Harborplace sold to New York real estate firm

General Growth, owner since 2004, has sold to Ashkenazy Acquisition Corp.

October 24, 2012|By Steve Kilar and Lorraine Mirabella, The Baltimore Sun

The Baltimore waterfront's iconic Harborplace is being sold to a New York real estate investment firm that has a reputation for purchasing distinctive retail centers, Mayor Stephanie Rawlings-Blake announced Tuesday.

Ashkenazy Acquisition Corp., which is collecting unique commercial landmarks like Faneuil Hall Marketplace in Boston, Union Station in Washington and Rivercenter in San Antonio, purchased the Inner Harbor mall from General Growth Properties, Rawlings-Blake said in a statement.

"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," she said. The city owns the land on which Harborplace sits and leases it to the mall owner.

A new owner could stoke the 32-year-old mall's nascent renaissance, spurred by the recent addition of major tenants such as Ripley's Believe It or Not Odditorium.

The sale of Harborplace comes as no surprise to city officials, given General Growth's financial woes. Since buying it in 2004, General Growth had difficulty finding the right mix of tenants to attract to both tourists and local residents. Last year, Phillips Seafood restaurant — its last original tenant — left.

David Keating, General Growth's vice president of corporate communications, would not confirm the sale, saying that the company does not "comment on the operations of any of our properties." Likewise, representatives from Ashkenazy and Christopher Schardt, Harborplace's senior general manager, did not respond to interview requests.

The mall is assessed for tax purposes at just under $38 million, but no information about the sale has been disclosed. The Wall Street Journal reported the sale will close Nov. 19, citing "people with knowledge of the talks."

The Gallery, the glass-enclosed shopping center across Pratt Street from Harborplace that is also owned by General Growth, was not mentioned in the mayor's statement as part of the sale.

On Tuesday, as unseasonably warm weather drew joggers, outdoor diners and shoppers to the brick plaza surrounding Harborplace, many of the merchants and managers said they didn't know the retail center was changing hands.

Julio Febrer, managing partner of La Tasca, said he's seen improvements in the center and his business since the Spanish tapas restaurant opened in the Pratt Street pavilion six years ago. Originally, he said, tourists made up most of the largely seasonal business.

Now, local residents account for about three-quarters of his customers, he said. He attributes the shift to new retail offerings — such as discount clothing store H&M — and to better promotion by General Growth.

"All the changes have been good," said Febrer, who said he hopes the new owner will continue "the partnership of working together to bring people to Harborplace."

The vision of Columbia founder James W. Rouse, Harborplace was built and owned by the Rouse Co., which General Growth purchased in 2004.

Chicago-based General Growth, which also owns The Mall in Columbia, Mondawmin Mall in West Baltimore, Owings Mills Mall, Towson Town Center and White Marsh Mall, has been selling off noncore assets to boost its balance sheet since emerging from bankruptcy in 2010.

General Growth sold the Village of Cross Keys, an upscale North Baltimore shopping center and one of Rouse's earliest projects, to Ashkenazy earlier this year for $25 million.

Raymond Mitchener, the owner of women's apparel store Ruth Shaw Inc., said that Ashkenazy has not made any significant changes to Cross Keys since taking over ownership of the shopping center, but he's been satisfied with the company and expects to renew his lease in December.

Mitchener's impression is that Ashkenazy has not made any major announcements about changes to Cross Keys because it still is searching out appropriate tenants for the center's empty space.

"They're very thoughtful about who they put in and what the mix is like," said Mitchener, who expects that Ashkenazy is looking for unique stores, not national chains, to put into Cross Keys.

In a New York Times interview in February, Michael S. Alpert, Ashkenazy's president and vice chairman, said the company was planning to invest about $700 million this year in property and debt acquisition.

Ashkenazy's goal is to "acquire irreplaceable properties in premier locations with the potential for significant increase in cash flow and residual value," according to the company's website.

Mark Millman, CEO of the retail executive hiring firm Millman Search Group in Owings Mills, said that Ashkenazy is not flashy and prefers to stay out of the news.

"They're very shrewd business people," Millman said. "When the timing is right, they swoop down and make a deal."

Ashkenazy, Millman said, still has a lot of work to do on renewing the infrastructure of Harborplace and filling empty space, bargaining chips they probably used to keep the price low.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.