DENIED: April 26, 1994 GSBCA 12289 PRINCE GEORGE CENTER, INC. Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Coralyn G. Goode, John J. O'Brien, and Michael J. Pulver of Arent Fox Kintner Plotkin & Kahn, Washington, DC, counsel for Appellant. Jeffrey H. Dunn, Office of Regional Counsel, General Services Administration, National Capital Region, Washington, DC, counsel for Respondent. Before Board Judges HYATT, WILLIAMS, and GOODMAN. GOODMAN, Board Judge. This appeal arises from a lease between appellant, Prince George Center, Inc. (PGC) as lessor, and respondent, the General Services Administration (GSA), as lessee. PGC seeks to have GSA pay additional real estate taxes, pursuant to a clause in the lease which requires respondent to pay additional rent for its share of increases in real estate taxes. GSA has paid PGC a proportion of the escalation of real estate taxes on two tax parcels upon which the building in question is located. Appellant seeks to have GSA pay a proportionate share of real estate taxes on four additional tax parcels containing surface parking. The contracting officer denied PGC's claim, and PGC appealed the denial. The parties have stipulated to quantum in the event the Board finds entitlement, and have submitted this appeal for determination of entitlement only. For the reasons set forth below, we deny the appeal. Findings of Fact Parking and Configuration of Tax Parcels at the Presidential Building 1. PGC and GSA entered into lease number GS-11-B-70037 (the lease) dated February 25, 1987, pursuant to which GSA leased a specified amount of office and storage space and a specified number of parking spaces at the Presidential Building in Prince George's County, Maryland. This lease was a renewal of a previous lease.1 Appeal File, Exhibit 1. 2. The Presidential Building, also known as Center Three, is located within the Prince George Center Complex (the complex). Transcript at 29; Complaint 1-2. 3. At the time the lease was negotiated, the Code of Prince George's County, Maryland, Title 27, Zoning (the Code), required commercial office buildings to set aside a minimum of one parking space for every 250 square feet of office space as a condition of obtaining an occupancy permit.2 When the Presidential Building was constructed, PGC set aside 1,600 parking spaces in order to satisfy the requirements of the Code. Supplemental Appeal File, Exhibit 3, Attachment 1; Transcript at 15-17, 41. 4. The Presidential Building and 117 parking spaces adjacent to it are situated on two separate tax parcels, numbers 17-65565-10-004 and 17-65565-02-004, which are south of Toledo Road. The Presidential Building is situated on both parcels. The remaining 1,483 parking spaces for the building are north of Toledo Road and are located on four tax parcels, 17-21850-01-002, 17-21850-02-006, 17-21850-03-001, and 17-21850-04-005. Appeal File, Exhibits 3 (Tax Map Showing Prince George's Center), 4; Appellant's Exhibit 1; Transcript at 29-30, 32-34, 37. Lease Negotiation 5. The solicitation for offers (SFO), 87-018, was sent to prospective offerors. Many of the clauses in the SFO are specified in the General Services Acquisition Regulation (GSAR). Appeal File, Exhibit 1. ____________________ 1 GSA negotiated its first lease for office space in the Presidential Building in 1970, and renegotiated its lease in 1976, 1981, 1982, and 1987. GSA's percentage of occupancy leased in Center III has ranged from approximately ten percent to fifty percent. Transcript at 35, 38. 2 This formula was also described as a "PR 4.0," or "parking ratio 4.0," meaning that four parking spaces were required to be provided for every 1,000 square feet of office space leased. Transcript at 79. 6. Paragraph 23 of the SFO, Tax Adjustment, GSAR 552.270-24 (JUNE 1985), reads, in pertinent part: (A) THE GOVERNMENT SHALL PAY ADDITIONAL RENT FOR ITS SHARE OF INCREASES IN REAL ESTATE TAXES OVER TAXES PAID FOR THE CALENDAR YEAR IN WHICH ITS LEASE COMMENCES (BASE YEAR). . . . (B) THE GOVERNMENT'S SHARE OF THE TAX INCREASE WILL BE BASED ON THE RATIO OF THE SQUARE FEET OCCUPIED BY THE GOVERNMENT TO THE TOTAL RENTABLE SQUARE FEET IN THE BUILDING. Appeal File, Exhibit 1 at 7; 48 CFR 552.270-24 (1987). 7. The SFO did not specify the tax parcels to which the term "real estate taxes" referred in subparagraph (A) of paragraph 23. PGC's representative who negotiated the lease and its counsel allege that the term "real estate taxes" is undefined both in the SFO and the resulting lease. Appeal File, Exhibit 1 at 7; Transcript at 23-24, 62. 8. There is no dispute as to the components used to determine the ratio in subparagraph (B) of paragraph 23. PGC's executive vice-president testified as to this ratio: The ratio is determined by taking the square feet leased by the Government pursuant to the lease and divided by the total square footage in the building, multiplied by a hundred to arrive at a percentage of occupancy of the space of the building by the Government. This, to my understanding, is not the subject of a difference between us and the Government. Transcript at 24. 