XML 38 R8.htm IDEA: XBRL DOCUMENT

Investments in Unconsolidated Ventures

12 Months Ended

Dec. 31, 2024

Investments in Unconsolidated Ventures

Investments in Unconsolidated Ventures

2.	Investments in Unconsolidated Ventures

In the normal course of business, the Company enters into partnerships and ventures with an emphasis on investments associated with businesses that operate at the Company’s real estate assets and other hospitality and entertainment-related investments. The Company does not consolidate the investments in the periods presented below as it does not have a controlling financial interest in these ventures. As such, the Company primarily reports its interests in accordance with the equity method. Additionally, the Company evaluates its equity method investments for significance in accordance with Regulation S-X, Rule 3-09 and Regulation S-X, Rule 4-08(g) and presents separate annual financial statements or summarized financial information, respectively, as required by those rules.

Investments in unconsolidated ventures consist of the following:


		Ownership Interest ^(a)				Carrying Value						Share of Earnings (Losses)/ Dividends
		December 31,		December 31,		December 31,			December 31,			Year Ended December 31,
in thousands except percentages		2024		2023		2024			2023			2024			2023			2022
Equity Method Investments
The Lawn Club ^(b)		50	%	50	%	$	6,103		$	1,266		$	542		$	(1,287)		$	—
Ssäm Bar ^{(b) (c) (d) (f)}		—	%	50	%		—			—			181			(5,981)			(783)
Tin Building by Jean-Georges ^{(b) (d) (f)}		65	%	65	%		7,746			11,658			(33,362)			(42,698)			(36,813)
Jean-Georges Restaurants ^(f)		25	%	25	%		14,477			14,535			(9,932)			(30,667)			472
							28,326			27,459			(42,571)			(80,633)			(37,124)
Other equity investments ^(e)							—			10,000			—			—			—
Investments in unconsolidated ventures						$	28,326		$	37,459		$	(42,571)		$	(80,633)		$	(37,124)

(a)	Ownership interests presented reflect the Company’s stated ownership interest or if applicable, the Company’s final profit-sharing interest after receipt of any preferred returns based on the venture’s distribution priorities.

(b)

For these equity method investments, various provisions in the venture operating agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and preferred returns may result in the Company’s economic interest differing from its stated interest or final profit-sharing interest. For these investments, the Company recognizes income or loss based on the venture’s distribution priorities, which could fluctuate over time and may be different from its stated ownership or final profit-sharing interest.

(c)	The Ssäm Bar joint venture was liquidated in May 2024. Refer to discussion below for additional details.

(d)	Classified as a VIE; however, the Company is not the primary beneficiary and accounts for its investment in accordance with the equity method. Refer to discussion below for additional information.

(e)	Other equity investments represent investments not accounted for under the equity method. The Company elected the measurement alternative as this investment does not have readily determinable fair value. Refer to discussion below for additional detail.

(f)	These investments were impaired as part of the Seaport impairment recognized in 2023. Refer to specific investment discussion below and Note 3 – Impairment for additional information.

The Lawn Club

In 2021, the Company formed HHC Lawn Games, LLC with The Lawn Club NYC, LLC (“Endorphin Ventures”), to construct and operate an immersive indoor and outdoor restaurant that includes an extensive area of indoor grass, a stylish clubhouse bar, and a wide variety of lawn games. This concept opened in the fourth quarter of 2023. Under the terms of the initial agreement, the Company funded 80% of the cost to construct the restaurant, and Endorphin Ventures contributed the remaining 20%. In October 2023, the members executed an amended LLC agreement, in which the Company will fund

90% of any remaining capital requirements, and Endorphin Ventures will contribute 10%. The Company recognizes its share of income or loss based on the joint venture distribution priorities, which could fluctuate over time. Upon the return of each member’s contributed capital and a preferred return to the Company, distributions and recognition of income or loss will be allocated to the Company based on its final profit-sharing interest. The Company also entered into a lease agreement with HHC Lawn Games, LLC pursuant to which the Company agreed to lease approximately 27,000 square feet of the Fulton Market Building to this venture.

Ssäm Bar

In 2016, the Company formed Pier 17 Restaurant C101, LLC (“Ssäm Bar”) with MomoPier, LLC (“Momofuku”) to construct and operate a restaurant and bar at Pier 17 in the Seaport, which opened in 2019. The Company recognized its share of income or loss based on the joint venture’s distribution priorities, which could fluctuate over time. The Ssäm Bar restaurant closed during the third quarter of 2023, and the venture was liquidated in May 2024. The Company received a liquidating distribution of its share of the venture’s remaining assets during the third quarter of 2024. Additionally, the Company recognized an impairment of $5.0 million related to this investment in the year ended December 31, 2023. See Note 3 – Impairment for additional information.

Tin Building by Jean-Georges

In 2015, the Company, together with VS-Fulton Seafood Market, LLC (“Fulton Partner”), formed Fulton Seafood Market, LLC (“Tin Building by Jean-Georges”) to operate a 53,783 square foot culinary marketplace in the historic Tin Building. The Fulton Partner is a wholly owned subsidiary of Jean-Georges Restaurants. The Company purchased a 25% interest in Jean-George Restaurants in March 2022 as discussed below.

