THE LANDLORD AND TENANTS at Faneuil Hall Marketplace in Boston seem to be at a standoff, with the landlord refusing tenant demands for more modifications of the existing lease agreements during the COVID-19 pandemic.
The landlord, New York City-based Ashkenazy Acquisition Corp., issued a statement saying it cannot comment on ongoing lease negotiations but is working closely with tenants “to identify solutions to maintain a vibrant business community at Faneuil Hall Marketplace through these unprecedented times.”
But Linda DeMarco, the president of the tenants association at the marketplace, said the company has verbally rejected her group’s July 10 proposal for a new rent structure with payments based on a percentage of sales rather than a fixed monthly rent. The group is also asking Ashkenazy to write off rents for April through June that the landlord earlier put in abeyance.
The tenants association also requested that all rent payments be forgiven if the market is forced to close again due to COVID and that restaurants be given the option of closing their doors from November 2020 to February 2021 without any rent being owed.
The tenants, who have seen their revenue disappear during the initial COVID-19 shutdown and rebound only slightly after a July reopening, are asking that their proposal remain in place until sales return to 90 percent of last year’s level.
According to DeMarco, Joe Press, a senior vice president at Ashkenazy, told her group in a Zoom meeting that its members would be receiving no more breaks on their rent. DeMarco also said Press repeated a statement he had made earlier, that it would be cheaper for Ashkenazy to operate the property without them.
Under existing state law and administrative orders, landlords are barred from evicting tenants until mid-October.
DeMarco said she told Press his company is doing a poor job cleaning the property and that there is a serious lack of security on the premises. “We’re cleaning our own tables, mopping the hallways, and even policing the property ourselves,” she said. “When I brought this up to Joe Press at our meeting, there was dead silence. He didn’t have a comeback.”
The Faneuil Hall Marketplace is owned by the Boston Planning & Development Agency, but Ashkenazy manages the property and functions as the landlord. The company, which purchased the management rights for $140 million in 2011, has a reputation for playing hardball with its tenants here and elsewhere.
Under the terms of a 99-year lease that expires 55 years from now, Ashkenazy pockets all the rent paid by the marketplace tenants. Ashkenazy pays the Boston Planning & Development Agency $10 a year in rent and makes an annual payment in lieu of taxes to the city of Boston, which this year amounts to $4.2 million.
Boston Mayor Marty Walsh issued a statement saying now is a challenging time for many of Boston’s small businesses, especially for those located at major tourist destinations such as Faneuil Hall Marketplace. “While I recognize that Ashkenazy has provided the merchants with some relief, more relief is needed,” he said. “I continue to call on Ashkenazy to work with and support these businesses during this time.”
Brian Golden, the head of the Boston Planning & Development Agency, is urging Ashkenazy to help businesses at the marketplace that are struggling to survive.
“Because the 1975 lease reserved so little authority for the BPDA, we don’t have the power to dictate the outcomes we seek,” Golden said. “But we continue to communicate with Ashkenazy to make the case that it’s in the city’s interest, the merchants’ interests, and Ashkenazy’s interest that we take aggressive steps to save the things that make Faneuil Hall Marketplace special.”
DeMarco said the situation looks bleak. “What the Ashkenazy company is doing is very troubling to say the least,” she said. “That’s all they care about is their bottom line. I mean there are landlords throughout the country, including in our very own city, who understand what their tenants are going through financially. They have a heart. These guys not at all.”