The Real Deal New York

Macklowe versus tenant at 510 Madison

April 03, 2009 03:50PM
By David Jones

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 Harry Macklowe (left) and 510 Madison Avenue

Harry Macklowe’s Macklowe Properties is embroiled in a court battle with investment firm Jay Goldman & Co., in a dispute over whether the tenant defaulted on its lease at 510 Madison Avenue, or is being locked out of the speculative office tower.

In a February lawsuit filed in New York State Supreme Court, Jay Goldman officials allege breach of contract and asked for an injunction to prevent Macklowe from terminating the lease.

As The Real Deal previously reported, Macklowe signed Jay Goldman, one of the city’s largest hedge funds, to a lease estimated at 10 years at $125 per square foot, in December 2007.

The suit alleges that the landlord sent the investment firm a notice on Jan. 20, demanding it “cure” a violation of the lease. According to the suit, the tenant was issued a notice for not paying $132,700 for the first month’s rent nor countersigning a floor designation notice. The notice says that the tenant could default on its lease if it failed to respond by Jan. 25.

Jay Goldman officials claim in the suit that they were not required to respond. In addition, they said there is no provision in the master lease that requires the plaintiff to countersign anything. In court filings, Jay Goldman officials said the lease does not require its signature and that the required fire alarms, sprinkler systems and other additions were not completed in the building.

Jay Goldman officials also claim that they were denied access to the building after a February fire, and that the space was rendered “untenant-able” after the fire.

However, Richard Claman, attorney for Macklowe, argues that the lease called for Jay Goldman to pay to build out its office space, and the landlord would provide $400,000 to cover the costs. In the court filing, Claman questions whether those issues are just cause for a tenant getting cold feet because of the economy.

Daniel Ansell, the original attorney for Jay Goldman, declined to comment.

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