By Julie Shapiro
DNAinfo Reporter/Producer
BATTERY PARK CITY — A battle over rents at the World Financial Center is costing Brookfield Properties and the Battery Park City Authority millions of dollars.
Brookfield lost the first round of the fight two years ago and had to pay the authority about $25 million.
Now, the public authority is seeking another $4 million to $6.75 million from the real estate giant.
Brookfield owns the World Financial Center, an 8 million-square-foot complex of four office towers, retail and public space, but the Battery Park City Authority owns the land beneath it. A complicated lease agreement requires Brookfield to pay a percentage of its revenue to the authority each year.
The current dispute relates to One World Financial Center, the southernmost office tower. Shortly after 9/11, Lehman Brothers broke its lease in that tower and moved out. Lehman paid Brookfield a large lump sum to make up for breaking the lease, Cavanaugh said.
But rather than reporting that lump sum with its annual revenue, Brookfield wanted to spread the money over many years in its financial statements, reducing the amount the authority would receive, said BPCA president Jim Cavanaugh.
“Brookfield took it in on their own books as revenue,” said Sandy Altman, the authority’s chief counsel. “But when it came time to giving us a piece of the action, they [stretched] it over the term of the lease.”
Altman said she was surprised by how hard Brookfield was fighting, especially after losing the previous dispute, which involved percentage payments at Two and Four World Financial Center.
As in the previous case, a panel of three arbiters is weighing the evidence and will issue a binding decision. Altman likened the legal preparations to a trial.
A Brookfield spokeswoman declined to comment.
