Chapter 6 - The Proposed Extension
Margaret had her own lawyer.
Good.
Her name was Helen Parkhurst.
Seventy-one.
Land-use attorney.
Had known my mother thirty years.
Vanessa’s proposed amendment contained several things Margaret disliked.
First:
A thirty-year extension at a fixed ground rent far below current appraised market value.
Second:
Broad rights for Bellafonte Hospitality to assign or mortgage the lease without Margaret’s approval.
Third:
A provision requiring the landowner to subordinate certain enforcement rights to future lenders.
Fourth:
A waiver limiting Margaret’s ability to object to major structural changes.
None of those terms were automatically outrageous in sophisticated ground leases.
Together, at the offered rent, they heavily favored the tenant.
Vanessa’s position:
Bellafonte had invested millions in the property.
The operating company created the value.
A high rent reset would hurt the venue.
Margaret’s position:
The land had appreciated enormously.
An independent appraisal placed it around $8.7 million.
A thirty-year below-market lease would transfer millions in economic value from her to Bellafonte’s owners.
Including Vanessa.
Margaret told Helen:
“I am willing to be generous. I am not willing to pretend generosity has no number.”
That sounded exactly like her.
Vanessa thought it was greed.
My mother thought it was basic property law.
I had stayed out.
That became a mistake.
Not because I should have dictated terms.
Because I owned thirty-eight percent of Bellafonte and had a duty to understand a financing issue that could destabilize it.
Instead, I said:
“Vanessa is handling it.”
Familiar phrase.
May you like
Dangerous phrase.
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