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The Rest of the Story

The Rest of the Story. Van Wagner Advertising Corp. v . S & M Enterprises By Constance Smith J.D. 2010, St. Mary’s Law School, San Antonio, Texas. A little about the building . Built in 1930 by B. Altman & Co. B. Altman & Co. was a famous Fifth Avenue department store

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The Rest of the Story

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  1. The Rest of the Story Van Wagner Advertising Corp. v. S & M Enterprises By Constance Smith J.D. 2010, St. Mary’s Law School, San Antonio, Texas

  2. A little about the building • Built in 1930 by B. Altman & Co. • B. Altman & Co. was a famous Fifth Avenue department store • 5 stories & a cellar for storage • Built and used initially as a factory

  3. The Queens Midtown Tunnel was completed in 1940 with the exit ending at B. Altman & Co.’s factory The building continued to be used as a factory until 1961 when it was leased as commercial property In January 1973 Barbara Michaels became the fee owner of the property until it was sold to S & M Enterprises

  4. Note that the lawyers drew this map upside down. North is at the bottom, and East is on the left.

  5. Recall Some Facts • Van Wagner leased the space December 16, 1981 • Early in 1982 Van Wagner erected an illuminated sign and leased it to Asch Advertising, lease to begin March 1, 1982 • What did the billboard look like?

  6. Recall more facts . . . • Barbara Michaels sold the building to S & M Enterprises by agreement dated January 22, 1982 • This was only 1 month after Van Wagner signed the lease agreement with Michaels • When this contract was signed Van Wagner was actively erecting the billboard on the side of the building; and • It was still 1 month before the lease with Asch was to begin • But S & M didn’t sent Van Wagner a letter purporting to cancel the lease until August 19, 1982 • Why did S & M allow Van Wagner continue to erect the billboard? • Why did S & M wait almost 7 months before canceling the lease?

  7. Delayed Lease Cancellation • While the contract for sale was signed January 22, 1982 S & M Enterprises did not acquire the mortgage until August 4, 1982 in the amount of $2,150,000 • This is most likely why S & M waited to cancel the lease with Van Wagner until August 19, 1982 • Van Wagner filed suit in November of 1982 • The trial on the merits denied Van Wagner’s injunction and awarded damages in the amount of $90,367.54, judgment entered March 13, 1984 • Appeal to the highest court in NY wasn’t decided until May 7, 1986 • So what happened between 1984 & 1986?

  8. In the interim • On May 17, 1985 S & M licensed the space to Winston Network, Inc. on a month to month basis • So at the time the Court of Appeals of the State of New York decided this case the space was being used as a billboard • Recall S & M planned to demolish the building to construct a mixed residential-commercial development, which was planned to begin the following year in 1987. • The reason S & M was waiting was due to the tenant who was leasing the building had a lease that extended until 1987. • What happened to the lessee?

  9. United States Post Office

  10. New York Times 3/10/1984 • “It is time to consider private competition for the United States Postal Service in New York City. Under its monopoly on general delivery services, the Postal Service has failed to deliver mail in a reasonably quick and efficient manner. . . . My own surveys over the past two years have found that less than 50 percent of the mail in my tests made it from Manhattan mailboxes to Manhattan addresses overnight. . . . But other changes are coming, the Postal Service says. Leases are expiring on two midtown post offices - the Murray Hill (10016) and Bryant (10036) stations - and the landlords are not interested in renewing them, so new locations will have to be found. Also, the Service wants to take advantage of the real estate value of its Grand Central Post Office building. Thus, we may face major disruptions of midtown delivery in the late 1980's.”

  11. What did the U.S. Post Office do? • On June 29, 1987 the United States Post Office filed for eminent domain and took possession of the building. • Recall the Van Wagner case was remanded to the Supreme Court of New York to determine damages that “should have been awarded through the expiration of the Van Wagner’s lease.” • The ultimate measure of damages was still at issue when the U.S. Post Office acquired the building • What was the end result?

  12. June 5, 1987 - Settlement Agreement • June 5, 1987 Van Wagner and S & M entered into a settlement agreement • Cancellation of the month to month license to Winston • Guaranteed Van Wagner a fixed lease of 7 years and 5 months • In addition, S & M agreed to pay Van Wagner $125,000 • Interesting term: “Defendants specifically acknowledge and agree that Van Wagner shall have the right to require Defendants to specifically perform the terms and conditions of this Stipulation and the Lease Agreement as hereby amended.” • So what does the space look like today?

  13. Van Wagner lost the battle, but won the war

  14. http://www.youtube.com/watch?v=lPgVY-ZBQ90

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