Demolition Plans Pit Developer Against Leases
Harry Macklowe may or may not like chocolate — he will not say. But he is feuding with a famous chocolatier over things like leases, scaffolding, air-conditioning, even bathrooms.
And, directly or indirectly, money, of course.
Mr. Macklowe is the New York developer who is famous, or infamous, for demolishing two single-room-occupancy hotels in the middle of the night, tangling with Martha Stewart over a hedge in the Hamptons and buying the GeneralMotorsBuilding for a record price.
The chocolatier is the American subsidiary of the Parisian company Fauchon, which also sells pastries, preserves to spread on them and coffee and tea to drink with them.
Fauchon arrived in New York in 1999 and signed a lease for a 3,000-square-foot restaurant and store in the Drake Hotel, at Park Avenue and 56th Street. Mr. Macklowe bought the 495-room hotel in March with an eye toward demolishing it and building a new apartment tower on the site. City property records indicate that the price was $418.3 million.
Fauchon, which occupied the only storefront in the Drake, had more than a decade left on its lease. But Mr. Macklowe made clear that he wanted to clear the building. Early this month, he paid Fauchon $4 million to shorten its lease. Fauchon expected to remain there until April 2007, doing business as usual.
Before you could say "kouing aman"— a caramelized pastry that Fauchon sells for $3.50 to go or $5 in the cafe section of the store — scaffolding went up. Construction crews removed the French and American flags that Fauchon had flown over its front door. And Fauchon went to State Supreme Court in Manhattan last week, and Justice Karen Smith issued a temporary restraining order barring demolition.
At a hearing on Friday, she told the two sides to work out an arrangement and report back on Tuesday. There were moments during the hearing when she indicated that she would replace the temporary order with an injunction if the two sides did not come to terms.
Fauchon maintains that Mr. Macklowe is trying to drive Fauchon out, in part by disrupting its business. "Leaving early was a concession in and of itself," said Zeina Sayegh, the president and chief executive of Fauchon's North American subsidiary.
She said she had been "devastated" because the store at the Drake "is our flagship, our presence in the United States." She and Fauchon's lawyer, Dan J. Shulman, also said that the Macklowe organization had said it would cut off air-conditioning to Fauchon after the Drake closes at the end of the month. And, they said, the Macklowe organization had told Fauchon that it would have to install its own bathrooms, because the ones in the hotel that Fauchon's customers and employees had been using would no longer be available.
Neither Mr. Macklowe nor William S. Macklowe, Harry's son, who works in the family real-estate business, was in court on Friday. In an affidavit, the younger Mr. Macklowe accused Fauchon of going to court prematurely and "substituting irrelevant ad hominem attacks for a careful consideration of the lease."
He also said that the flags had been put back and that the scaffolding did not block the entrance to the store, but had been "specifically constructed" above and around it. He said he was prepared to put additional signs for Fauchon on or above the scaffolding.
"What is really going on here, we submit," Mr. Macklowe said in the affidavit, "is that tenant wants more than the $4 million that we just paid to it."
Ms. Sayegh of Fauchon denied that. "I want to be able to enjoy my legal right to stay in my space until April of 2007 without being harassed," she said.
In his affidavit, Mr. Macklowe also argued that it was irrelevant that demolishing the hotel might disrupt Fauchon's operations or upset what he called Fauchon's "internal hope that it could stay at this location for many more years."
As for whether Mr. Macklowe is a chocolate lover or a chocolate hater, the lawyer who represented him in court, Richard Claman, would not say. He referred a reporter to a spokesman for Mr. Macklowe, Howard J. Rubenstein, who said he did not know, either, but promised to put the question to him.
Mr. Rubenstein called back a few minutes later and said: "When I started asking him about chocolate, he started talking to me about French fries. He wouldn't talk about chocolate."
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