By Tom Roberts
A judge ruled on Monday that Amazon has to provide damages to the Durst Organization because it breached the terms of a 2014 letter of intent to lease space at the office building located at 1133 Sixth Ave.
For landlords in Manhattan, it was a victory of sorts.
“It’s murder trying to make a deal with Amazon,” one property owner told the New York Post anonymously.
The Durst Organization and Amazon “signed an LOI for 310,000 square feet at Durst’s 1133 Sixth Ave. in July 2014. It didn’t obligate Amazon to sign a lease, which would have been worth around $20 million. But it forbade Amazon from negotiating with any other landlord until a decision was made about the 1133 Sixth Ave. space,” reported the Post.
Months went by, and Amazon decided instead to sign a contract with Vornado Realty Trust to lease 470,000 square feet at 7 W. 34th St. “Durst sued Amazon in January 2015, claiming the e-commerce giant’s negotiations with Vornado breached the letter-of-intent for 1133 Sixth Ave.,” reported Crain’s New York Business. “After years of legal back-and-forth, Schechter ruled that “Amazon’s deception about the 34th Street building was a breach of its obligation to negotiate in good faith” with Durst.”
“Amazon unquestionably breached the LOI,” Schechter wrote in her summary-judgement finding yesterday. She also dismissed various other claims by both sides.
As therealdeal.com pointed out, “While the letter of intent, signed in July 2014, didn’t obligate Amazon to sign a lease, it forbade Amazon from negotiating with any other landlord until a final decision was made. But Jeff Bezos’ firm continued secret talks with Vornado at the same time, eventually taking 470,000 square feet at the rival landlord’s 7 West 34th Street, facing the Empire State Building, according to the Post.”
New York doesn’t seem to hold too much good fortune for Amazon. Last year of course, an outcry from local politicians, union leaders and community organizers stopped the company from building its planned additional headquarters in New York City. It was, NPR reported at the time, “a big reversal of its much-hyped decision to build the campus in Queens after a highly publicized nationwide search that lasted over a year.”
Nor was that the first sign of friction. “Long before Amazon’s Long Island City campus drama last year, the company ticked off some local real estate bigwigs by negotiating “down to the wire” with multiple landlords at the same time, The Post’s Lois Weiss reported in November 2017. However, none of the situations was known to lead to a lawsuit,” the Post reported.