After failing to pay months of rent for occupancy within a new building, Cornell University has found itself embroiled in litigation against the building’s owner.

1240 First Avenue LLC constructed a building in New York City located on 400 East 67th St. that hosts commercial space in addition to luxury residential condominiums. A total of 25,000 square feet of space within the building was rented by Weill Cornell Medical College, split between the second, basement and subbasement floors of the building.

The issues began when construction on the building was delayed, and Cornell started to complete its own internal construction on its portion of the building without notifying the landlord.

Cornell’s occupancy of the newly built office space complicated rent and lease issues, which have now been taken to court. The case is currently being handled as two separate issues in different New York State court circuits, the Supreme Court and Civil Court.

The University initiated litigation when it asked the Supreme Court to relieve them of paying rent for occupying the space while it was still under construction. They also sued 1240 First Avenue LLC for damages relating to the construction delays, according to Deputy University Counsel James Kahn.

John M. Hadlock, the Winston & Strawn L.L.P. attorney who represented Cornell recently in its motion in the Supreme Court, stated that because construction was not complete when Cornell began to further develop its space, the contractors unreasonably interfered with Cornell’s use of its space.

“We know we haven’t paid rent. There’s no dispute about that,” Hadlock said during a court hearing, according to a transcript. “The only issue is [what] the rent commencement date [is] and that’s a construction issue. And we have said from the beginning that this is a pretty complex construction case that we have asserted 13 different problems that we’ve encountered.”

The incomplete construction led to internal issues with the building which Hadlock said he believes led to an unreasonable number of delays. “There’s any number of significant construction issues such as when, if ever, did our space get waterproofed. It’s been constantly flooded. Still are to this day,” he added.

1240 First Avenue LLC, meanwhile, has recently motioned against Cornell’s desire to litigate the case in the Supreme Court. Robert Semaya, one of the Moses & Singer L.L.P. attorneys representing the landlord in the case, said that the case is simply a rent issue, with Cornell failing to pay its rent.

Initially, the lease was set to begin in January 2008. Due to construction delays, however, a lease date agreement was signed on March 1, 2008 to push the first payment of rent back to December 25 the same year. That date was then extended once again to January 17, 2009, though Cornell insisted it be pushed back even later, despite its occupancy of the building.

As of now, Cornell has failed to pay for seven to eight months worth of rent and accrued a total of $1.4 million in rent debt to be paid to 1240 First Avenue LLC, according to Semaya.

“The Civil Court is currently litigating what is basically a dispute over rent and lease commencement dates,” Semaya said in a interview. “Cornell is seeking relief through the Supreme Court, and by doing so, they’re deferring payments to the contractors.”

Hadlock told the Court that Cornell should be entitled to a rent-free 237 days of occupancy, considering that they were delayed a total of 237 days – an issue Cornell thinks should be handled by the Supreme Court.

Judge Charles E. Ramos, on the other hand, has ruled otherwise since the first motion.

“Well I didn’t think I’d ever have to say this about Cornell University, but it’s apparent to me that all you’re trying to do is delay. This motion borders on frivolity,” Ramos declared, regarding Cornell’s motions to the Supreme Court. “If it continues I will issue sanctions against Cornell and its counsel. This is ridiculous. This is a landlord-tenant dispute. This is all about rent. That’s why there is a Housing Court and a Landlord & Tenant Court in the Civil Court.”

Now that the case is in the Civil Court, both parties are in the discovery phase, which will last until Nov. 15.