Battery Park authority seeks to terminate Dermot, HPH lease at historic Pier A building

The Battery Park City Authority is seeking to terminate a lease at 22 Battery Place in Lower Manhattan with an affiliate of the Dermot Company and HPH Hospitality and seeks in part $4.6 million in unpaid rent and interest, according to a lawsuit filed this week. The tenants announced they were surrendering the lease in April 2020, at the height of the Covid lockdowns, and announced the building was closed. LINK

The Battery Park City Authority as sublandlord signed a 25-year lease in 2011 with Dermot Company and HPH Hospitality for the Pier A Harbor House as subtenants, and the tenants proceeded with a renovation news reports valued at $40 million, and reopened the building in 2014.

Covid restrictions forced the restaurant to close, and the tenants sent a notice in July 2020 that they surrendered the property on April 27, 2020. Battery Park did not accept that surrender.

Court filings are the positions of one party and are not necessarily accurate or complete. Dermot and HPH have not yet filed response papers.

Battery Park seeks $4.6 million in unpaid rent and interest.

The partnership obtained several loans, including one from New York Regional Center EB-5 company, according to a press release from the center.  The Pier A Harbor House, which opened in 2014, has a lease through 2038, but closed during Covid.

According to the complaint, “The gross square footage of the Demised Premises is 38,725 square feet. The first and second floors of the Building each contains approximately 15,000 gross square feet of space, while the third floor contains approximately 8,725 square feet. ”

The lease established a fixed rent starting at $750,000 and rising to $1.9 million, and a percentage rent of 8% on sales above $18 million, according to the lease submitted in court filings. “For each Percentage Rent Year in which Gross Sales (as hereinafter defined) exceed $ 18,000,000 (“Breakpoint”), (with such excess above the Breakpoint being referred to herein as the “Multiplicand”), Tenant shall pay to Landlord, as additional rent, an amount equal to eight percent (8%) of the Multiplicand derived from the Gross Sales with respect to the operations conducted by Tenant on the Premises, the Promenade and the Plaza.”

The Battery Park City Authority declared the lease terminated April 28, 2022 through a letter stating in part, “by the foregoing Notice of Threshold Default, Tenant was given written notice that Tenant’s failure to pay Minimum Base Rent and Deferred Rent due on January 1, 2022 was Tenant’s third such default within the 12-month period commencing November 1, 2021 and that, as such, it constituted a Threshold Default under the terms of the Lease, including, but not limited to, subsection 21(D) of the Original Lease.”