The Gaithersburg City Council on Monday granted a South Carolina developer another 90-day extension to buy the four anchor properties of Lakeforest Mall. The company said the coronavirus health crisis has hampered the purchase.
The developer WRS Inc. bought the mall property last summer, but not the four anchor properties. Before the purchase, city leaders planned to conduct a planning study on the property to determine the best use and to impose a yearlong development moratorium.
WRS has opposed the moratorium, arguing that it will drive away investors and lenders.
The city delayed its plans for the study and moratorium at its Sept. 20 meeting, when the council gave WRS 150 days to acquire the anchor properties and determine a future use of the mall. When that time period expired in February, WRS asked for a 90-day extension because it hadn’t acquired the anchor properties by the deadline due to the properties falling out of contract.
The city gave WRS the extension at its Feb. 18 meeting. Some council members were reluctant because the developer failed to meet the original deadline and hadn’t communicated with the city about its plans for the property. That extension expires on Thursday.
On Monday, WRS Executive Vice President Kevin Rogers said during the City Council’s virtual meeting that the financial challenges of the retail industry during the coronavirus pandemic have slowed down the process of acquiring the anchors.
“To say a curveball’s been thrown at us is an understatement,” he said.
Three of the four anchors, Lord & Taylor, J.C. Penney and Sears, have closed. But the companies still own the parcels.
J.C. Penney announced this month that it is filing for bankruptcy. Lord & Taylor might also, according to a report from Reuters. Sears filed for bankruptcy in 2018.
Macy’s, the only anchor tenant still operating at the mall, announced before the health crisis that it plans to close 125 stores in the next three years.
Mayor Jud Ashman said on Monday that he was sympathetic to WRS’s current problems in consolidating the anchors.
“If I had gone by the council statements in February, I would have expected there would have been a lot of holding feet to fire. But obviously some things have happened in the world that have changed the equation on everything,” he said.
Council Member Neil Harris said he, too, understood the difficulties of the retail environment during the pandemic.
“The challenges keep getting greater for you, so I don’t know how much farther we go on the road with this, given the current circumstances. But you’ll fill us in as we continue to talk,” he said.
Council Member Ryan Spiegel said he also supported another 90-day extension, but worries that a deal seems less likely as the economy suffers during the health crisis.
“With the bankruptcies and the state of the economy, I’m rooting for you, but I’m not optimistic this is something that’s gonna be pulled off in the next 90 days,” he said.
Dan Schere can be reached at daniel.schere@moco360.media
