_________________________________ MOTION FOR RECONSIDERATION DENIED January 12, 1998 _________________________________ GSBCA 12920-SEC-R JUDICIARY PLAZA LIMITED PARTNERSHIP, Appellant, v. SECURITIES AND EXCHANGE COMMISSION, Respondent. Wayne G. Travell of Tucker, Flyer & Lewis, Washington, DC, counsel for Appellant. George Conril Brown, Gary R. Allen, and R. William Barton, Office of General Counsel, Securities and Exchange Commission, Washington, DC, counsel for Respondent. Before Board Judges PARKER and VERGILIO.[foot #] 1 VERGILIO, Board Judge. On October 30, 1996, Judiciary Plaza Limited Partnership (JPLP) (the lessor) filed a motion for reconsideration of the underlying decision, Judiciary Plaza Ltd. Partnership v. Securities & Exchange Commission, GSBCA 12920-SEC, 96-2 BCA 28,596. JPLP requests that the Board reconsider the conclusion that the agency is entitled to recover all rent paid for the eleventh floor for the period of February 4, 1994, through April 15, 1995. JPLP asserts that the Board reached this conclusion based upon a theory not advanced by the agency or defended by JPLP, such that JPLP did not present relevant information and argument. Moreover, JPLP states that the Board's interpretation is inconsistent with definitions found in the lease. The respondent, the Securities and Exchange Commission (SEC), opposes the reconsideration request. ----------- FOOTNOTE BEGINS --------- [foot #] 1 Judge Devine, on the original panel, retired while this reconsideration has been pending. ----------- FOOTNOTE ENDS ----------- 2 JPLP put at issue its entitlement to rent for the period. The questions raised were principally legal in nature--requiring an interpretation of long-term and short-term leases. While the interpretation reached by the Board is at odds with that proffered by JPLP, it was reached in recognition of the terms of the leases, including definitions JPLP suggests were overlooked by the Board., and all factual material in the record. Findings 14, 15, and 16 largely resolve the issue of rent for the eleventh floor. In summary, the Board concluded that the long-term lease provisions controlled rental payments for the eleventh floor for the period now in question. That lease permitted the SEC to vacate the eleventh floor and obligated the SEC to pay rent for a limited time after vacating the floor (the first 120 days after the date of vacating the floor, as may be extended for tenant delay). Apart from such provisions, the long-term lease provided that the SEC's obligation to pay rent for the vacated eleventh floor ceased from the first calendar day following the substantial completion target date until the eleventh floor became improved premises (that is, was substantially complete). The SEC vacated the eleventh floor in August 1993. The substantial completion target date was in February 1994. The record did not demonstrate that tenant delays altered the target date. In April 1995, the eleventh floor became improved premises. Thus, the Board concluded that the SEC is not obligated to pay rent for the period in question. In its request for reconsideration, JPLP maintains that the vacation date for the eleventh floor could not have been earlier than January 4, 1994. JPLP fails to distinguish between the phrase "vacation date" and "first vacation date." As noted in Finding 14, the long-term lease obligated the SEC to vacate the eleventh floor on or before the first vacation date (a term defined in the lease, but which is not relevant to when the SEC actually vacated the eleventh floor). As specified in Finding 15, the SEC's obligation to pay rent under the long-term lease is tied to the "vacation date," not the "first vacation date."[foot #] 2 JPLP also asks for reconsideration regarding the substantial completion target date. As noted in Finding 16, the long-term lease limits the SEC's obligations to pay rent on a vacated block until it becomes improved: ----------- FOOTNOTE BEGINS --------- [foot #] 2 Moreover, JPLP's interpretation of the long- term lease is not faithful to the fast-track provisions of the lease for the eleventh floor, which establish a 120-day completion period, with rent to be suspended if work is not substantially completed by the end of the 120 days. ----------- FOOTNOTE ENDS ----------- 3 Anything to the contrary contained in the lease notwithstanding, (a) SEC's obligation to pay rent or other consideration with respect to Vacated Premises comprising a Vacated Block shall cease and be suspended upon and effective as of the first calendar day following the Substantial Completion Target therefor until the time when such Block is entitled to become (and in fact becomes) Improved Premises . . . . As found in Finding 23, the SEC established February 3, 1994, as the target substantial completion date (120 days after the approval of plans and specifications for the eleventh floor). JPLP had the right to terminate the long-term lease. JPLP exercised that right. It was that action which largely affected the build-out of the eleventh floor. The record does not show that SEC actions and inactions constituted tenant delay so as to affect rental obligations. 96-2 BCA at 142,773. JPLP has not established a basis for the Board to grant reconsideration on this matter or to reopen the record. As already concluded, under the long-term lease entered into between JPLP and the SEC, the SEC was not obligated to pay rent for the period in question. The Board DENIES the MOTION FOR RECONSIDERATION. ___________________________ JOSEPH A. VERGILIO Board Judge I concur: ___________________________ ROBERT W. PARKER Board Judge