After a legal dust-up this summer, it appears Lord & Taylor and White Flint Mall are headed toward a settlement that would keep the department store in the mall’s redevelopment plans.
In July, Lord & Taylor filed suit in federal court to stop Lerner Enterprises from rebuilding the site into a planned mixed-use development. The store claimed the redevelopment would violate the 1975 lease agreement that brought it to Rockville Pike.
In August, Lerner Enterprises fired back with a counter suit claiming millions in damages and saying the New York-based department store timed the lawsuit in order to get a settlement payment.
On Sept. 24, a federal judge granted White Flint’s motion for a partial summary judgement to settle the matter without a trial. The parties held a mediation conference on Oct. 8 in front of Chief Magistrate Judge William Connelly and two more mediation conferences before a follow-up scheduled for Friday, Nov. 8, according to court documents.
Connelly wrote that representatives from Hudson’s Bay Company (which owns and operates Lord & Taylor) and Lerner Enterprises will “review and discuss aspects of lord & Taylor’s continued tenancy at White Flint.”
A settlement hearing is scheduled for Dec. 20.
In September, Lord & Taylor responded to White Flint’s Mall counterclaim by saying “greed” was “White Flint’s driving motive in this case.”
As the mall prepares for redevelopment, most of its tenants have vacated. Lord & Taylor claimed many of those tenants have been pushed out.
Lord & Taylor also said White Flint misrepresented its position on the redevelopment. In its countersuit, White Flint Mall claimed the department store showed no sign of opposition to the redevelopment plan and had in fact engaged in conversations about how it would fit in to the new, mixed-use town center:
White Flint was on notice repeatedly of Lord & Taylor’s objection. To that end, White Flint submitted the preliminary Sketch Plan to the County on February 15, 2012. Almost immediately thereafter, on March 9, 2012, Lord & Taylor wrote to White Flint stating:
We are in receipt of the “Notice of Sketch Plan Application” dated February 15, 2012 in regard to the proposed redevelopment of the White Flint Mall in Kensington, MD. Please be advised that the proposed plan is in clear violation of the Construction, Operation, and Reciprocal Easement Agreement dated as of September 2, 1975. . . . Please take note that we do not consent to the plan and will fully and vigorously defend our rights in regard to this matter.
Lord & Taylor also said it had White Flint get a development consultant to figure out how the department store would fit in the redevelopment.
“All of the changes proposed by Lord & Taylor, however, were ultimately rejected,” Lord & Taylor claimed in its Sept. 5 motion to dismiss White Flint’s counterclaim. “As a result of this and what appeared to be an increasing effort on behalf of White Flint to empty out the existing Enclosed Shopping Center, Lord & Taylor sent a notice of default to White Flint outlining how the proposed redevelopment violated the REA, and asked White Flint to take steps to cure these issues.”
After White Flint did not respond, Lord & Taylor said it finally filed suit.
White Flint Mall’s preliminary plan for redevelopment is expected to go before the county’s Planning Board sometime before the end of the year.
The sketch plan, approved by the Planning Board last fall, calls for 5.22 million square feet of office, residential, retail and other uses around a town square with a new White Flint Neighborhood Park and space for a 400-student elementary school. The sketch plan showed the existing Lord and Taylor building remaining.
Earlier this year, White Flint Mall demolished the structure that was formerly home to Bloomingdale’s. In its counterclaim against Lord & Taylor, the mall said it’s negotiating to bring back Bloomingdale’s and is talking to a number of other potential anchor tenants.
The Cheesecake Factory, which serves as an anchor restaurant, is in the process of building a new space at Westfield Montgomery Mall. Employees said the restaurant hopes to be able to close the White Flint location and almost immediately make the move to Westfield in November.