UPDATED, Jan. 30, 12:53 p.m.: The Brandt Organization, which holds a long-term sublease on land beneath One Bryant Park, is taking the Durst Organization to court over claims that the developer is attempting to mitigate its rent obligations on an unfair technicality.
According to the complaint, filed in New York State Supreme Court Monday, Durst holds that because of the state’s involvement in the development of the Bank of America Tower, many zoning restrictions were waived, and floor area in the building that would previously have been considered “bonus” area cannot now be considered “bonus” for the purposes of future rent calculations.
“The interpretation… advanced by defendant — i.e. that there is no “bonus” floor area, because the Project was built pursuant to an Empire State Development Corporation zoning override and, thus, was not subject to zoning… would give defendant a windfall, and would deprive plaintiff of a substantial portion of the rent that it bargained for in extensive negotiations,” the complaint states.
Brandt leased a plot of land in the center of the Bank of America Tower site to Durst in 2000, prior to the ESDC condemning the land in order to facilitate Durst’s project. At the time, the lease between Brandt and Durst contained a provision that stated future rent calculation would be based on a complex formula, one component of which was a percentage of any zoning floor area bonuses obtained, according to the complaint.
However, the ESDC’s interception of the land rights using eminent domain changed the game entirely.
During negotiations for the original lease, the two parties anticipated that the ESDC might condemn the land, and agreed that if and when that did happen, Durst would re-lease the land from Brandt in a “sandwich lease.” That second lease was executed in 2005, though the parties knew at the time that they could not resolve this bonus floor area issue.
Brandt and Durst agreed in 2005 to take the dispute to court eventually, and are now coming around to dealing with the contentious issue. The complaint does not estimate how much money Brandt stands to lose in rent.
“The Dursts are just unhappy with the deal they signed,” said Robert Brandt, a principal of the Brandt Organization.
Jordan Barowitz, a spokesperson for Durst, described the suit as “meaningless.”
The Brandt Organization is represented by Jeffrey Braun of Kramer Levin Naftalis & Frankel, who declined to comment for this story.
Kyna Doles contributed reporting.