City OK’s new operator for Faneuil Hall Marketplace

By Johnny Diaz, Globe Staff

The city has cleared the way for a new operator of Faneuil Hall Marketplace, after intially rejecting a deal over questions about the financial condition of the prospective leaseholder.

The Boston Redevelopment Authority said today that it approved a request by General Growth Properties to sell its Fanueil Hall Marketplace lease to Ashkenazy Acquisition Corp, a New York real estate firm.

The approval comes after the BRA had publicly rejected General Growth Properties’s request for a lease transfer because the company had refused to provide documents related to Ashkenazy last summer.

Those documents included Ashkenazy’s capital reserves, proposed capital, and maintenance plan for Faneuil Hall and plans to respond to merchant’s concerns.

Officials at the BRA said that the approval came after the city met with Ashkenazy officials and reviewed the company’s financials and improvement plans for the marketplace.

“We’ve had a number of meetings with Ashkenazy and they have provided us with documents that we viewed in terms of having the capability and the financial wherewithal to invest in the marketplace and maintain the asset,’’ said Susan Elsbree, a spokeswoman for the BRA, which owns the marketplace. The facility includes Quincy Market, North Market, and South Market.

Ashkenazy had also met with Faneuil Hall Marketplace Merchants Association to establish a good working relationship.

“Our merchants, artisans, pushcart vendors, and well-known retailers provide a variety of local gifts and specialty items and create an engaging and exciting atmosphere at one of Boston’s most unique landmarks,’’ said Boston mayor Thomas M. Menino in a statement.

The 1974 lease agreement states that the BRA must approve any new leaseholder of Faneuil Hall. General Growth took over the lease in 2004 from The Rouse Company, which had held the lease since 1975. City officials said Rouse helped reinvigorate the marketplace, which had been targeted for demolition. The property is one of the station’s biggest tourist attractions.

The 6.5 acre historic property includes 49 shops, 18 restaurants and pubs, and 44 push carts. The lease runs through 2074.

An official from Ashkenazy could not be reached immediately this afternoon.

In June, the Boston Redevelopment Authority, the city’s planning agency, denied a request by General Growth Properties to sell its Faneuil Hall Marketplace lease until it responded to the city’s repeated requests for information related to Ashkenazy, which is based in New York.

Ashkenazy had faced financial troubles in the past year that led lenders to repossess two shopping centers the company operated in Florida and Wisconsin.

Its concerns over the Faneuil Hall Marketplace lease sale have now been addressed, the BRA said, after Ashkenazy gave assurances to the city and to the Faneuil Hall Marketplace Merchants Association. The city’s approval comes after an extensive city-led review of the company’s financial standing and its capital improvement plans for the marketplace, Menino’s office said in a press release.  

“My number one priority is to support the merchants of Faneuil Hall Marketplace,” Menino said in a statement.

Faneuil Hall Marketplace, which includes Quincy Market, North Market, and South Market is owned by the BRA. In 2004, General Growth assumed the existing long-term lease for the property’s management from the Rouse Co.  Recently, amid bankruptcy concerns, General Growth sought to sell its interest in the lease. Under a 1974 lease agreement, the BRA must approve any new leaseholder of the marketplace. 

According to the BRA, there are 49 shops, 18 restaurants and pubs, 35 Colonnade eateries, and 44 push carts in the marketplace, which attracts 18 million visitors a year.