CBCA 8169

DENIED: February 4, 2025 CBCA 8169, 8200 FORT FAIRFIELD BP, LLC, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Robert Clark, Managing Member, and John Clark, Authorized Representative, of Fort Fairfield BP, LLC, Falmouth, MA, appearing for Appellant. David C. Charin, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Judges SHERIDAN, ZISCHKAU, and CHADWICK. SHERIDAN, Board Judge. The appellant, Fort Fairfield BP, LLC (Fort Fairfield), leases a property to the respondent, General Services Administration (GSA). Fort Fairfield appeals the denial of its claims to recoup a total of $5184.01 in rent payments that GSA withheld pursuant to the lease agreement’s real estate tax adjustment clause. GSA withheld $3261.41 in rent payments relating to the 2021 tax year and $1922.60 relating to the 2024 tax year. Fort Fairfield challenges GSA’s use of the 2020 tax year as the real estate tax base when applying the real estate tax adjustment clause for the 2021 and 2024 tax years. Since Fort Fairfield’s appeals on its two claims ask the Board to interpret the same lease agreement CBCA 8169, 8200 2 and decide which tax year is the real estate tax base, the Board consolidated the appeals pursuant to Rule 19 (48 CFR 6101.19 (2024)). For the following reasons, we deny Fort Fairfield’s appeals. Background The lease agreement required Fort Fairfield to complete GSA-directed tenant improvements at Fort Fairfield’s 169 Camden Street, Rockland, Maine, property (the property). Once Fort Fairfield completed the tenant improvements and GSA accepted them, GSA’s lease term was to commence. In lease amendment 1, dated April 10, 2018, GSA issued Fort Fairfield a notice to proceed with tenant improvements. Fort Fairfield completed the tenant improvements, and lease amendment 2 established July 27, 2018, as the completion date of the improvements. At that time, all ordered tenant improvements had been completed, and the amendment also established July 27, 2018, as the commencement date of the ten-year lease. On December 12, 2018, GSA issued Fort Fairfield a notice to proceed with additional tenant improvements. It tasked Fort Fairfield with procuring and installing signage. Before Fort Fairfield completed this work, the City of Rockland (City) reviewed the property for the 2020 tax year. This review occurred on January 15, 2019, and the City used it to determine Fort Fairfield’s 2020 real estate tax bill. Through lease amendment 3, GSA accepted the signage work as complete on February 1, 2019. The City’s property review for the 2021 tax year occurred on May 13, 2020. The City used this review to determine Fort Fairfield’s 2021 real estate tax bill. In 2021 and 2024, GSA reviewed the lease agreement and identified the property taxes for the 2020 tax year, which totaled $18,416.49, as the real estate tax base. Under the lease agreement’s real estate tax adjustment clause, when the property’s real estate tax bill is less than the real estate tax base, GSA receives a rental credit or lump sum payment from Fort Fairfield. The amount of the rental credit or lump sum payment is the difference between the real estate tax bill and the real estate tax base multiplied by percentage of occupancy. Section 1.12 of the lease agreement sets GSA’s percentage of occupancy at 100 percent. Thus, the amount that Fort Fairfield owes GSA, when applicable, is the difference between the real estate tax bill and the real estate tax base multiplied by one. For the 2021 tax year, the property’s real estate tax bill totaled $15,155.08. This was $3261.41 less than the $18,416.49 real estate tax bill for the 2020 tax base year. Consequently, GSA withheld $3261.41 from its subsequent monthly rent payments. For the 2024 tax year, Fort Fairfield’s real estate tax bill totaled $16,493.89. This was $1922.60 less than the real estate tax bill for the tax base year. As a result, GSA withheld an additional CBCA 8169, 8200 3 $1922.60 from its rent payments. In total, GSA withheld $5184.01 for the 2021 and 2024 tax years. Disagreeing with GSA’s withholding of rent for the 2021 and 2024 tax years, Fort Fairfield submitted two claims to the contracting officer. For each claim, Fort Fairfield argued that the real estate tax base was the 2021 tax year, not the 2020 tax year.