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Harborplace sold to New York-based real estate firm

Melody Simmons//Daily Record Business Writer//October 23, 2012

Harborplace sold to New York-based real estate firm

By Melody Simmons

//Daily Record Business Writer

//October 23, 2012

Harborplace, the city’s signature 32-year-old tourism hub, is being sold to New York-based Ashkenazy Acquisition Corp. for an undisclosed price.

General Growth Properties, which acquired Harborplace as part of its November 2004 purchase of The Rouse Co., will close the deal next month, according to a memo sent to city officials by Christopher Schardt, senior general manager of Harborplace. Rouse was the original developer of Harborplace.

GGP will retain ownership of the Gallery, which sits across Pratt Street, the memo said.

Schardt could not be reached for comment.

The sale takes place nearly two years after Chicago-based GGP emerged from Chapter 11 bankruptcy protection and shed ownership and operational duties of some of its other properties including the Village of Cross Keys in Baltimore and historic Faneuil Hall in Boston — both to Ashkenazy Acquisition.

Ashkenazy also recently purchased Union Station in Washington and owns the landmark building that houses Barney’s New York at 660 Madison Ave.

Last month, the city’s Board of Estimates voted to grant GGP a 33-year lease extension with the Baltimore Development Corp., allowing it to operate the urban mall for a total of 75 more years. The new agreement increased the rent by 158 percent and called for improvements to the twin pavilions there, originally designed as a gathering place to showcase local businesses, crafts and culinary specialties.

Harborplace became a huge hit and was credited with sealing the city’s renaissance that began in 1959 with the development of Charles Center. The Inner Harbor landmark was built for $30 million on just over 3 acres of waterfront downtown that had held rotting wharfs and warehouses, where the city’s blue-collar, dock-based workforce had been centered in a bygone era.

The Harborplace project was the vision of the late Baltimore Mayor and Maryland Gov. William Donald Schaefer and today draws about 17 million tourists annually. It has been credited with sparking other redevelopment, including office towers, hotels, restaurants, the National Aquarium, Harbor East on one side and the two sports stadiums — Oriole Park at Camden Yards and M&T Bank Stadium — on the other.

But the local flavor of the development has eroded over the years as leasing costs have risen, forcing smaller businesses to move out.

Recently, retailers at Harborplace said in interviews that they deal with unique challenges of their location, such as chasing a fleeting peak business period. Business owners often gripe about what they perceive to be the city’s insistence on chasing the tourist consumer, rather than pursuing retail that would attract locals, as well.

GGP officials admitted there was a need to upgrade the image at the development in 2010 and since then have added national retail chain stores and other large-scale attractions including retailer H&M and the Bubba Gump Shrimp Co. restaurant where Phillips seafood, an original anchor tenant, was once located. Phillips moved to a new location at the Power Plant Live nearby. This June, Ripley’s Believe it or Not Odditorium opened in the Light Street Pavilion, announced by a giant green serpent installed on the façade of the building.

Joe Press, a marketing executive for Ashkenazy Acquisition, did not return calls seeking comment Tuesday.

In a Feb. 28 interview in The New York Times, Michael S. Alpert, the company’s president and vice chairman, said the business focus was centered on “major markets.”

“We’re looking for urban infill properties that are well located — so major markets. We look for long-term upside, whether it’s below-market rents or some redevelopment opportunity. We’re buying with an intention to hold and not sell — really for our kids and grandkids,” Alpert told The Times.

Mayor Stephanie Rawlings-Blake said in a statement on Tuesday that she is “committed to working closely with Ashkenazy to continue making progress and to secure Harborplace’s legacy as a source of great pride for the people of Baltimore for years to come.”

“When you look at Ashkenazy properties, such as Faneuil Hall Marketplace in Boston, Union Station in Washington, D.C., and Rivercenter in San Antonio, you see a company that could be a great fit for Harborplace,” the mayor’s statement said. “This is a company with a track record of investing in and managing premier destinations, each with its own local character, in cities across America.”

Daily Record Business Writer Alissa Gulin contributed to this article.


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