Palo Alto Landlord Sues Equinix

paix-rows

A look at the battery room in the Equinix (ex-Switch and Data) data center in Palo Alto, Calif.

It looks like the future of a major global connectivity hub may wind up in court. Last week the owners of 529 Bryant Street in Palo Alto, Calif. filed a lawsuit against Equinix, which operates an important Internet exchange point at the site. More than 100 networks connect with one another within the building, once known as the Palo Alto Internet Exchange (PAIX).

Landlord 529 Bryant Street Partners LLC filed suit Sept. 14 against Switch & Data CA Nine LLC, which leases the entire building, alleging that the tenant had breached "non-monetary obligations" under its lease that it must address. The suit also seeks monetary damages and "ejectment of tenant from the premises."

The landlord also sued Switch & Data Facilities Company, which was named as guarantor of the lease. Both Switch & Data entities were acquired by Equinix earlier this year.

Equinix Cites Settlement Talks
Equinix disclosed the lawsuit in an SEC filing Friday afternoon, saying it is in discussions with the landlord in hopes of settling the dispute, but intends to vigorously defend its interests. "We believe that the lawsuit as a whole lacks merit and that the remedies sought are excessive," said Equinix.

An actual eviction seems unlikely, as both landlord and tenant have a vested interest in maintaining the building as a viable Internet traffic hub. But the filing of the lawsuit indicates that the landlord is unhappy with the status of discussions on its grievances. Equinix did not offer additional details on the lawsuit or the specific clauses in the lease that are in contention.

Historic Internet Exchange Point
In 1996 the PAIX facility was established as the first major carrier-neutral Internet exchange point, providing connectivity from multiple fiber providers. That bucked the trend at a time when most major exchange points were owned or controlled by telecom companies.

The Palo Alto exchange was launched in the incubator labs of Digital Equipment, and its founders included Jay Adelson (who went on to found Equinix and Digg) and Paul Vixie (author of BIND and a key player in the DNS industry). The building served as the headquarters for DEC’s Alta Vista when it was the top Internet search engine.

In 1999 the PAIX operation was bought for $75 million by fiber provider Abovenet, which soon became Metromedia Fiber Network. MFN wound up in Chapter 11 in 2002, and Switch and Data stepped forward to purchase the PAIX assets from the bankruptcy court for $40 million. That deal formed the nucleus of Switch and Data’s interconnection business, which grew to more than 20,000 cross-connects prior to the company's acquisition.