Lord & Taylor at White Flint Mall Credit: Andrew Metcalf

Attorneys for White Flint Mall and Lord & Taylor made their final pleas to the jury Wednesday in what has become a landmark local case over a major redevelopment project.

The case has pitted titans against each other—the retail giant Lord & Taylor versus the mall’s owners, Lerner Enterprises and The Tower Cos.

The trial has played out for the past two-and-a half-weeks in U.S. District Court in Greenbelt. At 2 p.m. the case went to the jury, which now  will decide the outcome.

At the center of the dispute is a 1975 easement agreement, signed by Ted Lerner, head of Lerner Enterprises, in which Lord & Taylor agreed to build its store on the mall site as long as the owners maintained the mall as a “first-class” shopping center until at least 2042.

Lord & Taylor claims that Lerner Enterprises and The Tower Cos. violated the agreement by closing the mall and pursuing a plan to redevelop the entire site into a 5.2 million-square-foot mixed-use town center.

Michelle Gambino, an attorney representing Lord & Taylor, said during her closing statements the owners breached the agreement multiple times—first by not attempting to save the struggling mall, then by letting the tenants leave and finally by closing it and beginning demolition.

She said that about a decade ago 1.3 million customers entered the Lord & Taylor store at White Flint annually, but this year the store is projected to welcome less than 300,000 shoppers.

Gambino said the mall’s owners deliberately shooed the tenants out of the mall so they could redevelop the site and make more money.

“This case is about arrogance and White Flint’s desire to make billions,” Gambino said.  “They injected the poison into this mall and you need to hold them accountable. Today is the opportunity to hold them accountable.”

Gambino implored the jury to award the retailer about $66 million in damages. She said this comes from a $35 million estimate to rebuild the store as well as an estimated $31 million in lost profits.

Scott Morrison, an attorney representing the mall’s owners, argued in his closing statement that the mall had no choice but to pursue redevelopment.

“The key issue here,” Morrison said, “is whether White Flint deliberately took a vibrant, successful mall and ran it into the ground so it can have the pleasure of spending $800 million to redevelop it.”

Morrison said that from 2003 to 2012, the year the mall’s largest tenant Bloomingdale’s left, the mall’s net operating income dropped from $9 million to $2 million. He said the mall began losing money in 2013.

He added that from 2005 to 2013 the mall’s gross sales dropped from about $180 million to $76 million.

“White Flint became a dinosaur,” Morrison said. “You had a tidal wave change affecting enclosed malls coupled with a change in consumer preference.”

Throughout his closing statement, Morrison referred to the once highly profitable shopping center as a “dead mall.” He listed several statistics and factors related to the decline of enclosed malls across the country:

  • Of the approximately 1,000 enclosed malls built since 1975, he said 550 had died, failed financially or were redeveloped

  • The internet became a major retail player that took sales from once popular mall tenants such as bookstores

  • The 2008 recession significantly hurt the profitability of many malls, including White Flint

  • Customers were shopping more frequently at large open-air shopping centers

The real end for White Flint mall, Morrison said, was when Bloomingdale’s left its 260,000 square-foot space in 2012. He read off testimony from a senior mall employee who said once that happened the mall lost its vibrancy.

Morrison also cited the testimony of former Bloomingdale’s CEO and Chairman Mike Gould, who said the White Flint store’s revenue was declining and the retailer planned to move to Chevy Chase to pursue what it perceived as better local demographics for its store.

“What does the contract say happens when the mall fails?” Morrison asked. “See if there’s anything in there that addresses any of these realities.”

He said a redeveloped mixed-use shopping center had the potential to attract 12 million customers per year and could be a boon for Lord & Taylor.

He also questioned how Lord & Taylor came up with its demand for damages.

“They want you to give them the biggest windfall in the history of retail,” Morrison said.

David Barger, an attorney for Lord & Taylor, had the final word during closing arguments. He said despite what Morrison said about the struggles the mall faced, the owners had an opportunity to turn it around.

He pointed to the work Westfield Montgomery mall has done to position itself for future growth. However, the owners didn’t want to renovate the mall, he said, they wanted to redevelop it.

“They destroyed that mall to make more money,” Barger said. “Now for 20 years, Lord & Taylor will face construction, dirt and an impact on their store.”