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New York City, Forest City settle dispute over 42nd Street retail complex

Hey, remember the May 2017 lawsuit filed by New York City against Forest City Ratner regarding the terms of a ground lease for the 42nd Street entertainment complex that includes AMC Theaters and Madame Tussauds?

Well, it's settled now, after arbitration, according to a document in the case file of The City of New York vs. FC 42nd Street Associates, L.P., though the terms are not stated.

The lease was supposed to renew in 2018. Forest City paid a base rent of $1.17 million a year for the first 20 years of the lease, gaining that very nice deal in tougher times. The two parties were in dispute about whether to take into account rents paid by sublease tenants or current market value.

In December 2017, parent Forest City Realty Trust announced the sale of various retail properties but said the 42nd Street complex was expected to transact at a later date upon resolution of the lease dispute.

Putting aside the question of which theory should prevail, such retail properties have seen their value slashed during the coronavirus crisis, given the severe decline in tourism and city/state strictures on social distancing.