Public Agency Leasing Facilities on the Oakland Estuary
Client Background
Our client is a public agency that leases facilities on the Oakland Estuary.
Client Situation
The assignee of a tenant filed a declaratory relief lawsuit seeking an interpretation of lease rent escalation provisions that would reduce future payments to our client by $29 million over the remaining term of the lease.
Primary Goals
Our attorneys' primary goal was to defeat the assignee's attempt to rewrite a lease. Additionally, we sought to protect the integrity and enforceability of identical rent escalation provisions in leases with neighboring tenants.
Anticipated Problems
The 92-page single spaced lease was arguably ambiguous on the escalation clause issue, requiring that we locate and assemble the parties involved in negotiating the original lease, which took place years earlier. Many of these individuals had retired and moved out of the area. They were needed to present extrinsic evidence at trial.
Because there existed identical lease provisions with neighboring tenants with "favored nation" clauses, arguably entitling them to any outcome favorable to the assignee, we needed to protect our client's $70 million in future revenues.
Service Summary
We defended the agency's position through pretrial proceedings and successful opposition to a motion for summary judgment. Ultimately, we participated in a five-day trial.
Results
We won a complete victory at trial, with a favorable judgment affirming the client's interpretation of the rent escalation provisions and assuring future revenue streams in excess of $70 million with the subject lease and the neighboring leases.