Benderson pays $4.30 per square foot of lobby space, far lower than what the hospital considers the fair market value: $28 to $38.
In its court papers, Benderson said the initial lease from two decades ago and the renewal for a second 10-year term that ends May 31, 2023 included the lower amount, reflecting the “tremendous risk” Benderson took on when it signed the lease, long before the improvements at the hospital.
Benderson also financed all of the costs of remodeling the lobby space, investing more than $300,000 with no guarantee that the space could be developed into a successful retail operation.
The rent structure is outdated at this point, said Eric Recoon, Benderson’s vice president of development and leasing, in an interview with the The News last month. Benderson has tried to extend the lease, and offered increases to reflect what it believes the fair market to be, he said.
Since the 2013 lease renewal, ECMC has accepted $1,405 in monthly rent every month from Benderson without objection, until September, when ECMC asserted for the first time that six years earlier, in 2014, the “full rent commencement date” had occurred, triggering a higher rent, according to the lawsuit. The two sides never amended the lease to account for public restrooms in the lobby space, installed after the lease was executed, and Benderson has not paid what ECMC considers “full rent.”