City issues ultimatum to Faneuil Hall Marketplace

(File photo: John Tlumacki/Globe staff)

The Boston Redevelopment Authority is accusing General Growth Properties of defaulting on several provisions in its lease at Faneuil Hall Marketplace and demanding the company meet its obligations within 30 days.

Otherwise, General Growth, which is trying to sell the lease to pay off its debt, will be in default, according to a copy of the letter obtained by the Globe.

The city of Boston owns Faneuil Hall Marketplace and leases it to General Growth, a real estate investment trust that manages and develops retail properties.

Over the past year, General Growth has failed to properly maintain the marketplace in accordance with the lease, including inadequate lighting, security staffing, snow removal, and leak repairs, according to the March 3 letter from BRA director John Palmieri. Marketplace tenants were the victims of at least two armed robberies in December, and a customer was allegedly injured in a fall because of inadequate snow removal.

The Chicago real estate investment trust, which also owns Natick Collection, also has violated the lease by failing to provide the city proof of general public liability insurance, and other insurance requirements.

The letter, addressed to General Growth's interim chief executive officer, Adam Metz, and the company's senior vice president of asset management, Sharon M. Polonia, also accuses General Growth of not complying with transfer and ownership provisions in the lease.

"If the Lesee does not deliver the sworn statements and written assurances described above, the Authority shall treat such failure as an Event of Default," according to the letter.

A spokesman for General Growth declined comment.

"We're pleased that the city has taken a proactive position. The city recognizes what GGP is allowing to happen to the property and the city wants to preserve one of the crown jewels in its possession," said Adam Cohen, a lawyer representing the Faneuil Hall Merchants Association. "The merchants are very concerned, and the city has taken notice."

To read a recent Globe story about Faneuil Hall Marketplace, please click here.
(By Jenn Abelson, Globe staff)