A federal appeals court says the owners of White Flint Mall should be able to redevelop the property, despite a legal challenge from tenant Lord & Taylor.
The U.S. Court of Appeals for the Fourth Circuit upheld an earlier decision by a U.S. District Court judge that Lord & Taylor’s requested injunction to stop redevelopment of the property “would be unworkable in light of the already advanced stage of the project.”
Developer Lerner Enterprises plans to tear down much of the mall structure and develop it into a mixed-use, town center-oriented project as part of the larger redevelopment of the White Flint/Pike District area along Rockville Pike.
In October 2012, the county Planning Board approved Lerner’s sketch plan for the project, the first of three approvals necessary for redevelopment.
But planning for the redevelopment stalled in July 2013, when Lord & Taylor filed suit against the mall’s owners and asked for the court to stop any demolition. The New York-based department store claimed tearing down the mall would violate the 1975 lease agreement with the mall that brought it to Rockville Pike.
White Flint Mall’s owners filed a countersuit, claiming Lord & Taylor was well aware of the coming redevelopment and that it timed the lawsuit in order to get a settlement payment out of the Lerner family-owned shopping center.
District Court Judge Roger Titus ruled in favor of White Flint Mall. Lord & Taylor appealed and on Wednesday, the Court of Appeals upheld Titus’ ruling.
“Either the court would be required to supervise the repopulation and restoration of the largely vacant Mall, or the effect of its order would be to suspend the site in its current unusable state. We see no grounds for disturbing the district court’s reasoned exercise of its equitable discretion, and therefore affirm.”
Lord & Taylor is the only tenant left in the building. The mall won the court’s backing to terminate its lease with Dave & Buster’s after the food and entertainment chain filed a similar lawsuit.
Lerner Enterprises has been active in the overall redevelopment strategy for the White Flint area. But their progress on the mall redevelopment has been effectively stalled by Lord & Taylor and other legal challenges.
Their White Flint Mall redevelopment, more than 5 million square feet of apartments, office buildings, retail space, parks and a new elementary school, was viewed as one of the centerpiece projects spurred by the 2010 White Flint Sector Plan.
Montgomery County hopes the sector plan will urbanize an area of strip shopping centers and surface parking lots.
In recent months, Lerner officials have said there is no timeline for resuming the approval process for the project.
Appeals Court judges ruled that it would be unrealistic to return the mall to its former glory:
Like the district court, we must take account of the practical realities of the situation. At the time of the district court’s decision in December 2013, Bloomingdale’s had declined to renew its lease, and the building it occupied had been demolished. Much of the Mall itself was vacant, and according to Lord & Taylor, many of the remaining tenants were on short-term leases due to expire in 2014. Restoring the Mall to its former glory, as Lord & Taylor requested in Count II of its complaint, would have required more than a negative prohibition on the site’s redevelopment. It would have necessitated an affirmative injunction ordering White Flint to transform the now-fading Mall back into a “first class high fashion regional retail [s]hopping [c]enter” – the kind of order that is so hard to draft with specificity and then to enforce that Maryland courts generally will grant it only as a last resort.
