Saturday, June 18, 2011

LOCAL NEWS: Faneuil Hall shops deal rejected

BRA says firm seeking lease hasn’t responded

The Boston Redevelopment Authority has denied a request by General Growth Properties to sell its Faneuil Hall Marketplace lease until the mall operator responds to the city’s repeated requests for information.

Peter Meade, director of the Boston Redevelopment Authority, said General Growth has refused to provide various documents related to Ashkenazy Acquisition Corp., the New York real estate firm set to take over the lease.

The requested records include Ashkenazy’s capital reserves and restrictions on those reserves, a proposed capital and maintenance plan for Faneuil Hall, pending litigation against Ashkenazy, proposals to retain and attract local merchants, plans to respond to merchants’ concerns, and the most recent financial statement for Faneuil Hall Marketplace.

“We have so little information, you can’t make an informed decision,’’ Meade said. “It’s owned by the people of the city and it’s our obligation to protect this. We weren’t looking for a dictionary here. It was seven items.’’

General Growth, based in Chicago, and Ashkenazy declined to comment. City officials’ refusal to approve the lease transfer is likely to hold up the $140 million deal recently reached between the real estate businesses.

The Globe reported last month that Ashkenazy has faced financial troubles in the past year that led lenders to repossess two shopping centers the company operated in Florida and Wisconsin.

The Tampa Port Authority filed a lawsuit last year against Ashkenazy Acquisition that accused it of owing more than $300,000 in back rent and failing to properly maintain the shopping center it leased, Channelside Bay Plaza. Ashkenazy lost control of Channelside last fall, and this spring the company had to give up its share in the Shops of Grand Avenue in Milwaukee after defaulting on a loan.

Faneuil Hall Marketplace merchants have raised concerns about the future of the historic property and urged the city to consider other buyers. The complex is owned by the city of Boston, which leases three of the four buildings to General Growth.

The company is required to give notice to the city when it transfers the lease; the Boston Redevelopment Authority has said in the past that it could halt the process if there are problems with the arrangement.

“GGP has not even permitted the merchants to meet with Ashkenazy to date, and that has raised considerable concerns about their willingness to have a dialogue with the merchants if they are permitted to manage the property,’’ said Adam Cohen, an attorney for the Faneuil Hall Merchants Association. “We commend the BRA for its diligence and its respect for the property and its merchants. We continue to hope that the property is entrusted to a local firm, such as Genesis Management Group, that appreciates the historic nature of Faneuil Hall and is committed to working with the merchants on the serious issues and financial pressures that they are facing.’’

Paul Grant, president of Genesis Management Group, one of the unsuccessful bidders for Faneuil Hall Marketplace, said his team recently told merchants and city officials it is still interested in operating the property.

Yesterday afternoon, after the BRA publicly released its denial of the lease transfer, a General Growth official told Meade that Ashkenazy could hand over requested documents if the firm chooses to do so.

“This is not the first time the city has felt GGP is nonresponsive,’’ Meade said. “Frankly, we’re hoping they provide information.’’

Boston officials are eager for a new operator at Faneuil Hall after years of battling General Growth over the direction of the marketplace and what they say is a need to put more emphasis on local businesses.

Ashkenazy president Michael Alpert, in an interview last month, would not reveal plans for Faneuil Hall except to say it will hire Jones Lang LaSalle as the local property manager.

Jenn Abelson Boston Globe June 11, 2011

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