Seaport Manfred Drops Port Hotel Plan : $15-Million Manchester Option Periled
Seaport Manfred Co., Inc. has pulled out of a controversial $15-million deal to buy developer Douglas Manchester’s option to build a third waterfront hotel that was strongly opposed by Mayor Maureen O’Connor.
Port District Director Donald Nay said that Seaport Manfred officials notified the Port Commission on Friday that they were pulling out of the deal because the commission failed to meet a Jan. 21 deadline agreed to by Seaport Manfred and Manchester to approve the sale. Nay said that Seaport Manfred officials withdrew $1 million that they had in an escrow account as a down payment to Manchester.
Although Seaport Manfred mentioned the port’s failure to meet the deadline as the company’s reason for withdrawing its offer, it was Manchester who asked the Port Commission on Jan. 20 to delay a decision on the sale until Feb. 10.
O’Connor had opposed the sale, arguing that Manchester, who bought the option for $100, stood to make a windfall profit from public land. Manchester received the option for the 4.75-acre parcel from the Port District in 1983. In exchange, Manchester agreed to build the twin-tower Hotel Inter-Continental on the waterfront and give the port 12 acres adjacent to the hotel on which to build the convention center.
“Seaport Manfred officials just came out and told me that the port failed to meet the deadline, so they were going to close out the escrow account,” said Nay.
According to Nay, the Port Commission was also wary of the agreement because “officials didn’t think it was a good deal.” Nay did not mention O’Connor’s criticism of the proposed transaction, but he said that the deal between Seaport Manfred and Manchester also included details that were unacceptable to the Port District.
“There were a number of things that didn’t sit well with the port. . . . The deal called on the port to buy Santa Fe property and realign Harbor Drive. The board was simply not prepared to do that and other things,” said Nay, who would not elaborate further.
Seaport Manfred’s pull-out from the agreement with Manchester did not come as a surprise. On Jan. 20, the day that Manchester asked Port District officials to postpone a decision on the sale plan, an attorney said that the company would have to reevaluate its plan to buy the option from Manchester.
An earlier agreement between Manchester and Seaport Manfred also fell apart late last year, when a Dec. 17, 1986, deadline was not met. However, both parties negotiated another agreement with a Jan. 21 deadline, and Manchester’s attorney had expressed optimism that a new agreement could still be worked out despite the failure to meet the new deadline.
Even if the Port District had approved the agreement between Manchester and Seaport Manfred, the project was still embroiled in other legal controversies. The Hyatt Corp. was supposed to manage the hotel that was to be built by Seaport Manfred, and also had to approve the sale to Seaport Manfred.
Attorneys for Hyatt had threatened to derail the sale unless Manchester withdrew a 1986 lawsuit aimed at preventing Hyatt from managing the new hotel.
