "intend," "assume," "transform" and other words of similar expression, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's expectations, estimates, assumptions, and projections as of the date of this release and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially are set forth as risk factors in The Howard Hughes Corporation's filings with the Securities and Exchange Commission, including its Quarterly and Annual Reports. The Howard Hughes Corporation cautions you not to place undue reliance on the forward-looking statements contained in this release. The Howard Hughes Corporation does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

Contacts:

Media 
Risa Heller Communications
James Yolles, 202-997-4559
james@risaheller.com

The Howard Hughes Corporation
Cristina Carlson, 646-822-6910
Vice President, Corporate Communications & Public Relations
cristina.carlson@howardhughes.com

For HHC Investor Relations 
David M. Striph, 972-232-2672
Executive Vice President, Head of Operations & Investor Relations
david.striph@howardhughes.com

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SOURCE The Howard Hughes Corporation

FAQ

What is the proposal by HHC for Lower Manhattan's Seaport area?

HHC proposed a $1.4 billion mixed-income development at 250 Water Street, which includes affordable housing and support for the Seaport Museum.

How much economic impact will the HHC development have?

The development is expected to generate over $1.8 billion in economic impact.

How many jobs will the HHC project create?

The project will create nearly 2,500 permanent jobs and about 2,000 construction jobs.

What affordable housing will be included in the HHC proposal?

The proposal includes at least 100 affordable apartments, marking the first such housing in Manhattan Community Board 1.

What is the timeline for the HHC development project?

If approved, construction is expected to begin in 2022.