Faneuil Hall merchants, who have not always been happy with how the Boston shopping mecca has been managed, expressed concern about a possible change in control. Simon Property Group, the mall giant with 14 Massachusetts properties, launched a $10 billion hostile bid for General Growth Properties, the bankrupt operator of Faneuil Hall Marketplace.
“The shop owners are worried that any new owner understand Faneuil Hall’s vision and why it was given a generous 99-year lease,” said Carol Troxell of the Faneuil Hall Merchants Association.
Troxell, who runs several food shops including Maggie’s Sweets, said the long-term lease was meant to provide a home for small, local entrepreneurs in New England. But Faneuil Hall has been flooded with national chains.
Last year, after Chicago-based General Growth filed for bankruptcy, the merchants created “Friends of Faneuil Hall” and started raising money in a bid to take control of the operation. Troxell said yesterday that the group now has $30 million in pledges.
The city of Boston, which owns the property and leases Faneuil Hall Marketplace’s three retail buildings, has criticized General Growth’s maintenance record.
John Palmieri, director of the Boston Redevelopment Authority, said whoever operates the property must preserve its character.
“They would need to maintain a healthy mix of retailers and do the improvements to continue to be attractive to the public,” he said.
The takeover bid by Indianapolis-based Simon, the nation’s largest shopping mall owner, would allow No. 2 General Growth to emerge from Chapter 11 bankruptcy protection.
But General Growth called the offer too low and said it will invite others to make bids as it considers options for emerging from bankruptcy.
“Given what this is going to give Simon, they can afford to pay more,” said William Acheson, equity analyst at New York-based Benchmark Co. “They will have a lock on the best malls in the best markets in Boston, New York and some of the bigger California cities.”
General Growth filed the biggest real-estate bankruptcy in U.S. history in April after buckling under the weight of billions in accumulated debt during a massive expansion effort fueled by cheap credit.
By Thomas Grillo for Boston Herald February 17, 2010