9. James Smale, Supervisory Realty Specialist, National Capital Region, GSA, negotiated the lease on behalf of GSA. Before negotiations began, he determined that GSA would be leasing approximately 48,400 square feet3 in the Presidential Building. Mr. Smale also determined that the Code would require 193.6 parking spaces for the amount of space GSA would be leasing. He knew that PGC would charge $20 per month per space which would result in revenue of approximately $50,000 per year to PGC. He used the fact that PGC would receive this revenue in negotiating a reduction in PGC's offered rental rate of approximately $1 per square foot per month. Supplemental Appeal File, Exhibit 2B (Deposition Exhibit Smale 1); Transcript at 78- ____________________ 3 This 48,400 square feet area was computed in accordance with a methodology of the Washington Board of Realtors and translates into 44,000 net usable square feet (NUSF) as this term was defined in paragraph 25 of the lease. Transcript at 80. 80. He stated that the reason for negotiating this reduction was that the market data he possessed included free surface parking in its rental rates, and GSA would not receive free parking under the lease. Id. at 80-81. 10. PGC's executive vice-president testified concerning discussions of tax escalation during negotiation of the lease: The tax escalation was not an issue in the sense that it was always a given. It's even in the SFO, the solicitation for offers which is issued, and the only specific discussion that took place with this regard is that [GSA's representative] attempting to reduce the rental rate as he is charged to do on behalf of the Government was making the point that the Government and the Government employees would be leasing space. Transcript at 18-19. 11. PGC's executive vice-president testified that during performance of GSA's prior leases for the Presidential Building, appellant had been reimbursed for respondent's share of the real estate tax escalation costs levied on the four tax parcels located north of Toledo Road. However, during negotiation of the instant lease, the issue of whether GSA would be required under the terms of the lease to reimburse PGC for escalation in real estate taxes levied by the county on the four tax parcels situated north of Toledo Road was not discussed. PGC's executive vice-president was aware that GSA's representative who negotiated the lease had no knowledge of the configuration of the tax parcels. He testified as follows: Q [PGC's counsel]: Now you also mentioned that real estate taxes were discussed and real estate tax escalation and that [the GSA representative] said . . . you'll be protected by the tax escalation clause. Why don't you explain that . . .? A: The understanding of the discussion, at least my understanding, is that when in subsequent years we would get an increase in the real estate tax bills on the parking lot as well as the building, they would, the Government would pay its pro rata share of the increase. Q: At that time though, you weren't discussing this in terms of two tax parcels or six tax parcels? A: This was never an issue. I mean we have been dealing with the Government for -- I have been dealing with the Government for over a decade and whenever there was an escalation on this lease or on another lease, there was never to my recollection a problem with putting the parking lot with the building that I can recollect. Transcript at 20-21. Q [GSA's counsel]: When you negotiated [the lease] with [GSA's representative], do you specifically remember discussing tax escalations on the lots north of Toledo Road? A: Only in the context, as I stated earlier, that we would be protected on the escalation. Q: But we're not talking about being protected on the escalation. Did he specifically mention and you'll get your escalation on the lots north of Toledo Road? A: . . . No. There was no reason even to mention the lots. The parking lot was referenced as the parking lot. I don't think [GSA's representative] even knew there were four tax parcels at the time. Transcript at 52-53. 