Law & Risk: Civil Actions

A dispute over the lease at and improvements to The Arena of Long Beach, N.Y., has ended with the city's eviction of its rink tenant/operator — and a lawsuit. Bernard Shereck, the rink's chief executive, was given 30 days to vacate the premises on March 31, but has sued, contending that he holds a five-year lease that the city agreed to last November.

Shereck became the rink's manager in the fall of 2006, and embarked on an ambitious remodeling and marketing program in the hopes of attracting a semiprofessional hockey team to the arena, which was built in 1974. Shereck claims that he has invested more than $250,000 repairing crumbling infrastructure and building a pro shop, among other improvements, and the city (according to his complaint) recognized his efforts by granting him a six-month rent reprieve after he paid his initial $175,000 annual rent installment in January 2007. An existing 10-year lease that was set to expire last August included a tenant option to extend it for five years.

Among the documents cited in a story in Long Island newspaper Newsday is a March 2008 letter from city manager Charles Theofan to an auditor hired by the city, in which Theofan states, "We believe the rent obligation imposed might have to be adjusted downward," adding, "We are very pleased with the programs that have been introduced at the arena, and with physical improvements that have been undertaken."

One of Shereck's attorneys, Richard Cahn, says that Theofan agreed last November to extend the lease for five years at an annual rent of $60,000, which Shereck has been paying. "The city has no right to evict Bernie," Cahn told Newsday. "He's got a lease."

The city, which announced that recreation commissioner Joseph Brand, the Long Beach High School hockey coach, would take charge of arena operations, says the eviction is justified because Shereck did not pay the annual $175,000 rent stipulated in the original lease. Long Beach corporation counsel Corey Klein described the rent revision as part of a month-to-month tenancy after the expiration of the lease in August.