Aug. 23 (Bloomberg) -- Howard Hughes Corp., the real estate company whose chairman is hedge-fund manager William Ackman, reached a deal to redevelop Pier 17 at its South Street Seaport property, one of Manhattan’s most popular tourist areas.
Howard Hughes plans a “complete transformation” of the pier into a glass-enclosed retail center, with an open rooftop space to be used for concerts against the backdrop of city skylines, the Dallas-based company said today in a statement. The redevelopment is part of an agreement under its ground lease with the New York City Economic Development Corp.
“The re-envisioned Seaport transforms the pier’s iconic waterfront setting into an energetic, highly engaging destination for shopping, dining and entertainment in lower Manhattan,” David R. Weinreb, chief executive officer of Howard Hughes, said in the statement.
South Street Seaport, which dates to the 1600s, is the 26th most-visited tourist attraction in the world, tied with the Great Wall of China, according to Travel & Leisure magazine. The redevelopment has been approved by the Landmarks Preservation Commission, Howard Hughes said. Construction is expected to start next year and be completed in 2015.
Howard Hughes amended its ground lease with New York City in June, the company said in its quarterly regulatory filing. The new agreement will become effective when Howard Hughes meets certain milestones, “the most important of which is the commencement of construction by June 30, 2013,” according to the Aug. 9 filing.
Once the project has begun, Howard Hughes will get a rent credit of $1.5 million, to be taken over a 30-month period, according to the filing. The company agreed to pay about $1.1 million to maintain the esplanade over five years. Pier 17 has about 195,000 square feet (18,000 square meters) of leasable space.
Howard Hughes also maintains an option to develop a mixed-use project adjacent to the pier, the company said.
The South Street Seaport area, near lower Manhattan’s financial district, encompasses 11 blocks of shops, restaurants and piers, according to Travel & Leisure.
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