Marketplace’s merchants say they’re owed $2m
By Erin Ailworth, Globe Staff | November 27, 2009
General Growth Properties Inc. owes the Faneuil Hall Marketplace Merchants Association more than $2 million in dues, money the retailers use to market their businesses, according to documents filed in court.
General Growth, which leases the storied marketplace from the City of Boston, in April filed for Chapter 11 bankruptcy protection in New York City. But under a 1987 settlement in federal court, the leaseholder, General Growth, must collect annual fees from Faneuil Hall Marketplace tenants - a minimum of $4.33 a square foot - and turn that money over to the merchants for promotional campaigns.
A lawyer for the merchants association said General Growth has consistently collected less money than required from some tenants, and that the shortage has left the group “hamstrung.’’
“Because we don’t have the money to market the property properly, the merchants are losing money,’’ said the attorney, Adam Cohen, who filed the claim in General Growth’s bankruptcy proceeding. “From their perspective, every dollar they spend gets people into the marketplace. If they don’t have those dollars to spend, they’re not doing what they need to do to generate foot traffic.’’
A lawyer for General Growth said he had not seen the documents the merchants group filed and could not comment. A spokesman for General Growth, a Chicago-based real estate investment trust that also owns the Natick Collection mall and other well-known properties, including South Street Seaport in Manhattan, was not available for comment.
General Growth, the second-largest mall operator in the United States, tried unsuccessfully this year to sell its Faneuil Hall lease and interests in other marquee properties to raise cash to pay off its huge debt. Its failure led to the bankruptcy filing.
The company got the lease for Faneuil Hall Marketplace - which includes the Quincy, North, and South markets - from the city in 2004. Boston owns and operates a fourth building, historic Faneuil Hall, where some of the nation’s most prominent orators have spoken.
The city, though, has long battled with General Growth over Faneuil Hall Marketplace, with the growing number of national chain stores and the declining number of local merchants being a big issue.
The Faneuil Hall merchants see the bankruptcy case as an opportunity to recoup their promotional money. With the holiday shopping season beginning, the merchants don’t have as much money as they would like for advertising and special events, they say, including money to pay for the popular street performers and holiday decorations.
“On top of having a rough economy to deal with, we’re also lacking a source of marketing funds that would help us,’’ said a retailer who asked not to be named for fear of retaliation from General Growth.
Last week, General Growth reached an agreement with lenders to restructure about $8.9 billion in debt, which the company hopes will lead to a second restructuring of about $6 billion.
The bankruptcy judge would have to approve any agreements before they could take effect.
Erin Ailworth can be reached at eailworth@globe.com.
© Copyright 2009 The New York Times Company
1 comments:
I am one of 18 South Street Seaport NY Merchants involved in an ongoing 2004 lawsuit against General in NYS Supreme Court case # 603707/04. in addition to violating leases, part of our case is the fact that GGP has 100% completely undermined our merchants Association and plundered it fund entirely. In effect we no longer have a merchants association. The by laws read that it was a corporation founded in 1985 soley for the benefit of the merchants of SS Seaport. NOT GGP OR ROUSE. Our suit was about to go to trial when GGP filed for BR and it is still pending. This was a complete theft of our fund and our suit also names the prior Faneuil Hall suits as basis. Please take a look.
Gerry Nally
Seaport Watch Co. Pier 17
swatchport@aol.com
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