A new landlord is taking over Faneuil Hall Marketplace, raising hopes at City Hall that long-awaited improvements could be finally coming to a high-profile tourism destination that draws millions of visitors every year.
The real estate arm of investment conglomerate J. Safra Group announced on Monday night that it is acquiring the Marketplace from Ashkenazy Acquisition Corp., which has held the property’s long-term lease with the city for the past 13 years. J. Safra Real Estate said in a statement that the company is looking forward to working with city officials to “continue the excitement, pride, and success of this world-class destination.”
Ashkenazy originally acquired the lease for the retail-and-office complex in 2011, in a deal valued at $140 million. But since then the landlord has, at times, warred with merchants over competing visions for the marketplace and what they perceive to be an underinvestment in the property. City officials have worried about the need for physical improvements as well, and have stepped up the pressure on Ashkenazy, including by pointing out nearly $45 million in repairs. New York-based Ashkenazy has also been criticized over the years for failing to curate a locally focused experience, and instead bringing in out-of-state chains to help fill the shops.
J. Safra Real Estate, which holds more than 200 properties around the world, declined to disclose the financial terms of the deal or to comment beyond the company’s press release. City officials, though, described the new landlord as one of Ashkenazy’s lenders, and Safra’s announcement notes that the firm sometimes has partnered with Ashkenazy.
Mayor Michelle Wu, whose fifth floor office in City Hall overlooks Faneuil Hall, hailed the arrival of the new landlord as a pivotal, positive moment for the marketplace complex. Shaping up Faneuil Hall Marketplace was one of the many pieces of a downtown revitalization plan that the Wu administration crafted in 2022.
In an interview, Wu said she has been particularly disappointed by the onslaught of national brand names.
“I look at the area every single day, right out my window, and it’s painful sometimes,” Wu said. “Often, [Faneuil Hall] is the first experience that people from around the world have of Boston, and we have the potential to showcase the talent, the diversity, and local flair of more of our own small businesses and entrepreneurs.”
The roughly 365,000-square-foot complex includes Quincy Market, the North Market building, the South Market building, and an outbuilding with a Sephora cosmetics store. Faneuil Hall, the marketplace’s adjacent namesake, is in fact not part of the property.
The long-term lease arrangement with the city dates back to the mid-1970s. At the time, the remodeling that took place to turn the area into a tourism destination was hailed as an urban renewal success story.
But concerns have arisen under Ashkenazy’s watch around the upkeep of the marketplace’s buildings and courtyards, and about the gradual shift in tenant mix away from locally owned shops to an “Anywhere USA” feel, with recent additions including a Build-A-Bear shop and an outpost of the Jimmy Buffett-themed Margaritaville restaurant chain. City officials have been somewhat hamstrung by the terms of the original lease, which expires in 2074 and gave Ashkenazy rights to operate the place for $10 a year, although they have tried to apply pressure at various points. Ashkenazy also makes annual payments in lieu of taxes to the city, a figure that totaled $2.1 million in the most recent fiscal year.
Arthur Jemison, director of the Boston Planning & Development Agency, said the Safra deal follows a “series of really frank conversations” his team has had with Ashkenazy about the need to make some big improvements at the site. Jemison said he is encouraged by discussions Safra has had with BPDA that the new landlord will be more amenable to working with city officials than Ashkenazy has been. A consultant’s report for the BPDA identified nearly $45 million in repairs and upgrades in 2021 — everything from addressing loose bricks and cracked granite to installing handrails and new electrical equipment.
“After years of working [on this issue], we feel like we’re on the brink of significant change,” Jemison said. “We’ve been driving a conversation with AAC to highlight the lack of investment. This action that’s being taken by AAC and their lender, we think it’s a sign that our hard work with them is coming to fruition.”
Word that Ashkenazy was about to be replaced had already started to circulate downtown. Michael Nichols, president of the Downtown Boston Business Improvement District, said his organization welcomes the news.
“It really felt like they were an absentee landlord for the site, one of Boston’s crown jewels,” Nichols said. “[Ashkenazy] took what was easy from the space, and out of the space, without trying to make it more compelling and more contemporary for how audiences, even before the pandemic, were engaging in the downtown.”
Ben Starr, a partner at brokerage Atlantic Retail, said fixing Faneuil Hall Marketplace won’t be easy. He described it as a “Rubik’s Cube of a challenge” made more difficult by the fact that foot traffic from office workers in the broader downtown hasn’t bounced back to pre-pandemic levels. Wu’s predecessors were unable to solve the situation, Starr said, and it’s unfair to expect the Wu administration to quickly figure it out given downtown’s weakened state. A landlord change does present another opportunity for city officials to chime in, he said, but that doesn’t change the fact that the new landlord is neither a nonprofit nor a philanthropy.
That said, many merchants remain hopeful that a new owner will mean a new influx of funds and ideas, said Anthony Bistany, vice president of the Faneuil Hall Marketplace Merchants’ Association.
“We’re excited,” said Bistany, whose father owns West End Strollers and Steve’s Greek Cuisine. “I think they’re going to ... improve upon what I think is still the best location in the city. I think any type of investment in the property would go a long way.”
To Joseph O’Malley, who served as Faneuil Hall Marketplace’s general manager from 2016 through 2022, the historic property has the potential to help revitalize the entire downtown area.
“It could be that special place that Boston once looked to, to anchor everything down there,” said O’Malley, now a real estate consultant. “If there was a shot of life in Faneuil Hall, I think that spreads throughout the rest of downtown and helps with downtown retail vacancies. ... It could be the nicest, most beautiful place in the city.”