ARK BRYANT v. BRYANT PARK

• Decision Date: 23 August 2001
• Citation: 285 A.D.2d 143,730 N.Y.S.2d 48
• Parties: ARK BRYANT PARK CORP., Respondent-Appellant,<BR>v.<BR>BRYANT PARK RESTORATION CORP., Defendant, and CITY OF NEW YORK et al., Appellants-Respondents.
• Court: New York Supreme Court — Appellate Division

285 A.D.2d 143

730 N.Y.S.2d 48

ARK BRYANT PARK CORP., Respondent-Appellant,

v.BRYANT PARK RESTORATION CORP., Defendant, and CITY OF NEW YORK et al., Appellants-Respondents.

NARDELLI, J.

August 23, 2001.

Arthur M. Handler of counsel, New York City (Robert S. Goodman and David S. Goldstein on the brief; Handler & Goodman, L. L. P., attorneys), for respondent-appellant.

John Hogrogian of counsel, New York City (Pamela Seider Dolgow and John L. Hunt on the brief; Michael D. Hess, Corporation Counsel of New York City, attorney), for municipal appellant-respondent.

Jack Hassid, New York City, for Council of Fashion Designers of America, Inc. and another, appellants-respondents.

SULLIVAN, P. J., WILLIAMS, MAZZARELLI and SAXE, JJ., concur.

OPINION OF THE COURT

NARDELLI, J.

In this breach of contract action, we are asked to determine whether a certain letter agreement between plaintiff Ark Bryant Park Corp. (Ark) and defendant Bryant Park Restoration Corp. (BPRC), which granted exclusive catering rights to Ark for private functions scheduled in Bryant Park, constitutes a sublicense under a "Management Agreement for Bryant Park" between defendant the City of New York (the City) and BPRC.

Background^[1]

Bryant Park, which is located between 40th and 42nd Streets on the east side of Sixth Avenue (the Park), New York, New York, is a public park that was designated a New York City Scenic Landmark by the Landmarks Preservation Commission in 1974. The Park, which consists of approximately 10 acres, has undergone a number of transformations and was originally utilized in 1823 as a potter's field following a yellow fever epidemic. In 1842, the Croton Aqueduct Distributing Reservoir was constructed on the land now occupied by the New York Public Library, and the land behind it became a public park in 1847, appropriately named Reservoir Square.

The City staged the first World's Fair held in the United States in the Park in 1853, and in 1884, the Park was given its present name in honor of William Cullen Bryant. In 1899, the City demolished the reservoir, which had become obsolete due to the City's burgeoning population, and began construction on the present Public Library building, which was officially opened on May 24, 1911. A period of decline began in the 1920's, which was prompted by the effects of the construction of the Sixth Avenue subway. By the 1970's, the Park was the site of open drug dealing and was used as a haven for drug addicts and a refuge for the homeless.

The Contracts

In 1980, the New York Public Library and the Rockefeller Brothers Fund formed BPRC, a not-for-profit corporation devoted to the restoration and long-term maintenance of the Park as a public asset. On July 29, 1985, the City and BPRC executed a contract denominated "Management Agreement for Bryant Park" (the Management Agreement), section 3 of which provides that "[t]he City hereby engages BPRC to provide, and BPRC agrees to provide * * * management services for the Park, and the City does hereby grant to BPRC the exclusive license and privilege to operate and manage the Park * * * so long as BPRC shall maintain the Park as a public park, in accordance with the purposes of this Agreement, upon the terms and conditions herein contained." Section 5 notes that simultaneously with the execution of the Management Agreement, the City, BPRC and the Library were entering into a separate agreement entitled "Terrace Agreement," which leased a portion of the Park known as the "West Terrace" to BPRC with the understanding that BPRC would construct and operate a structure at that location, the subsurface area of which would be used for library stacks, and the surface area as a restaurant.

Section 17 of the Management Agreement, entitled "Concessions; Visitors Services," defines "Visitors Services" as, inter alia, "the operation of any restaurant or cafeteria" and "any service or facility intended for the sale of souvenirs, food, beverages * * * goods or services." Section 17 (b) of the Management Agreement provides:

"The City hereby grants BPRC the exclusive right to operate and maintain Visitors Services in the Park (including the Department [of Parks and Recreation]'s interest in bordering sidewalks), and to sublicense others to do so subject to the provisions of this Section 17. The license granted under this Section 17 shall extend from the Commencement Date for the Initial Term or for such longer period as the Commissioner may determine, provided that this license shall be revocable at will at any time by the Commissioner upon thirty (30) days' notice" (emphasis added).

