The Real Deal New York

Suit against Goldman estate settled at 34th Street Uniqlo site: sources

February 01, 2011 06:29PM
By Adam Pincus

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31-39 West 34th Street, where Uniqlo is expected to open a store, and 19 West 34th Street, future home for Dr. Jay’s

A lawsuit brought against the estate of Sol Goldman claiming it was seeking $7
million to approve a sublease with Japanese retailer Uniqlo on West 34th Street
near Macy’s was settled last month, two sources said.

The suit was related to the expected entry of Uniqlo onto 34th Street between
Fifth and Sixth avenues.

Through its parent company, Fast Retailing, Uniqlo has negotiated with El Fassi
Realty to lease a portion of 31-39 West 34th Street, court records show. The
retailer is expected to lease the former Ann Taylor Loft portion of the first floor,
as well as the space occupied by Dr. Jay’s on the second and third floors, vacated
after El Fassi paid it more than $10 million, sources said. It was unclear how much
total space it involved.

El Fassi, controlled by investors Charles Ishay and Isaac Oved, claimed in
a suit
filed in New York State Supreme Court this past December that the Goldman estate wanted $7 million in exchange
for granting a non-disturbance agreement, court records show.

But the suit claims the Goldman estate, which owns the property, did not want
to give El Fassi, which controls the property through a long-term ground lease
through 2086, its consent. Uniqlo, owned by apparel seller Fast Retailing, needs
the non-disturbance clause to sign a lease with El Fassi, but the clause cannot be

included without the approval of the Goldman estate.

That suit was settled about two weeks ago, the industry sources said, but there
were few additional details. The settlement has not appeared in court records,
and often they never do. One of the sources said Goldman was paid $1 million, far
less than it was seeking, to give its approval for the non-disturbance agreement.
Neither El Fassi nor the Goldman estate returned calls for comment.

That was not the only payment El Fassi had to make recently to clear the way for
Uniqlo, which still has not confirmed it is taking the space.

El Fassi paid more than $10 million — and by one account $14 million — to long-time tenant at the site Dr. Jay’s to move a few doors down, two sources said. Dr.
Jay’s did not respond to requests for comment.

The urban-focused chain retailer Dr. Jay’s, which has occupied some of the first,
second and third floors of 33 West 34th Street since 1997, is moving to 19 West
34th Street next to Banana Republic, Martin Domansky, the owner and manager
of 19 West 34th Street, said.

Dr. Jay’s signed a 10-year lease late last year for about 1,700 square feet of
former Banana Republic ground-floor space, and 11,400 square feet of space on
the lower level, Domansky said.

Domansky is president of PRD Realty, which manages the building. Dr. Jay’s is
paying for the construction of its space and is expected to move in within three
months, the landlord said. Asking rents for the ground floor were about $588 per
square foot, with the asking rents about $60 per square foot in the basement,
Domansky said.

Banana Republic relinquished some of its space at 17 West 34th Street when its
lease expired and it re-signed for a smaller portion of the building, an industry
source said.

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