The much-heralded plan announced two years ago by international advertising agency Ogilvy & Mather to move from Worldwide Plaza to a former candy manufacturing plant at 636 11th Avenue has hit a rough patch, with the new landlord allegedly moving toward kicking the company out.
Ogilvy Group, a subsidiary of Dublin-based WPP Group, claims that 636 11th Avenue building owner Hakimian Organization is threatening to terminate the $600 million, 20-year lease, so the ad agency sued the ownership entity Plaza West Associates to block any eviction moves.
Ogilvy Group claims in the lawsuit filed in New York State Supreme Court Jan. 5 that Hakimian has not completed parts of agreed-to tenant improvements, leading the ad firm to claim the landlord owes as much as $50 million in rent abatements and other damages.
The ad firm alleges in the court papers that after it sought binding arbitration in October to resolve the dispute, Hakimian sent a notice Dec. 9 giving the agency until this Thursday to cure five alleged non-monetary defaults or the landlord would move to terminate the lease, but Ogilvy says it is not in default.
The Ogilvy suit is a so-called Yellowstone injunction, which is a suit to block an effort by a landlord to end a lease.
Ogilvy moved into the building at 11th Avenue between 47th and 48th streets May 26, 2009 even though certain non-specified improvements that were supposed to be completed by March 2009 were not yet finished, the court papers said.
Ogilvy declined to comment, while Hakimian did not respond to a request for comment.
The complaint values the lease at more than $600 million for the 20-year term on more than 550,000 square feet — virtually the entire building — yielding a price per foot of about $54.
It was reported in January 2008 said the asking rent per foot at Worldwide Plaza at 825 Eighth Avenue and 50th Street was about $100 per foot.