12. Under cross-examination, PGC's executive vice-president could not support his allegation that GSA had paid tax escalation on the four tax parcels north of Toledo Road during its previous leases. He had no recollection that tax escalation had even occurred. PGC offered no documentation to support the allegation that GSA paid real estate taxes on the four tax parcels containing the parking spaces north of Toledo Road, as appellant allegedly had not maintained its records under the prior leases with GSA. The relevant testimony and colloquy is as follows: Q [Judge Goodman]: . . . is there evidence in the appeal file that the Government was paying the proportionate share for all the parking spaces in the prior lease? A [PGC's counsel]: I don't think that can be determined from the schedules. A [GSA's counsel]: No, and that was what I was verifying, that there isn't anything. A: [PGC's executive vice-president]: I don't remember it being an issue. I mean 20-some years of occupancy of the building, I don't remember that being an issue. Q [GSA's counsel]: What I'm saying in response to that is we don't know whether it was an issue. For all we know, you may have agreed that the escalation didn't occur during the prior lease. Just as we have your memory that you've been receiving it. A [PGC's executive vice-president]: I can't argue with that. I'm getting up in age. Q [Judge Goodman]: In other words, the documentation that you have does not show one way or the other because . . .? A [PGC's counsel]: We have not maintained those records back that many years.4 Transcript at 59-60. 13. In response to PGC's discovery requests, GSA found no evidence of having previously paid PGC any money to compensate for taxes paid by PGC on the four tax parcels north of Toledo Road. Supplemental Appeal File, Exhibit 2 at 3 (unnumbered). 14. The lease was entered into after extensive negotiation, as evidenced by the testimony at the hearing and numerous handwritten and typewritten deletions and additions in the lease document itself, in the form of interlineation and riders. The parties' negotiations included the specific amounts of office space, storage space, and parking spaces to be occupied by GSA and the calculation of rent and operating costs. Transcript at 18, 21, 52-53, 80-81; Appeal File, Exhibit 1. The Lease 15. The lease contains the following documents: Standard Form 2, Riders 1-4, GSA Forms 3517 and 3518, and the SFO. Appeal File, Exhibit 1. 16. The leased premises were described in the lease as follows: The Lessor hereby leases to the Government the following described premises: A total of 45,356 net usable square feet of office and storage space in the Presidential Building, located at ____________________ 4 PGC did produce records of prior tax bills for the two tax parcels upon which the Presidential Building is situated and the four parcels north of Toledo Road. For the tax periods 1972- 1973 through 1973-1974, the total taxes on these parcels decreased. Tax bills were not found by PGC for 1974-1975. For the tax periods 1975-1976 through 1980-1981, the total real estate taxes on these parcels fluctuated, sometimes increasing and other times decreasing from period to period. For the tax periods 1981-1982 through 1985-1986, no real estate tax escalation occurred on these parcels, as the taxes decreased every period. Supplemental Appeal File, Exhibit 1. 6525 Belcrest Road, Hyattsville, Maryland consisting of 2,010 NUSF of storage space located on the ground floor, and office space as follows: 15,937 NUSF on the third floor, 5,912 on the fourth floor, 5,648 NUSF on the sixth floor, 12,080 NUSF on the seventh floor, 1,980 NUSF on the ninth floor, 1,789 NUSF on the tenth floor and 42 official vehicle parking spaces. Appeal File, Exhibit 1 at 1. 17. PGC and GSA entered into supplemental lease agreements (SLAs) during the lease term which adjusted the NUSF and the number of parking spaces leased by GSA. The number of parking spaces leased by GSA fluctuated during the lease term. The initial forty-two parking spaces increased to fifty as of December 2, 1987, to ninety-two spaces on June 10, 1988, and seventy-four since December 3, 1989. Additionally, SLA 16 provided and funded separately for twenty-five additional spaces from January 19, 1990, until May 22, 1990. Appeal File, Exhibit 2 at SLAs 2, 6, 16, 26; id., Exhibit 10 at 3. 18. The lease was silent as to whether the parking spaces leased by GSA were to be located in the parking areas adjacent to the Presidential Building or located in the parking areas north of Toledo Road. Testimony during the hearing established that the majority of the parking spaces leased by GSA were to be located in the parking areas north of Toledo Road rather than in those parking areas adjacent to the Presidential Building. Transcript at 35. However, there was no evidence submitted as to the number of tax parcels upon which these parking spaces were located. Paragraph 43 of the lease required that "IF PARKING IS PROVIDED, THEN AT LEAST ONE OR UP TO FOUR PERCENT OF THOSE SPACES CLOSEST TO THE BUILDING SHOULD BE DESIGNATED FOR USE BY THE PHYSICALLY HANDICAPPED." Appeal File, Exhibit 1 at 11. Paragraph 43 also required accessible routes from such designated parking spaces, public sidewalks and transportation stops. Id. 19. Paragraph 25 of the lease defined net usable square feet in the