Image courtesy city of Cambridge/NBBJ

Attorneys for Alexandria Real Estate Equities defended the life science developer’s $65 million linkage payments to the city of Cambridge for a Kendall Square lab project, which are being challenged in court by the former owners of the property.

Canal Realty Trust, which is affiliated with the owners of Metropolitan Pipe & Supply Co., claims it was shortchanged in the $80 million real estate deal.

“While Alexandria is prepared to live by the contract, the Trust is not,” attorneys for Wilmer Cutler Pickering Hale and Dorr wrote in a Middlesex Superior Court filing. “It asks the Court to read the contract in a tortured way… that would effectively rewrite terms of the contract to yield a higher purchase price.”

In February, Banker & Tradesman was first to report that the sellers had lodged a civil suit against Pasadena-based Alexandria for allegedly underpaying for the 3.6-acre property.

Attorneys for Canal Realty Trust said Alexandria mischaracterized the total linkage payments Alexandria paid to obtain approvals from the city of Cambridge for a 370,000-square-foot development. The payments included Alexandria’s acquisition of a Fulkerson Street property from Eversource to be deeded to the city as a community benefit.

“The ‘cash payments’ are instead going to third parties. The parties to the Purchase Agreement certainly never contemplated that the ‘costs’ of the multi-million benefits to other major developers or to utility companies would ever be charged against the additional purchase price as mitigation of Alexandria’s development efforts,” attorneys for Canal Realty Trust wrote in a court filing.

Alexandria bought the plumbing supply company’s 70-year headquarters at 303 Binney St. in 2017, closing on the 3.6-acre parcel for $80.25 million. Metropolitan Pipe relocated to Somerville’s Inner Belt.

The dispute centers on an earn-out clause that Alexandria agreed to pay Canal Realty Trust if it successfully rezoned the property for additional density. According to the contract, that sum would be reduced by linkage payments that Alexandria paid to obtain its permits.

The Metropolitan Pipe owners say Alexandria improperly characterized $37 million of the $65 million that it tallied as linkage payments, including costs related to the Eversource project.

After a neighborhood outcry to a proposed Eversource substation on Fulkerson Street, Cambridge officials brokered a deal that paved the way both for redevelopment of the Metropolitan Pipe and Boston Properties’ Blue Garage property at 290 Binney St.

Boston Properties agreed to sell a portion of the Blue Garage property to Eversource for the substation, in exchange for approval of two 400,000-square-foot office-lab buildings on other sections of the property.

Alexandria agreed to provide temporary parking at its nearby properties to replace Blue Garage spaces lost during demolition and reconstruction. And Alexandria agreed to buy the originally-proposed substation site on Fulkerson Street for $12.3 million and deed it to the city for free as a community benefit.

In a motion to dismiss, Alexandria’s attorneys said the lawsuit mischaracterizes the purchase agreement and “attempts to rewrite the contract’s definition of linkage.”