As featured in Bethesda Magazine
Future of former shopping center site uncertain, attorney says
The two companies that own the former White Flint Mall property will not appeal the decision last month of the Fourth Circuit Court of Appeals that affirmed a $31 million verdict in favor of Lord & Taylor in a long-running breach of contract case.
Scott Morrison, who represented property owners Lerner Enterprises and The Tower Cos., said in an interview Sunday the owners could have asked the court to review the case again or try to have the Supreme Court consider it, but neither option was considered viable.
“We’ve paid the judgment,” Morrison said. “The bonds are being released.”
The payment brings to an end the legal battle that began in 2013 after Lord & Taylor contested the mall owners’ moves to close and demolish the mall to make a way for a major mixed-use redevelopment project. A Maryland District Court jury ruled in favor of the retailer in 2015 that the mall’s owners failed to honor an easement agreement with Lord & Taylor to maintain the mall as a “first-class” shopping destination until at least 2042.
Washington Business Journal first reported news about the payment Thursday.
As the legal case wound through the court system, the mall was demolished, leaving the Lord & Taylor store, which shared a wall with the mall, standing alone on the approximately 45-acre Rockville Pike site.
Morrison had previously said if the $31 million award stood, it would halt the planned redevelopment of the mall site. On Sunday, he said the owners would reassess the property given the development of other similar mixed-use projects nearby such as Federal Realty’s Pike & Rose.
“The White Flint planning has to start over,” Morrison said. “We now have to reevaluate three and a half years of successful development by competitors in the area. Now that litigation is over, the question is what you do with that site. You can’t make a decision about what to do until you begin and complete a complicated analysis about what’s happened to the market and where you want to go.”
He also said redevelopment would have been underway had Lord & Taylor cooperated with the mall’s owners rather than pursuing the lawsuit.
“I think the real tragedy here is that Lord & Taylor chose to litigate rather than continue its early cooperation to really allow White Flint to become a destination center,” Morrison said.
Lord & Taylor did not immediately respond to a request for comment sent to the retailer’s attorney Monday.
Despite the need for a new analysis, Morrison maintained that Lerner—one of the largest developers in the region—has the resources and expertise to make the site into a destination.
“It’s impossible to predict what the ultimate uses will be,” Morrison said. “But everybody at White Flint is optimistic that over time they’ll be able to create something that’s a very attractive new option for Montgomery County.”
He doubts that Lerner would consider selling the land, given that the debt on the land has “basically been paid off.” He anticipated it would take several years for the developers to rework the redevelopment plan for the site before any type of construction begins.
Previously, the Montgomery County Planning Board approved a sketch plan for the property outlining the construction of several buildings that would include 1 million square feet of office space, 2,400 residential units, 1 million square feet of retail space and a 280,000-square-foot hotel.
The former mall site is an integral part of the county’s White Flint Sector Plan, which was approved in 2010 and seeks to revitalize the strip mall-dominated retail area around Rockville Pike into a walkable, urban community where residents work, live, shop and visit entertainment.