Clock Ticks on Seaport Developer

General Growth Properties reportedly has until Friday to reach an agreement regarding $900 million in debt, casting further doubt on the firm’s plans to redevelop the South Street Seaport and, to a lesser extent, its plans to take part in a $700 million mixed-use development in East Harlem.

“I guess the entire community is kind of wondering where we stand,” said Councilman Alan Gerson, whose district encompasses the seaport and who has criticized General Growth’s plans, which call for a 42-story residential and hotel tower and the relocation of the historic Tin Building.

Mr. Gerson has good reason to wonder. On Tuesday morning, the Wall Street Journal’s front page ran a story detailing the Chicago developer’s growing troubles, and on Tuesday afternoon, the paper’s Web site reported that Fitch had lowered its ratings on General Growth in anticipation of a Dec. 12 default on its debt.

General Growth is also part of a partnership selected by the city in October to handle a 1.7-million-square-foot mixed-use development on East 125th Street.

Local Councilwoman Melissa Mark-Viverito said she remains confident that the project will break ground as expected in fall 2009. “I’m not concerned,” she said. “For this project, the development team is comprised of six or seven companies or organizations. … The partnership so far says that GGP is still committed to the project.”

Stephen Hayes, a spokesman for the East Harlem group, said, “The team is fully committed to the project. This is a long-term, multi-phased development, with multiple partners who have the capacity to see the project through to completion.”

General Growth reiterated on Tuesday its commitment to seeing the Seaport development through.

Clock Ticks on Seaport Developer