following language: NET USABLE SPACE IS THE METHOD OF MEASUREMENT FOR THE AREA FOR WHICH GSA WILL PAY A SQUARE FOOT RATE. IT IS DETERMINED AS FOLLOWS: IF THE SPACE IS ON A SINGLE TENANCY FLOOR, COMPUTE THE INSIDE GROSS AREA BY MEASURING BETWEEN THE INSIDE FINISH OF THE PERMANENT EXTERIOR BUILDING WALLS OR FROM THE FACE OF THE CONVECTORS (PIPES OR OTHER WALL HUNG FIXTURES) IF THE CONVECTOR OCCUPIES AT LEAST 50 PERCENT OF THE LENGTH OF EXTERIOR WALLS. IF THE SPACE IS ON A MULTIPLE TENANCY FLOOR, MEASURE FROM THE EXTERIOR BUILDING WALLS AS ABOVE AND TO THE ROOM SIDE FINISH OF THE FIXED CORRIDOR AND SHAFT WALLS AND/OR THE CENTER OF TENANT-SEPARATING PARTITIONS. IN ALL MEASUREMENTS, MAKE NO DEDUCTIONS FOR COLUMNS AND PROJECTIONS ENCLOSING THE STRUCTURAL ELEMENTS OF THE BUILDING AND DEDUCT THE FOLLOWING FROM THE GROSS AREA INCLUDING THEIR ENCLOSING WALLS: TOILETS AND LOUNGES, STAIRWELLS, ELEVATORS AND ESCALATOR SHAFTS, BUILDING EQUIPMENT AND SERVICE AREAS, ENTRANCE AND ELEVATOR LOBBIES, STACKS AND SHAFTS, AND CORRIDORS IN PLACE OR REQUIRED BY LOCAL CODE AND ORDINANCES. UNLESS OTHERWISE NOTED, ALL REFERENCES IN THIS SOLICITATION TO SQUARE FEET SHALL MEAN NET USABLE SQUARE FEET. Appeal File, Exhibit 1 at 8. 20. The period of the lease was January 1, 1987, through December 31, 1992, with rent of $52,666.67 per month, or $632,000 per year. Appeal File, Exhibit 1. 21. Paragraph 23 of the SFO, Tax Adjustment, GSAR 552.270- 24 (JUNE 1985), see Finding 6, was neither modified nor clarified during negotiation, except for the typewritten notation in the lease next to this paragraph that read: "SEE RIDER III." Appeal File, Exhibit 1 at 7. 22. Rider III of the lease reads, in pertinent part: The percentage of occupancy for tax purposes as referenced in paragraph 23 of SFO-87-018 will also be established upon final resolution of the total net usable square feet under lease after the relocations have been completed. Should the final total net usable square feet not be definitive at the effective dates for the above escalations then the net usable square feet under lease at the time will be used. A Supplemental Lease Agreement will be issued for purposes of incorporating the the [sic] final figures for the above escalations into the lease. Appeal File, Exhibit 1. Appellant's Claim for Increased Real Estate Taxes 23. In a letter dated November 27, 1991, PGC requested GSA to reimburse it in the amount of $43,682, which PGC alleged was respondent's cumulative share of the calendar year (CY) 1988-1991 real estate tax escalations assessed for the six tax parcels that contained the Presidential Building and the parking areas located north and south of Toledo Road.5 PGC believed that GSA owed tax escalation not only on the two tax parcels south of Toledo Road on which the building stood, but also on the four tax parcels north of Toledo Road containing parking, as "[t]his parking area is required by local authorities as part of the building requirements, and is considered part of the Presidential Building property." Appeal File, Exhibit 5. 24. Discussions occurred between PGC and GSA on the issue of the amount of tax escalation which GSA was obligated to pay under the lease. GSA took the position that it was only obligated to pay for tax escalation on the two parcels south of Toledo Road, which contained the building and adjacent parking, and denied liability for tax escalation on the four tax parcels containing parking north of Toledo Road. In a letter dated July 28, 1992, PGC accepted GSA's payment of tax escalation on the two parcels south of Toledo Road, and reserved its rights to appeal GSA's refusal to pay tax escalation on the four tax parcels north of Toledo Road. Appeal File, Exhibit 6. 25. By letter dated October 7, 1992, PGC submitted a claim requesting that GSA reimburse it for the CY 1988-1991 real estate tax escalations that it had paid Prince George's County for the four tax parcels north of Toledo Road, stating that "[t]hese tax parcels are associated with the parking areas required to meet county codes." The claim was submitted pursuant to the Contract Disputes Act and requested a contracting officer's final decision. Appeal File, Exhibit 7. 26. SLA 24 increased the amount of NUSF that respondent was to utilize under the lease from 45,356 NUSF to 73,056 NUSF and increased the number of official government parking spaces under the lease to seventy-four. In a letter dated October 16, 1992, appellant enclosed SLAs 25 and 26. SLA 25 established the combined real estate taxes for the two tax parcels south of Toledo Road for CY 1987 as being $282,024.55. SLA 26 established GSA's percentage of occupancy as required by Rider III and the annual real estate tax escalations for CYs 1988-1991 for a ____________________ 5 The $43,682 sought by PGC was composed of the following annual amounts: 1988, $4,538; 1989, $8,924; 1990, $12,389; and 1991, $17,831. cumulative total of $34,355.52 to be reimbursed by respondent.6 Appeal File, Exhibits 2, 8. 