Harry Macklowe sues Boston Properties for $30M
Developer claims he’s owed a consulting fee for 510 Madison Ave
Whoever said real estate is a litigious industry likely had Harry Macklowe in mind.
The octogenarian real estate mogul, who reportedly skipped rent payments this summer for his pricey office at the General Motors Building, is suing his landlord at another property for $30 million.
Macklowe claims Boston Properties owes him a consulting fee related to a Midtown office tower he sold to the REIT 10 years ago in the wake of the Great Recession, according to a lawsuit filed Monday in New York State Supreme Court.
Representatives for Macklowe and Boston Properties did not immediately respond to a request for comment.
Back in 2010, Macklowe sold the 30-story office building at 510 Madison Avenue to Mort Zuckerman’s Boston Properties for nearly $275 million.
Macklowe, who had just finished constructing the 350,000-square-foot building at Madison Avenue and East 53rd Street, was fending off a legal battle for control of the property with lenders SL Green Realty and O’Connor Capital Partners.
That was when Boston Properties swooped in and bought the mezzanine debt on the building. The REIT and Macklowe already had a relationship stemming from the sale of the GM Building two years earlier. The two firms cut a deal where Boston Properties agreed to keep Macklowe on as a project consultant and co-chairman of the building’s marketing and leasing advisory committee.
In the lawsuit, Macklowe claims the agreement is due to expire this year, and that Boston Properties has never made any of the payments, despite the fact that the tower has been a financial success. When he asked to inspect the company’s books to see if he met the performance thresholds to trigger the fee, he was told that Boston Properties won’t hand over the records until the Covid-19 crisis has subsided.
Macklowe claims that’s an act of “bad faith because the property’s books and records can be transmitted electronically” so that there’s no need for him to physically go to Boston Properties’ office. He’s now asking the court to grant him more than $30 million.
The lawsuit isn’t the only scuffle between the two. Macklowe reportedly racked up a bill for missed rent payments earlier this year for his $200,000 per month office on the 28th floor of the GM Building. Boston Properties allowed Macklowe to keep a piece of that property when it acquired the building for $2.9 billion in 2008, when Macklowe was struggling to maintain control of his real estate empire.
A source opined to the New York Post over the summer that Boston Properties “saved him and gave him a sweetheart deal and this is how he behaves?”