Tourists walk through Faneuil Hall Marketplace in June 2022. iStock photo / File

After butting heads for years with the real estate investor that managed downtown Boston’s landmark Faneuil Hall Marketplace, a top city official says the lease’s sale, announced yesterday, will lead to significant investments in the property.

“We’re feeling more optimistic than we have in some time,” Boston Planning & Development Agency Director Arthur Jemison said.

J. Safra Group, an international banking conglomerate, announced Tuesday it planned to buy Ashkenazy Acquisition Corp.’s lease of the city-owned Faneuil Hall Marketplace. One of the J. Safra Group’s constituent banks, Safra National Bank of New York, had issued a $70 million mortgage to Ashkenazy for the retail property in 2015, according to documents filed in the Suffolk Registry of Deeds.

Ashkenazy had bought the 99-year lease, originally signed by the city in 1974, from the previous operator in 2011 for $136 million.

While Mayor Michelle Wu had criticized Ashkenazy for bringing in more national credit tenants instead of local businesses, the city’s clashes with Ashkenazy date back over three mayors and two BPDA directors. Former BPDA head Brian Golden sought to intervene in a dispute between Ashkenazy and retail tenants in 2020 who said they weren’t being given rent relief during the early stages of the pandemic when tourism and most indoor shopping and dining had collapsed. The agency compiled an extensive report in 2021 that alleged the company was sitting on around $40 million in deferred maintenance, from unstable sidewalk bricks to transformers needing replacing and masonry in need of repointing.

It was that deferred maintenance, Jemison said, that gave the city leverage to encourage Ashkenazy to sell based on a clause in the contract that required the Faneiul Hall Marketplace operator to maintain the historic structures.

“We told them that if they weren’t going to make an investment we were going to retain all our rights under the lease,” he said.

An Ashkenazy spokesperson declined a request for comment by publication time, but Safra’s press release announcing the sale included a quote from Ashkenazy COO Joe Press: “It has been our honor and privilege to have served Faneuil Hall Marketplace, the City of Boston, and the millions of visitors who have enjoyed their experiences at this historic asset.”

Jemison said that the amount of capital Safra has at its disposal and its decision to allocate the asset to a subsidiary – J. Safra Real Estate – that also manages other trophy properties around the world is giving the administration confidence that the new Faneuil Hall Marketplace operator will put money into the property.

“Quincy Market is the first experience that many 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. This is an opportunity to create a more vibrant and welcoming space for residents and visitors, while supporting the vitality of Downtown Boston,” Wu said in a statement released by her office Tuesday.