27. In a decision dated December 7, 1992, the contracting officer denied appellant's claim for tax escalation on the four tax parcels north of Toledo Road. Respondent denied appellant's claim stating, inter alia: Upon examination of the master plan, three existing buildings were shown; the subject building or Presidential Building, the Center Building and the Federal Building, as well as other future building sites proposed to be built in areas currently used by PGC as surface parking lots. The subject building was depicted, clearly situated within two tax parcels, located on the south side of Toledo Road. The other four tax parcels were identified as surface parking areas located north of Toledo Road. PGC contends the Government should pay taxes on these four tax parcels since the parking is required by County zoning. We have consulted with the Prince George's County taxing authority and have been advised that although a building owner may be required to provide specific parking in order to obtain occupancy permits by the County, the County does not require a building owner to allocate these spaces to a tenant. Further, in a lease scenario the Government is not subject to zoning regulations. ____________________ 6 The actual dollar values of the real estate tax escalations and the percentage of GSA occupancy for CYs 1988-1991 were as follows: CY88 CY89 CY90 CY91 ___________ ___________ ___________ ___________ Current Yr $300,470.87 $323,320.47 $337,544.96 $355,543.56 Base Yr ($282,024.85)($282,024.85)($282,024.85)($282,024.85) ___________ ___________ ___________ ___________ Ann. Increase $ 18,446.02 $ 41,295.62 $ 55,520.11 $ 73,518.71 % of Govt. 16.83% 19.66% 18.24% 17.69% Occupancy ___________ ___________ ___________ ___________ Govt. share of$ 3,104.47 $ 8,118.72 $ 10,126.87 $ 13,005.46 Tax Increase Note: The $282,024.85 was established in SLA 25 as the proper amount representing real estate taxes applicable to parcel number 17-65565-10-004 and parcel number 17-65565-02-004 in the base CY 1987. Appeal File, Exhibit 2, SLA 26. The four parcels[ ] located on the north side of Toledo Road comprise surface parking currently used by PGC for commercial parking. PGC charges Government employees and any other users of the lots monthly parking fees which produce income for these areas. These areas are not obligated to the Government by lease contract or agreement. Further, the collection of monthly fees by PGC does not imply an obligation on the part of the Government to pay real estate tax adjustments. The sale of parking permits is business income realized and recognized solely by PGC, the owners of the land. Therefore, any income so derived should support real estate taxes applicable to this property. Per SLA Nos. 25 and 26, the Government and PGC have established a real estate tax base on the two parcels identified as 17-65565-10-004 and 17-65565-02- 004, upon which the Presidential Building is situated. These parcels include approximately 111 parking spaces and are more than capable of meeting the Government's official parking needs. The Government requested parking spaces under lease and rental consideration only for official government vehicles. This number has varied from 42 in January 1, 1987 to 50 as of December 2, 1987, to 92 spaces on June 10, 1988, and 74 since December 3, 1989. Additionally, SLA No. 16 provided and funded separately for 25 additional spaces from January 19, 1990 until May 22, 1990. We have been further advised that the income paid by the Government to PGC for this office lease at the Presidential Building is allocated by the Prince George's County tax assessor to the two parcels that we have agreed to pay tax adjustments on. We believe that PGC is receiving fair, reasonable and appropriate reimbursement for real estate taxes under Lease GS-11B- 70037, based on the Government's pro-rata occupancy in the building. Appeal File, Exhibit 10. 28. On January 7, 1993, appellant filed a notice of appeal of the contracting officer's decision in which it requested relief in the amount of $6,537.48. The parties have requested a decision on entitlement.7 Appeal File, Exhibit 11. ____________________ 7 This amount of $6,537.48 represents the dollar value of GSA's alleged share of the CY 1988-1991 real estate tax escalations for the four tax parcels north of Toledo Road, based upon the percentage of GSA's occupancy of NUSF located in the Presidential Building to which PGC and GSA have agreed. See ___ Finding 26. Appellant and respondent have stipulated to this quantum in the event the Board finds entitlement. Discussion The Dispute The dispute concerns the term "real estate taxes" in paragraph 23 of the lease. The parties agree