Section 17 (c) of the Management Agreement provides that the license granted to BPRC "will be sublicensed by BPRC to the Operator, with respect to the serving of food and drink and the provision of such other Visitors Services as BPRC and the Operator may provide." Section 17 (d) states, inter alia, that "[n]othing contained in this Agreement shall create (or be deemed to create) any relationship of contract or agency between the City and the Operator or any Concessionaire."

BPRC closed the Park in 1988, and over the course of the ensuing four years restoration and improvements totaling approximately $8.9 million were performed on the Park. On or about September 1, 1991, BPRC and Ark entered into a lease regarding the restaurant under construction and certain kiosks located in the Park. On or about August 1, 1993, BPRC and Ark executed an agreement entitled "Restated Indenture of Lease" (the Grill Lease) which superseded the original lease. The Grill Lease, which is for a term of 20 years, gives Ark the right to operate a restaurant in the building to be constructed by BPRC, and to serve food and beverages outdoors on the West Terrace from May through September. In 1995, Ark opened the Bryant Park Grill, which includes an indoor restaurant and outdoor café, and continues to operate that facility to the present day.

Ark and BPRC also entered into a separate two-page letter agreement, on or about the same date the Grill Lease was executed, regarding catering services to be provided for functions held in the Park (the Catering Agreement). The Catering Agreement provides in relevant part, that: Ark is to be the exclusive provider of catering services for functions taking place in the Park during the term of the Grill Lease, except that BPRC shall be granted two waivers to sponsors holding affairs in the Park to use caterers other than Ark; and no waiver can be issued by BPRC to a sponsor who has previously contacted or entered into negotiations with Ark regarding catering for an event in the Park. The Catering Agreement, as required by section 17 (c) of the Management Agreement, was approved by the Commissioner of the City Department of Parks and Recreation (the Department of Parks).

The Current Controversy

Defendant Seventh on Sixth, Inc. (SOS) is a New York not-for-profit corporation which was formed in or about August 1993 for the purpose of sponsoring centralized fashion shows in furtherance of the interests of the apparel industry. Defendant Council of Fashion Designers of America, Inc. (CFDA) is a New York not-for-profit corporation and a trade association comprised of fashion and accessory designers located in the United States.

In or about August 1993, SOS entered into a license agreement with BPRC pursuant to which SOS was permitted to erect two large tents on the central lawn of the Park in order to conduct the aforementioned fashion shows. The events, which take place during two 16-day periods each spring and fall, have popularly become known as "The Bryant Park Fashion Shows." Once the Bryant Park Grill opened in 1995, SOS employed Ark as the exclusive caterer for the fashion shows.

BPRC granted SOS licenses to stage fashion shows in the fall of 1996 and the spring of 1997, which provided that SOS "understands that Ark has the exclusive right to provide food service in the park, and that neither [SOS] nor its licensees may use any other provider of food service in the park." However, by letter dated November 21, 1997, the Commissioner of the Department of Parks, relying on section 17 (b) of the Management Agreement, revoked BPRC's license "to the extent that it authorizes you to enter into an agreement for provision of food and beverage catering at special events in Bryant Park," effective 30 days from the date of the letter. The Commissioner's letter further noted that as a result, BPRC's sublicense with Ark (the Catering Agreement) would be null and void as of that date and that such revocation allows "anyone who obtains a special events permit in Bryant Park to purchase food and beverage catering services from a vendor of his or her choice."

Ark protested the Commissioner's revocation by letter dated December 2, 1997, maintaining that it was not a party to the Management Agreement, that the Catering Agreement had no termination provision, and that the Catering Agreement remained in effect despite the City's revocation letter. Ark contends that approximately one year later, it discovered that BPRC had granted SOS a waiver to hire outside caterers for a fashion event to be held February 15-18, 1999, and that such waiver constituted a violation of the Catering Agreement. It should be noted that BPRC and SOS entered into licensing agreements, dated October 22, 1998 and January 27, 1999, for fashion shows to be held in the fall of 1998, and the spring of 1999, respectively. These agreements, which postdated the City's revocation letter, no longer refer to Ark as the exclusive caterer for such events.

The Present Litigation

Ark initially commenced an action against the Department of Parks, BPRC and CFDA by the service of a summons and complaint on or about June 29, 1999, and on August 13, 1999, it served an amended complaint, albeit without the court's permission, purporting to add SOS as a party defendant. Ark thereafter elected to discontinue that action, without prejudice,...