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Manhattan Islamic center owes $1.7 million, landlord says

By the CNN Wire Staff
updated 4:33 PM EDT, Sun October 16, 2011
The site of the proposed Islamic center near ground zero in New York is seen on September 9, 2010.
The site of the proposed Islamic center near ground zero in New York is seen on September 9, 2010.
STORY HIGHLIGHTS
  • The Park51 center is locked in a dispute with Con Edison
  • The utility says Park51 owes back rent
  • The center says the demand is "grossly inflated"
  • Park51's plans drew intense opposition in 2010

New York (CNN) -- Lower Manhattan's controversial Park51 Islamic center is now in a court battle with utility Consolidated Edison, which says the center owes it $1.7 million in a dispute over back rent.

In court papers, Park51 says it owes Con Edison only $881,000 and calls the utility's demand "grossly inflated." The center has filed suit against the company over a default notice it was issued in September, and a New York state judge has stayed any action until after a hearing in November.

In a statement to CNN on Sunday, Con Edison said it "remains hopeful" that it can work out an agreement with Park51, which leases part of its property from the utility. Park51's developers did not return a phone call seeking comment.

The center, which includes a mosque, drew intense opposition in 2010 from politicians, conservative activists and some families of the victims of the al Qaeda attack on the World Trade Center. The twin towers stood about two blocks from the site before they were destroyed by the suicide hijackings on September 11, 2001, leading critics to dub the project the "Ground Zero Mosque."

The interfaith center's leaders said the project will be a 16-story community center with recreational, educational and cultural programming rooted in a spirit of cooperation and coexistence. City officials refused to block its construction, and Park51 held its grand opening in September.

According to court documents, Park51 has exercised an option to purchase the Con Edison portion of the site for $10.7 million. The center says it has been paying $2,750 a month -- minuscule by New York standards -- under its initial lease. The rent was to be recalculated based on the market value of the property after it renewed the lease in 2008, but disputes over the appraisal lasted until this August.

In September, Con Edison demanded the $1.7 million it said it was owed.

"The lease for the property calls for the tenant to pay this money now that an appraisal process has been completed," the utility told CNN. "Under the terms of the lease, Con Edison requested payment of outstanding rent, but to date, tenant has not yet made the required payment."

But lawyers for Park51 argue the demand is based on "a fundamental misreading" of its lease and have accused Con Edison of improperly trying to take back the property.

"Whether it is bowing to political pressure or seeking to retain the valuable premises for itself, Con Ed appears intent upon proceeding with its wrongful termination (and cancellation of plaintiff's right to purchase the premises) and it has expressly threatened to do so," they wrote.

Con Edison said Sunday it has defended Park51's right to buy the land.

CNN's Chris Boyette contributed to this report.

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