Unsettled Seaport Mall Plans Leave Merchants Wary

 by Barry Owens


One after another, colorful renderings of the city's vision for a revamped East River waterfront popped up on the screen in the Community Board 1 meeting room. Most audience members, packed into the room to see these latest plans, seemed impressed by the gardens, pavilions, and a riverside esplanade.

Gerry Nally, owner of Seaport Watch Company, is one of 17 South Street Seaport shop owners who are suing their landlord claiming that the mall was mismanaged. Photo: Allan Tannenbaum

But through it all, Gerry Nally and Eddie Shapiro sat a bit glumly, their arms crossed. Sure, they later said, they were delighted that the waterfront may finally get a makeover, but what they wanted to know was where their businesses and others in the South Street Seaport mall fit into the scheme. They were even more troubled that they had yet to hear a word from their new landlord, General Growth Properties, about plans for the future of the struggling marketplace.

"We don't even know what these guys look like," said Shapiro, who owns two restaurants and four pushcarts in the mall, where he has been a tenant since 1983.

General Growth Properties has kept a low profile since it acquired the Rouse Company's portfolio in November. Rouse's holdings included the mall on Pier 17 as well as an option on the Tin Building and fish market stalls that will be vacated this year by the Fulton Fish Market.

The mall has floundered in recent years. Large retailers like Gap and Banana Republic have pulled out, in some cases replaced by smaller shops with short-term leases and narrower appeal. Other storefronts remain empty.

Some of the remaining tenants filed suit against Rouse shortly before its takeover by General Growth, alleging that mismanagement and poor marketing were to blame for the mall's decline.

The lawsuit against Rouse, which General Growth has assumed, alleges that the company made a deliberate effort to "financially drain" the Seaport mall by diverting promotional and advertising funds, neglecting necessary repairs and maintenance, and failing to lease vacant space to desirable long-terms tenants, thereby making the mall a less desirable destination for shoppers. It was a deliberate strategy, the suit claims, to drive tenants out of business and clear the way for more upscale, mixed use development.

"It sounds complicated, but it's not," said Nally, owner of Seaport Watch Company, and one of 17 shop owners listed in the suit. "We got screwed."

In court documents, attorneys for Rouse dismissed the shop owners' complaints as "paranoid."

General Growth has remained tight-lipped on their plans for the mall and a spokesman for the company, David Keating, said he could not comment on the pending litigation or tenants' complaints.

Keating said that plans for the mall were not yet fully shaped and that it would likely be months before any were made public. He would not say whether those plans included uses other than retail.

"It is a great property, we're excited to have it as part of our portfolio," he said. "We are definitely looking forward to giving New York what it deserves."

While General Growth has declined invitations to address Community Board 1, in late February company representatives sat down privately with Madelyn Wils, the board's chairwoman, District Manager Paul Goldstein, Marc Donnenfeld, chairman of the board's Seaport Committee, Carl Weisbrod, president of the Downtown Alliance, and officials from the city's Economic Development Corporation.

Goldstein said it was apparent from the conversation that "major changes, not just little cosmetic ones," were in store for the mall.

He said that he and others urged the company to focus on developing a better retail environment that would attract larger stores and more customers to the mall.

General Growth has hired the architectural firm Beyer Blinder Belle to draft a redesign of the mall, and Goldstein said that their plans would probably be completed by summer.

He added that the mall was likely to remain a retail destination, rather than rebuilt as a cultural or tourist attraction, as Nally fears.

"It is not like they run aquariums or recreational centers," he said of General Growth. "They run shopping malls."

Adriaan van der Plas, who has owned an art gallery at the mall for 10 years, said he looked forward to any changes that would bring a little life to the pier.

"It is a boring mall at the moment," he said. "Something needs to be done to bring in the New Yorkers. They look down at the Seaport as a place for tourists."

Nally said he was heartened to hear that retail may well remain the focus on the pier, but he added that he would believe it when he sees it.

"If that is their plan, then fine," he said. "Why don't they tell that to the tenants?"