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Faneuil Hall Marketplace landlord gets current with back taxes after receiving threat from City Hall

Ashkenazy pays $2m to the city to avoid being found in default of its lease terms

Ashkenazy Acquisition Corp. made it clear it has no plans to walk away from the lease for Faneuil Hall Marketplace it acquired about nine years ago for $140 million.
Ashkenazy Acquisition Corp. made it clear it has no plans to walk away from the lease for Faneuil Hall Marketplace it acquired about nine years ago for $140 million.Elise Amendola/Associated Press

The company that manages the Faneuil Hall Marketplace on behalf of the city of Boston said it has paid off the $2.1 million in back taxes that it owed after the Walsh administration threatened the company with a notice of default.

Ashkenazy Acquisition Corp. issued a statement on Tuesday saying it has made all outstanding payments to the city. These are made in the form of “payments in lieu of taxes" (known as PILOTs) because of the unusual ownership structure for the famed tourism destination.

Last week, Boston Planning & Development Agency director Brian Golden had sent a notice of default to Ashkenazy. The marketplace is owned by the city, and Ashkenazy manages it through a long-term lease arrangement. City officials have been frustrated that Ashkenazy hasn’t done more to help out the small business tenants that are struggling at Faneuil Hall during the pandemic.

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An Ashkenazy spokesman disagreed with that assertion, saying in a statement that the company has been working in good faith to help the local merchants. “To help provide further relief to merchants, a component of our discussions with the City related to making adjustments to the timing of when our PILOT payment was due," the spokesman said. "Throughout the negotiations, whether or not we would make the PILOT payment was never in question. For these reasons, we were taken by surprise by the City’s latest position.”

Golden had outlined two points in which Ashkenazy was in default of its obligations, under its lease terms with the city: missing payments for two quarters and being hit with a lien from its HVAC installer, Trane, over more than $110,000 in bills.

The terms of the $10-per-year lease with the city require Ashkenazy to prevent any liens from being put on the property. The Ashkenazy spokesman said the lien has been resolved as well.

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On Tuesday night, Golden said the city is still "concerned about the small, locally-owned Faneuil Hall Marketplace tenants, and will ... work with AAC to support them during this challenging time.”

Ashkenazy made it clear in its statement that it has no plans to walk away from the lease it acquired about nine years ago for $140 million: “We will continue working with merchants independently to identify the best solutions we can that rectify outstanding rents and adjust our agreements moving forward."

The company says it has not been collecting rents nor pursuing collections since April. But tenants are worried about the accumulating back rent and want some kind of forgiveness and potentially a change to the terms of their arrangements with Ashkenazy to reflect the steep drops in revenue since reopening in July. Many of the shops and restaurants at Faneuil Hall have closed for good, exacerbating the risk to those that remain.

The Faneuil Hall Marketplace Merchants Association expressed a continued frustration with Ashkenazy’s handling of the property, saying business operators had to do basic maintenance because the real estate manager wasn’t. “The merchants have been cleaning tables and chairs to provide customers a place to sit and dine. The merchants have also had to empty trash cans and monitor the restrooms that have become a haven for the homeless and drug addicts. It is disappointing to see the property run in such disrepair.”


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.