Monday, October 17, 2011

Park51/Cordoba House May Lose Site To Con Ed Over Disputed Rent

In the end, it wont be because of anti-Muslim sentiment that the Park51/Cordoba House project to build a prayer space and community center near Ground Zero.

It will be the lack of financial resources and a rent spat with Con Ed that may sink the project.

Con Ed claims that the developers owe more than $1 million in back rent.

The developers claim that Con Ed retroactively raised the rents to 2008 and that puts a cash crunch on the developers:
Park51, which leases the substation from Con Ed, wants the two buildings so it can knock both down and build a $100 million, 15-story community center.

But the plan hit a major obstacle in August when Con Ed raised the rent from $2,750 a month, a rate set in 1972, to $47,437 a month, retroactive to July 31, 2008, The Post has learned.

When the mosque failed to fork over the $1.7 million, the utility fired off a letter demanding the money by Oct. 4 and threatening to evict.

Park51 principals responded with a lawsuit to stop the increase, calling Con Ed’s rent demands “outrageous.”

“Whether it is bowing to political pressure or seeking to retain the valuable premises for itself, Con Ed appears intent on proceeding with its wrongful termination,” argued Sharif El-Gamal, the lead Park51 developer.
The primary questions will be factual in nature - whether Con Ed is legally entitled to retroactively raise the rent, whether proper notice was given, and while negotiations are continuing, El-Gamal has a temporary restraining order preventing eviction. The issues will be before the court in November.

It is interesting to note that the parties had come to an apparent agreement on the valuation of the property but El-Gamal contends that the utility improperly valued the rents at nearly double what they should have been.

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