Phillips Lytle claims it was overcharged by Seneca One - The Buffalo News

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Phillips Lytle claims it was overcharged by Seneca One

One of Buffalo’s two largest law firms spent decades – and more than $33 million in rent – occupying part of Buffalo’s tallest building, but now it wants a portion of that money back.

Phillips Lytle LLP says it was improperly overcharged by $612,574 over several years by its former landlord, Seneca One Realty, and is demanding to be reimbursed.

The firm claims it was wrongly assessed from 2005 to 2012 for capital expenditures and improvements to the building, which were not included in its lease.

It also asserts that Seneca One double-charged it for administrative fees that the firm had already paid as part of its “additional rent” under the lease agreement.

And it claims that Seneca One refused to reimburse Phillips Lytle even after a panel of arbitrators ruled in favor of HSBC Bank USA – the dominant namesake tenant of the building – over similar charges.

The firm has filed legal papers in the foreclosure case against New York City-based Seneca One, intervening as a defendant and seeking to ensure it gets paid before the lender takes possession of the building and any proceeds from selling it.

A hearing in the matter has been scheduled for 2 p.m. June 16 before State Supreme Court Justice Timothy Walker, who is overseeing the foreclosure case.

“We certainly believe the claim is meritorious, and the lender is liquid, and there will be proceeds from the sale of the building at the time the building is sold,” said Phillips Lytle managing partner David McNamara. “So we believe there will be funds that should be used to reimburse us.”

Phillips Lytle, one of the two anchor tenants of the 850,000-square-foot, 38-story tower since 1989, occupied 77,000 square feet on five floors since 1994 under a 20-year lease that expired late last year. The annual rent started at just over $900,000, or $15.50 per square foot, but escalated steadily until the firm was paying $2.1 million, or $27.18 per square foot, in its final year.


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