‘It Is Hard to Fight City Hall’

Developer Prevails in Legal Battle Over Planned Seaport Tower

On Monday, a long legal battle by community activists to prevent the construction of a large residential tower in the South Street Seaport came to an end, when the State’s highest court denied the project’s opponents the opportunity to appeal a previous ruling that went against them.

The lawsuit was brought by the Seaport Coalition, a confederation of local groups opposed to plans to erect a large development at 250 Water Street, against the City’s Landmarks Preservation Commission (LPC), which had approved the plan.

At issue is the Certificate of Appropriateness (COA) that the LPC issued for the project, in May 2021. This was needed because the proposed 27-story, 324-foot building exceeds the as-of-right zoning limits on height and bulk for 250 Water Street (a 1.1-acre parking lot bounded by Pearl, Beekman, and Water Streets, and Peck Slip), which falls within the legally protected South Street Seaport Historic District.

In January 2023, State Supreme Court Judge Arthur Engoron (the original trial judge) handed down a stinging rebuke to the LPC, decrying what he termed “an impermissible quid pro quo” under which LPC was influenced to issue the COA based on other public benefits that the developer, Howard Hughes Corporation (HHC), has promised in exchange for permission to build the tower, such as funding for the South Street Seaport Museum and the creation of at least 70 affordable apartments within the new building. While Judge Engoron did not dispute that such benefits would be valuable and important, he concluded that consideration of them falls outside of the LPC’s legal authority.

The following May, HHC asked the Appellate Division to reverse Judge Engoron’s verdict. A month later, that court overruled the original decision, finding that “LPC’s determination to issue a COA… was not arbitrary and capricious or irrational.”

The Seaport Coalition then tried to overturn this reversal, seeking a review by the State’s highest judicial panel, the Court of Appeals. But under New York State law, this must be preceded by filing a “Motion for Leave to Appeal,” essentially asking that court’s permission prior to commencing the next phase of the case. That motion was submitted last September. The Court of Appeals ruled on this filing Tuesday, denying the Seaport Coalition’s motion without comment.

In a statement, the Seaport Coalition said, “the Court of Appeals denied our Motion for a Leave to Appeal, removing the final hurdle for Howard Hughes to construct a tower that will overwhelm and dominate the low-scale South Street Seaport Historic District.”

“We proved in the lower court that HHC spent untold millions of dollars on lawyers and lobbyists to craft a strategy of political cover to taint or corrupt the LPC process and obtain a predetermined result,” the statement continued.

“It is hard to fight City Hall,” the Coalition added. “Recent community battles over Two Bridges, Inwood, Soho/Noho, Elizabeth Street Garden, and now the South Street Seaport Historic District, have been stymied by elected officials and agencies who refuse to engage meaningfully with the community at any level. Instead, Community Boards, grass roots organizations and volunteers must resort to the legal system to balance these inequities, with everyday citizens devoting scarce time and resources to battle big real estate. This ‘new normal’ enables developers to engage in backroom dealings with City Hall while the courts look the other way.”

Developer HHC responded, “today’s court decision upheld the Appellate Court’s ruling in favor of the project and… has cleared all existing impediments to construction and unlocked tremendous value for Howard Hughes shareholders.”

“For too long, the lot at 250 Water Street has been an underutilized part of the Seaport,” said David O’Reilly, chief executive officer of Howard Hughes. “Today’s decision marks a major win for Lower Manhattan and the City and paves the way to begin construction on a vibrant, mixed-use project that will be a significant contribution to the neighborhood.”