that GSA is required to pay a proportion, as determined by a specific ratio, of the increase in real estate taxes. The parties have agreed as to the ratio8 and stipulated as to quantum in the event the Board grants the appeal. Finding 28. They disagree as to the meaning of the term "real estate taxes." PGC argues that the term "real estate taxes" in paragraph 23 of the lease is not defined, and attempts to clarify the term by reference to an alleged prior course of dealing with GSA and to custom and trade practice. PGC contends that the amount of "real estate taxes" which GSA obligated itself to pay is its proportionate share of the increase in real estate taxes assessed on six tax parcels upon which the building and the parking required by local county code are located. In so doing, PGC argues that GSA's use of the parking is proportionate to its use of the building, and therefore argues that the "building" also encompasses all the parking required by code. PGC further argues that having clarified the term by a prior course of dealing with GSA and trade custom and usage, its interpretation is reasonable, in accord with the interpretation of the lease as a whole, and therefore must prevail. Finally, it argues that to the extent paragraph 23 is ambiguous, we should apply the rule of contra proferentem and construe the ambiguity against GSA, the alleged drafter. GSA maintains that "real estate taxes" is clearly defined in the lease, and it is obligated to pay only its proportionate share of the increase in real estate taxes on the two tax parcels upon which the building is actually located (which also contain 117 parking spaces), and not for the four tax parcels which contain the remaining parking spaces required by local code for the building. GSA argues that local code may have required the landlord to provide a specific number of parking spaces in proportion to leased space in the building, but the code does not require these spaces to be allocated to any specific tenant, nor did GSA lease all of these spaces. GSA believes its interpretation is the only reasonable interpretation. Tax Escalation and Other Terms Were the Subject of Negotiation The lease was the product of extensive negotiation, as evidenced by the testimony at the hearing, and numerous handwritten and typewritten deletions and additions in the ____________________ 8 Actually, they have agreed to a different ratio for each calendar year in dispute, as the total amount of NUSF leased by GSA fluctuated from year to year. Finding 26. document itself, in the form of interlineation and riders. Finding 14. The parties discussed the issue of tax escalation, but the subject of the tax parcels never was discussed, even though PGC's executive vice-president was aware of the tax parcel configuration and he knew GSA's representative was not aware of this information. Findings 10, 11. The parties negotiated the specific amounts of office space, storage space, and parking spaces to be occupied by GSA, and the calculation of base rent and operating costs. Under the lease as finally negotiated, GSA initially leased a specific amount of office and storage space in the building measured in net usable square feet and a specific number of "official vehicle parking spaces." Finding 16. The amount of office space and the number of parking spaces varied during the lease term. Parking spaces varied from an initial number of forty-two to a high of ninety-two as determined by supplemental lease agreements. Finding 17. As the parties espouse differing interpretations of paragraph 23, we must first determine if the lease clearly supports the interpretation of one of the parties or if the lease language is ambiguous, i.e., susceptible to more than one reasonable interpretation. If ambiguous, we must resolve the ambiguity in favor of one of the parties.9 The Language of the Lease is Clear and Unambiguous Paragraph 23 of the lease reads, in relevant part: (A) THE GOVERNMENT SHALL PAY ADDITIONAL RENT FOR ITS SHARE OF INCREASES IN REAL ESTATE TAXES OVER TAXES PAID FOR THE CALENDAR YEAR IN WHICH ITS LEASE COMMENCES (BASE YEAR). . . . ____________________ 9 PGC argues that if paragraph 23 is ambiguous, we must apply the rule of contra proferentem and construe the ambiguity __________________ against GSA, the drafter. However, where a contract is negotiated and bargained for, the principle that ambiguities must be construed against the drafter is not applied. Tulelake ________ Irrigation District v. United States, 342 F.2d 447 (Ct. Cl. ______________________________________ 1965). The rationale behind not applying this rule in negotiated contracts is that the "drafter" envisioned by the rule is one who unilaterally prepares a document which is not subject to negotiation. Washington Metropolitan Board of Trade, GSBCA LD- _______________________________________ 