The owners of White Flint Mall say Lord & Taylor timed a lawsuit to stop the mall’s redevelopment in order to get a settlement payment out of the Lerner family-owned shopping center.
In a countersuit filed Monday in federal court by White Flint Mall against the department store, the mall claims Lord & Taylor participated in talks about how it would fit into the new mixed use redevelopment as late as May of this year.
In July, Lord & Taylor filed suit to stop White Flint Mall from rebuilding the site into a planned mixed-use development. The New York-based department store said tearing down the mall would violate the 1975 lease agreement that brought it to Rockville Pike.
“In fact, from 2012 to May 2013, Lord & Taylor actively engaged White Flint in discussions about the location and operation of the Lord & Taylor store during and after construction of the proposed and vetted redevelopment. Lord & Taylor led White Flint to believe it was interested in being part of the redevelopment, which it knew would revitalize the White Flint area, attract quality tenant retailers, and increase foot traffic to its store. In late 2012, Lord & Taylor even recommended that the parties retain Lord & Taylor’s own development consultant, Street-Works, LLC, a real estate consulting firm specializing in mixed-use projects, to assist with a potential relocation of Lord & Taylor to a new site within the proposed redevelopment,” reads the countersuit.
Lord & Taylor claimed the redevelopment plans have led to a mall that is mostly vacant and that the plans violate a lease agreement that has the department store in the mall until 2055. White Flint Mall said waiting that long would kill the project.
The mall owners are asking for $1 billion in damages, as first reported by the Washington Business Journal.
In its countersuit, the owners of White Flint Mall claim their only requirement in the 1975 Lord & Taylor lease agreement is to continue operating White Flint as “a first-class high fashion shopping center.”
The countersuit contains a section arguing how traditional indoor shopping malls are no longer effective and how mixed-use redevelopment is necessary.
White Flint Mall claims it will invest $4 billion in the redevelopment project over the next 20 years and that it has already spent around $13 million in pre-development work and the demolition of the Bloomingdale’s department store.
It also claims it has signed or is close to signing contracts worth more than $24 million with architects, consultants, contractors and other vendors. According to the countersuit, the mall is in “an advanced stage” of negotiations with anchor tenants for the future property.
“Lord & Taylor timed its actions to maximize its perceived leverage in order to extract a payment from White Flint to get Lord & Taylor to drop its baseless objections so that the redevelopment can proceed,” reads the suit.
White Flint Mall also claims Lord & Taylor knew about the redevelopment by at least as early as 2009, and did not object until the mall received a letter from the store’s attorneys.
White Flint Mall got sketch plan approval for the project in October 2012 from the Montgomery County Planning Board. It must still submit a preliminary plan and site plan for approval.
Its countersuit against Lord & Taylor claims the lawsuit has delayed the process, resulting in damages.