The Company owns 100% of the Tin Building and leased 100% of the space to the Tin Building by Jean-Georges joint venture. Throughout this information statement, references to the Tin Building relate to the Company’s 100% owned landlord operations and references to the Tin Building by Jean-Georges refer to the hospitality business in which the Company has an equity ownership interest. The Company, as landlord, funded 100% of the development and construction of the Tin Building. Under the terms of the Tin Building by Jean-Georges LLC agreement, the Company contributes the cash necessary to fund pre-opening, opening and operating costs of the Tin Building by Jean-Georges. The Fulton Partner is not required to make any capital contributions. The Tin Building was completed and placed in service during the third quarter of 2022 and the Tin Building by Jean-Georges culinary marketplace began operations in the third quarter of 2022. Based on capital contribution and distribution provisions for the Tin Building by Jean-Georges, the Company currently receives substantially all of the economic interest in the venture. Upon return of the Company’s contributed capital and a preferred return to the Company, distribution and recognition of income or loss will be allocated to the Company based on its final profit-sharing interest.

As of December 31, 2024 and 2023, the Tin Building by Jean-Georges is classified as a VIE because the equity holders, as a group, lack the characteristics of a controlling financial interest. As of January 1, 2025, in conjunction with the internalization of food and beverage operations, the Company, through employing the management team personnel and directing the operating activities that most significantly impact the VIE’s economic performance, became the primary beneficiary of the VIE. Refer to Note 15 – Subsequent Events for additional information. As the Company is unable to quantify the maximum amount of additional capital contributions that may be funded in the future associated with this investment, the Company’s maximum exposure to loss is currently equal to the $7.7 million carrying value of the investment as of December 31, 2024. The Company funded capital contributions of $29.4 million, $48.1 million and $43.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recognized an impairment of $1.2 million related to this investment in the year ended December 31, 2023. See Note 3 – Impairment for additional information.

The Company is required to file audited financial statements of the Fulton Seafood Market, LLC for the years ended December 31, 2024 and 2022. The Company’s investment in the Fulton Seafood Market, LLC does not meet the threshold necessary for disclosure of audited financial statements in 2023, however for comparability, audited financial statements

of Fulton Seafood Market, LLC for the years ended December 31, 2024, 2023, and 2022 are attached as exhibits to this Annual Report.

Jean-Georges Restaurants

In March 2022, the Company acquired a 25% interest in JG Restaurant HoldCo LLC (“Jean-Georges Restaurants”) for $45.0 million from JG TopCo LLC (“Jean-Georges”). Jean-Georges Restaurants currently has over 60 hospitality offerings and a pipeline of new concepts. The Company accounts for its ownership interest in accordance with the equity method and recorded its initial investment at cost, inclusive of legal fees and transaction costs. Under the terms of the current operating agreement, all cash distributions and the recognition of income-producing activities will be pro rata based on stated ownership interest. The Company recognized an impairment of $30.8 million related to this investment in the year ended December 31, 2023. See Note 3 – Impairment for additional information.

Concurrent with the Company’s acquisition of the 25% interest in Jean-Georges Restaurants, the Company entered into a warrant agreement with Jean-Georges. The Company paid $10.0 million for the option to acquire up to an additional 20% interest in Jean-Georges Restaurants at a fixed exercise price per share subject to certain anti-dilution provisions. Should the warrant agreement be exercised by the Company, the $10.0 million will be credited against the aggregate exercise price of the warrants. Per the warrant agreement, the $10.0 million is to be used for working capital of Jean-Georges Restaurants. The Company elected the measurement alternative for this purchase option as the equity security does not have a readily determinable fair value. As such, the investment is measured at cost, less any identified impairment charges. The warrant became exercisable on March 2, 2022, subject to automatic exercise in the event of dissolution or liquidation and will expire on March 2, 2026. During the year ended December 31, 2024, the Company recognized an impairment of $10.0 million related to this warrant. See Note 3 – Impairment for additional information.

Creative Culinary Management Company, LLC (“CCMC”), a wholly owned subsidiary of Jean-Georges Restaurants, provides management services for certain retail and food and beverage businesses that the Company owns, either wholly or through partnerships with third parties. Pursuant to the various management agreements, CCMC is responsible for employment and supervision of all employees providing services for the food and beverage operations and restaurant as well as the day-to-day operations and accounting for the food and beverage operations.

On January 1, 2025, as the Company’s initial step to internalize food and beverage operations at most of its wholly owned and joint venture-owned restaurants at the Seaport, we hired and onboarded employees of CCMC, and entered into a shared services agreement with CCMC. For additional details regarding the shared services agreement, See Note 15 – Subsequent Events.

Summarized Financial Information The following tables provide combined summarized financial statements information for the Company’s unconsolidated ventures. Financial statements information is included for each investment for all periods in which the Company’s ownership interest was accounted for as an equity method investment.


		December 31,			December 31,
in thousands		2024			2023
Balance Sheet
Total Assets		$	155,523		$	174,283
Total Liabilities			125,623			142,539
Total Equity			29,900			31,744
Non-Controlling Interest		$	(1,105)		$	(697)


		Year Ended December 31,
in thousands		2024			2023			2022
Income Statement
Revenues		$	123,257		$	118,674		$	81,275
Operating Loss			(3,961)			(39,196)			(24,754)
Net Income (loss)			(31,252)			(43,798)			(36,350)
Net loss attributable to the Controlling Interest		$	(30,844)		$	(43,264)		$	(36,261)

3.