10, 74-2 BCA 10,681. The Government is not deemed to be the drafter of standard clauses which it includes in the initial document of negotiated contracts, when, as in the instant appeal, such clauses are subject to the other party's scrutiny and alleged ambiguities could therefore be clarified during negotiation. Tulelake Irrigation District, 342 F.2d at 453. ____________________________ (B) THE GOVERNMENT'S SHARE OF THE TAX INCREASE WILL BE BASED ON THE RATIO OF THE SQUARE FEET OCCUPIED BY THE GOVERNMENT TO THE TOTAL RENTABLE SQUARE FEET IN THE BUILDING. Finding 6. The parties do not dispute the calculation of this ratio. Finding 8. However, the parties dispute the import of this ratio. PGC argues that the term "real estate taxes" in subparagraph 23(A) is "undefined." PGC, therefore, views the ratio in subparagraph 23(B) as a means of measurement of an undefined term, "real estate taxes." On the other hand, GSA views the ratio not as a means of measurement of an undefined term, but as the definition of the term itself. We do not find that the term "real estate taxes" is undefined, as PGC contends, and the express language of the lease lends no support to PGC's interpretation. We agree with GSA that the language of paragraph 23 of the lease is clear and unambiguous as to the definition of GSA's share of the increase in real estate taxes to be paid as additional rent. Subparagraph (B) defines the increase to be paid, which is specified as a ratio of the square feet occupied by the Government to the total rentable square feet in the building. The ratio's reference to square feet is not qualified in any way, and under paragraph 25 of the lease, this reference is to net usable square feet. Finding 19. Net usable square feet was used to measure space in the building, with different methods prescribed for single and multiple tenancy floors, and was not used to measure parking spaces. Finding 16. Thus, the ratio which defines GSA's proportionate share of increases in real estate taxes makes no mention of parking spaces or total parking spaces allocated to the building. Accordingly, the clear meaning of paragraph 23 is that the ratio is to be applied to the tax parcels upon which the building is situated, and not to the additional parcels which contain only parking spaces. GSA's interpretation, that its share of the increase in real estate taxes to be paid is only its proportion of the real estate taxes levied on the parcels upon which the building is located, comports with the clear and unambiguous meaning of paragraph 23 and is reasonable. Finding 6. We find PGC's interpretation of paragraph 23 unreasonable for several reasons. As the ratio in subparagraph (B) defines the increase in real estate taxes to be paid by GSA, we do not find that "real estate taxes" is undefined, as PGC suggests.10 ____________________ 10 PGC admits it was aware of the tax parcel configuration at the time of contract negotiations, and that it also knew that (continued...) Also, in the first year of the lease, GSA leased approximately seventeen percent of the total square footage in the building as compared to approximately three percent of the total parking spaces required by local code. While GSA's total leased square footage and number of leased parking spaces fluctuated during the lease term, its percentage of square footage to total square footage in the building always greatly exceeded the percentage of leased parking spaces to the total number of parking spaces. Findings 16, 17. The number of parking spaces leased by GSA had no relation to the amount of office and storage space leased. Accordingly, PGC's argument that GSA's use of the parking is proportionate to its use of the building, and therefore the term "building" also encompasses the parking required by code, fails in light of this disparity. While the lease requires PGC, if parking was provided, to designate parking for the physically handicapped in the spaces closest to the building, Finding 18, we do not find such obligation to imply that GSA is occupying the entirety of the parking so as to obligate it to pay a proportionate share of real estate taxes on all parking associated with the building. ____________________ 10(...continued) GSA was unaware of this configuration. Even if one accepts PGC's contention that the term "real estate taxes" remained undefined after negotiations, PGC offers no satisfactory explanation as to why it did not attempt to supply a definition of the term to comport with this knowledge. PGC has Failed to Establish a Prior Course of Dealing or Trade Practice and Custom Despite the clear language of paragraph 23 of the lease, PGC has relied upon an alleged prior course of dealing with GSA and an alleged trade custom and practice by other tenants in an attempt to justify why paragraph 23 should be read to obligate