Change on the Horizon for Downtown Site
A significant transformation may be in store for one of Downtown’s longstanding development sites as billionaire hedge fund manager Bill Ackman’s company, SEG, has reached an agreement to sell 250 Water St. for $150.5 million.
This unattractive lot, located near South Street Seaport and inherited by SEG from the Howard Hughes Corp. spinoff last year, has now been acquired by prominent developer Tavros, according to a company announcement on Monday.
Hughes originally purchased the full-block, one-acre site for $180 million in 2018, investing an additional $40 million on Air Rights. The initial vision was for an $850 million development comprising a 27-story tower with 399 apartments and a five-story base featuring offices, retail, and community spaces.
However, neighbors strongly opposed the project due to concerns about its scale, as did local activists. Despite this, Hughes ultimately prevailed in court to proceed with the original plans.
“Don’t think of it as a fire sale,” remarked a downtown analyst, suggesting that SEG was not necessarily seeking to offload the property due to financial distress. “They’ve inherited some burdens,” the analyst added, referencing nearby establishments struggling with profitability.
Ackman, who leads Pershing Square Holdings, controls a substantial 39% stake in SEG. He’s also a significant investor in Howard Hughes, which suggests a strategic pivot towards focusing solely on national projects rather than local ones.
“Ackman acknowledged that some properties need to be sold off,” a source indicated.
Efforts to reach Ackman for comments were unsuccessful.
SEG Chairman Anton Nikodemus stated that the anticipated sale “will unlock capital, poised to reinforce the balance sheet.”
Tavros is currently engaged in noteworthy projects like Gowanus Wharf in both Brooklyn and Manhattan’s Meatpacking District.
Yet, it remains uncertain whether Tavros intends to continue with the vision laid out by Hughes, which underwent extensive city review processes to fend off legal challenges.
There hasn’t been any immediate response from Tavros, co-founded by Nicholas Silver and Dov Barnett.
The original design concept for 250 Water Street featured two towering structures atop a podium.
Landlords, local residents, and commercial tenants are keenly observing developments near the Pier 17 Entertainment Complex, located just a block away from South Street and the East River.
The hope is that the currently vacant lot will eventually be transformed into much-needed residential units and community green spaces.
A decision from Manhattan’s Supreme Court had initially sided with activists, but this was later overturned by the state court of appeals in May 2024.
Hughes CEO David O’Reilly expressed optimism that this legal victory clears the way for construction to commence.
However, the spinoff in July delayed progress once more.
Real Estate Check had anticipated that the newly formed company might look to offload the site earlier this year.
Ellie Chamberland, Senior Vice President of SEG, mentioned back then, “We expect to make further announcements regarding the future of 250 Water Street in the upcoming months.”
The deal was brokered by the JLL team, with Tavros commending Nikodemus of SEG as a “well-placed, experienced developer” who can bring the vision for the project to fruition in alignment with the neighborhood’s character.
