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Con Ed and Park51 Community Center Locked in $1.7 Million Rent Fight

By Tom Liddy | October 16, 2011 7:47pm
Park51 operates an interfaith community center on the first floor of 45 Park Place (at right), next to the building in dispute (left).
Park51 operates an interfaith community center on the first floor of 45 Park Place (at right), next to the building in dispute (left).
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Pete Davies

MANHATTAN — Con Ed and the developers of the much-debated Park51 Community Center are locked in a dispute over nearly $2 million in back rent, according to court documents.

As a result, the utility has threatened to terminate the lease for Park51 — the site of a controversial planned mosque in Lower Manhattan — if the money is not paid, the documents say.

Con Ed "has issued a wrongful and illegal threat to terminate Plaintiff's valuable, commercial leasehold as early as October 4, 2011," according to the papers, first reported by the New York Post. The documents are part of a lawsuit filed on Oct. 3 by 51 Park Place LH seeking to stop a massive rent hike that is responsible for the money that is owed. 

Park51, and its lead developer Sharif El-Gamal, sparked a firestorm of controversy after plans for a mosque and community center at 51 Park Pl., the site of a former Burlington Coat Factory, were revealed in the summer of 2010.

The project was dubbed the Ground Zero mosque, even though it was blocks away from the World Trade Center site and the mosque was merely part of a planned 15-story community center.

But since then, the Muslim congregation — now known as PrayerSpace — has formally separated from the group and worships in an adjoining building.

The dispute hinges on the appraisal of 51 Park Pl., which is owned by Con Edison, but leased by Park51. The group, which operates an interfaith center on the first floor of 45 Park Pl. next door, had hoped to build a $100 million center in place of both buildings.

After Park51 exercised an option to renew the lease in August 2008, the sides could not agree on the fair market value of the building, which is a factor in determining rent, the documents say.

So they brought in a third-party appraiser, which determined that the market value was $10.35 million.

Based on that, Con Ed argued that Park51 owed more than $47,437 a month for the property more than 17 times the rent that it had been paying of $2,750, according to the suit. That amounted to $1.7 million since the lease was renewed, discounting the rent the group had paid to date at the old rate.

In a letter on Sept. 17, the utility said that Park51 was in default and had 20 days to pay, the documents say.

And it said that if Park51 did not pay, the "Landlord may exercised all remedies available under the Lease, including...recovery of the premises demised thereunder, which would also terminate and render void the purchase option."

But Park51 filed suit, disputing the way in which the rent was recalculated and the time that it had to repay the money, the documents say. Instead, it argues that the rent should be about half that, or $25,875 per month.

A judge has issued a temporary restraining order, putting the proceedings on hold until a Nov. 17 hearing.

"The tenant currently owes a significant amount of rent retroactive to August 2008," Con Ed said in a statement. "Con Edison remains hopeful that it can reach an agreement with the tenant that is in the best interests of all parties."

Representatives for Park51 did not immediately respond to calls and an email for comment.