GSA to pay tax escalation on the four parcels north of Toledo Road. With regard to the alleged prior course of dealing, PGC states that "the prior leases [between GSA and PGC] for The Presidential Building, as well as the leases for Center I and Center II had similar tax adjustment clauses" and that GSA "consistently paid tax escalation for the buildings and their associated parking." Appellant's Posthearing Brief at 10. PGC has not submitted to the Board copies of the prior leases, nor any documentation evidencing payment by GSA of tax escalation on the buildings and all parking spaces required by local code for the building. PGC alleges that its records as to GSA's payments have not been maintained for the period prior to the lease which is the subject of this appeal. Finding 12. Instead, PGC relies upon what it characterizes as the "unrebutted" testimony of its executive vice-president that "tax escalation was not an issue because it was always a given." Finding 10; Appellant's Posthearing Brief at 7. PGC's executive vice-president's direct testimony on the subject of GSA's prior payment was vague and stated in terms of his lack of recollection as to a problem arising previously on this issue. Finding 11. On cross-examination, PGC's executive vice-president testified that he did not remember if tax escalation had actually occurred prior to the instant lease, and it was possible that tax escalation had not occurred. Finding 12. PGC's records of prior tax bills show that for the tax periods 1972-1973 through 1973-1974, the total taxes decreased on the two parcels upon which the Presidential Building was situated and the four parcels for parking north of Toledo Road. Tax bills were not found by PGC for 1974-1975. For the tax periods 1975- 1976 through 1980-1981, the total real estate taxes on these parcels fluctuated, increasing and decreasing from period to period. For the tax periods 1981-1982 through 1985-1986, no real estate tax escalation occurred on these parcels, as the taxes decreased every period. Finding 12.11 Accordingly, PGC's ____________________ 11 PGC also contends that its alleged prior course of dealing with GSA is "corroborated" by the testimony of a Government witness, who also did not know if GSA had paid tax escalation on the parking lots north of Toledo Road during prior leases. Appellant's Posthearing Brief at 10. Testimony by two individuals disclaiming knowledge obviously does not support PGC's allegation that the event did in fact occur. allegation that GSA had "consistently paid" its proportionate share of tax escalation on all four tax parcels north of Toledo Road appears to be mere speculation, when viewed in light of PGC's lack of documentation supporting GSA's payment and its tax records which show decreasing and fluctuating real estate taxes on the six parcels since 1972 and decreasing real estate taxes (and therefore no tax escalation) during the five years immediately prior to the instant lease. PGC's argument as to trade custom and usage also fails. The use of trade practice or custom as a significant aid to interpretation must be predicated upon proof that the alleged trade practice or custom has become established to the extent it can be recognized as such. Davho Co., VACAB 1004, 73-1 BCA 9848. PGC alleges that "[a]ll other tenants of The Presidential Building, except for GSA, have paid their proportionate share of the real estate taxes for all six tax parcels . . . . This includes other United States Government tenants such as the Army Corps of Engineers and the U.S. Postal Service." Appellant's Posthearing Brief at 9. The fact that other tenants in the Presidential Building may each have paid their proportionate share of tax escalation on all six tax parcels is not sufficient proof to convince this Board that commercial tenants agree to pay a proportionate share of tax escalation as a matter of trade practice or custom. Conclusion GSA's interpretation of paragraph 23 of the lease is supported by the clear and unambiguous language contained therein. PGC's interpretation of paragraph 23 is unreasonable. PGC has not proved its alleged prior course of dealing with GSA nor the trade custom and usage which it has offered in an attempt to modify the clear meaning of paragraph 23. We will not, as appellant has attempted to do, ascribe a meaning to the language of the lease which is neither stated, expressly or by implication, within the four corners of the document, nor supported by the factual context in which the lease was negotiated and executed. See, e.g., Massachusetts Port Authority v. United States, 456 F.2d 782 (Ct. Cl. 1972). Decision The appeal is DENIED. ________________________ ALLAN H. GOODMAN Board Judge We concur: __________________________ ________________________ CATHERINE B. HYATT MARY ELLEN COSTER WILLIAMS Board Judge Board Judge