Balch v. Leader Federal Bank

Philip D. Hour, Special Justice.

On May 13, 1970, the owner of four certain real estate lots in downtown Little Rock (the hotel lots) entered into a Net Ground Lease (ground lease) with a lessee who intended to construct a building on the lots for use as a hotel. The lessee owned four adjacent lots (the adjacent lots) which the lessee intended to use as a parking garage in conjunction with the hotel. Paragraph 17 of the ground lease contained the following language:

MORTGAGE OF THE FEE. The Lessor agrees that this lease will be subject and subordinate to the lien of first mortgage to be held by…