Lord & Taylor is "seriously" interested in occupying the Garfinckel's flagship store at 14th & F streets NW and has held preliminary talks with the building's owners, according to Washington retailers, real estate developers and city planners.
At the same time, the upscale retail chain -- which is owned by the St. Louis-based May Department Stores Co. -- is attempting to get out of its long-term lease and close its store across the street from the Seven Corners Shopping Center in Falls Church, sources said.
The move could be a boost to a downtown retail core reeling from the closing of Garfinckel's, which filed for bankruptcy protection in June. Now, only Hecht Co., also a May Co. division, and Woodward & Lothrop are left downtown, of the major department stores.
Lord & Taylor, a 47-store specialty chain in the midst of a major expansion, has five stores in the area -- free-standing branches in Chevy Chase and Falls Church and mall locations in White Flint, Fair Oaks and a new store in Tysons Corner Center.
"They feel there is a market downtown, and they are the ones that want that spot the most," said one local real estate executive familiar with the situation.
One lawyer close to the Seven Corners negotiations said Lord & Taylor would abandon Seven Corners as soon as it can negotiate out of its lease.
Lord & Taylor declined comment on either possibility. "We never make any speculation about new stores," said a spokeswoman. "We're a strong retail chain and everybody wants us to open in lots of places."
But the chain has wanted to open a downtown store and tried quite recently. It was involved in a three-year effort to be part of a three-level retail-office complex at 12th & G streets NW. But by late 1988, attempts to resolve financial and design differences between the store and developers failed.
"I know they were very interested since Hecht's had done so well ... ," said Robert Linowes of Linowes and Blocher, a Washington law firm that represented Lord & Taylor in the 1988 attempt to come downtown. "...If they can move into a building with reasonable costs, there is a desire by them, I think."
The District has the same desire. "We are always exploring and very much interested in lots of retailers," said Wiley Williams, D.C.'s deputy mayor for economic development. "I cannot comment on specific retailers."
Any new store opening might take a while, however. According to sources close to the bankruptcy proceedings, Garfinckel's Inc. still owns the site's long-term lease, which was renegotiated this year. The store is paying close to $2.2 million a year, or about $24 a square foot, a rent considered high for a big store.
Sources speculate that no one would pay that much and expect Garfinckel's and its creditors to reject the lease after the store closes at the end of August to avoid additional rent costs.
Control of the lease will then revert to the building owner, Garfinckel's Real Estate, a separate company from the Garfinckel's stores, which can then negotiate a deal.
Another retailer being suggested by many for the location is J.C. Penney, the Texas-based middle-market department store chain. But Penney officials doubt that possibility.
"It would be a rarity for J.C. Penney to locate in a downtown area since we need so much parking and other things ...," said Henry Rusman, who runs J.C. Penney's real estate division.