Manhattan restaurant claims landlord is driving away customers

On Behalf of | Jun 27, 2014 | Commercial Real Estate

A popular Lower Manhattan restaurant is suing its landlord, claiming the landlord is trying to drive it out of its space to make room for a more profitable tenant. P.J. Clarke’s, part of a popular chain, has occupied the space at the former World Financial Center since 2006 and became a popular spot as the neighborhood recovered from the September 11, 2001 terrorist attacks.

But the restaurant chain alleges that as the property prices increased in recent years due to development, the landlord, Brookfield Properties, has engaged in a deliberate campaign to drive customers away from the restaurant. P.J. Clarke’s claims that Brookfield has been performing renovations at the site, and has set up barricades and sheds which block customers’ views of the Statue of Liberty and the Hudson River. The restaurant also claims Brookfield cut telephone lines and permitted leaks to damage the restaurant.

According to P.J. Clarke’s, Brookfield had offered to buy out their 15-year lease. The restaurant refused. The suit alleges Brookfield then began trying to put them out of business, in order to get more profit from a new tenant. According to the suit, the restaurant’s revenue has been cut in half due to the landlord’s actions.

Commercial lease disputes can be complicated and in Manhattan the stakes are often very high. As with any contract, both parties to a commercial property lease have obligations to the other. The landlord has an obligation not to unreasonably interfere with the tenant’s use of the property. On the other hand, a retail tenant can be required to put up with minor inconveniences in order for the landlord to conduct repairs and renovations. In a case like this evidence as to the landlord’s alleged motive, and as to the reasons for the drop in restaurant sales, will likely be critical.

Source: CBS New York, “Lawsuit Claims Landlord Is Trying To Drive P.J. Clarke’s Out Of Downtown Site,” June 11, 2014