Updated – 11:55 a.m. Sept. 4 – The attorney who represents White Flint Mall’s owners said Thursday the redevelopment of the mall will wait until there is a decision in the owners’ appeal of a recent court verdict in a contract dispute with Lord & Taylor.
“The redevelopment is dead,” attorney Scott Morrison said. “The only redevelopment activity that will occur prior to the decision of appeal is the mall will continue to be demolished and removed.”
Morrison’s comments reiterate what he said shortly after the verdict came down in August—that the $31 million verdict in favor of Lord & Taylor, which shares a wall with the mall, could stop the mall’s owners from redeveloping the 45-acre Rockville Pike mall site.
“If the judgment is not reversed,” Morrison said, “then the redevelopment that has been approved by Montgomery County and is an integral component of the Montgomery County White Flint Sector Plan will not occur.”
Attorneys for the mall’s owners—Lerner Enterprises and The Tower Cos.—filed a notice Tuesday in the U.S. Court of Appeals for the Fourth Circuit about their intention to appeal the jury’s verdict in U.S. District Court in Greenbelt last month that favored Lord & Taylor.
The jury ruled that the mall’s owners violated a contract with Lord & Taylor to maintain the enclosed mall as a first-class shopping center by closing it down and beginning its demolition.
Morrison said the appeals process may be completed by February or March 2016. Attorneys for the mall’s owners will argue that the District Court judge erred by not allowing the jury to consider future profits the Lord & Taylor store could earn if the massive town center redevelopment project planned for the mall occurs.
“Our primary argument is that the District Court precluded us from putting on any evidence that Lord & Taylor would significantly benefit financially from redevelopment,” Morrison said.
Attorneys for Lord & Taylor disputed Morrison's statements Friday.
"It is our view that the Defendant's counsel's comments are nothing more than legal posturing and scare tactics, designed perhaps to gain the public's and the court's sympathy even though the jury found that his client clearly breached their contract," David Barger, an attorney for Lord & Taylor, wrote in an emailed statement. "Also, at trial, in open court, they represented that they were going forward with the redevelopment and preparing to invest $800 [million] in it. They did not assert at trial that a verdict for Lord & Taylor would somehow stop the redevelopment. Their posture now is clearly contradictory to what they said in court."
Barger added in the statement that Lord & Taylor is confident the jury's verdict will be affirmed on the appeal.
Morrison said the $31 million judgment in favor of the retailer significantly hurts the ability of the mall owners to make the estimated $800 million redevelopment project profitable.
“Lord & Taylor will reap a huge windfall of $31 million,” Morrison said. “Many people do not appreciate the size and impact of the cost of that verdict going forward on the ability of [the mall’s owners] to redevelop that site.”
As the lawsuit, which was first filed in 2013, winds its way through yet more court proceedings, other developers are already well on their way to realizing portions of the White Flint Sector Plan, which increased height limits and density along Rockville Pike when it was approved by the county in 2010.
Federal Realty’s Pike & Rose has already completed its first phase and is well into construction of its second phase of development. Gables Residential received its final approval from the Montgomery County Planning Board for its 476-unit mixed-use project in April and The JBG Cos. received approvals in January for a revised North Bethesda Market II project, which features a 300-foot apartment tower. Saul Centers is also in the process of obtaining phased approvals for its project at the corner of Marinelli Road and Rockville Pike.
The other developers’ progress may foreshadow increased competition for Lerner and the Tower Cos. at the White Flint site, if or when the project is constructed.
When the project’s sketch plan was approved by the county in 2012, it called for 5.22 million square feet of residential, retail, office and hotel development, with building heights as high as 250 feet and a site for a future county elementary school.
Editor's note: This story was updated to include the statement from Lord & Taylor's attorneys.
