Theodore Lerner's partners in Wheaton Plaza are suing the developer for $30 million and asking that he be forced out of the partnership, alleging among other things, that Lerner has acted "to paralyze" the shopping center to shore up business at his White Flint Mall.
The partners, the Gudelsky Brothers Partnership, H. Max Ammerman and Simon Sherman, allege in the case filed last week in Montgomery County Circuit Court that Lerner is attempting to block construction at Wheaton Plaza of a$15 million Hecht's store, worth $32 million in annual sales. According to the papers, the store would be expected to bring millions of dollars in rents to the partnership. They have asked for a speedy pretrial conference on the questions of mall management.
The partners requested a separate trial on their request to dissolve the partnership and their request for $10 million in compensatory damages, $20 million in punitive damages and a court order to stop Lerner "from any actions which may interfere with the business and affairs of Wheaton Plaza."
After agreeing to an interview with The Washington Post, Lerner canceled the appointment yesterday, citing the advice of his attorney, Jacob A. Stein.
Stein also represents Lerner in a $56 million lawsuit brought in Montgomery Circuit Court by his brother, Lawrence E. Lerner, 52.
Lawrence Lerner alleges his 59-year-old brother defrauded Lawrence Lerner of tens of millions of dollars in the family business, Lerner Corp. Theodore Lerner, who an associate estimates is worth up to $350 million, owns 70 percent of that business; Lawrence Lerner, a pharmacist, owns 26 percent. Lawrence Lerner also alleges that Theodore seeks to force him to sell out.
Ironically, it was Lerner's association with the family of Isadore Gudelsky, the one-time Baltimore junk dealer who built a a vast construction and real estate empire in the Maryland and Virginia suburbs, that provided Lerner with his entree into commercial real estate.
Thirty years ago, Gudelsky brought Lerner into the Wheaton Plaza partnership by allowing him to purchase an 11 percent interest.
Gudelsky also allowed Lerner to buy 25 percent of the Tysons Corner shopping center and a quarter of the Tysons II tract, a 117-acre site adjacent to Tysons Corner Shopping Center. At the time the partnership was formed in 1955, the Gudelsky brothers, Isadore, Harry and Homer each owned27 percent; Ammerman owned3 percent; Sherman,5 percent; and Lerner 11 percent.
Formed to develop Wheaton Plaza, one of the first shopping malls built in the nation, the partnership was bound by an agreement that stipulated that decisions were to be made by a majority vote of the six original partners.
According to papers filed in the suit, Lerner contends that the deaths of Harry and Isadore in the early 1960s, and formation of the Gudelsky Brothers Partnership to husband their shares and that of Homer, the surviving brother, has left Lerner, Ammerman and Sherman, the only "original partners" with voting rights.
Trouble arose among the Wheaton Plaza partners in 1974 when they decided to enclose the 79-acre open-air mall to enhance and update its appearance, according to the court complaint. But Lerner, who had acquired substantial interest in White Flint, an opulent mall less than five miles from the Wheaton shopping center, caused an eight-year delay that multiplied the cost of the enclosure, according to the court complaint.
Annoyed by Lerner's objections to the mall enclosure, the partners in March 1983 fired the Lerner Corp. as manager of Wheaton Plaza, according to the lawsuit, an action that Lerner unsuccessfully challenged in Montgomery Circuit Court.
Lerner's effort last April to block a Wheaton Plaza lease for the Hecht's store triggered the filing of the lawsuit on May 29, according to Ammerman.
"Lerner's attorney wrote the May Company the owner of Hecht's to try to discourage their coming into the center, stating that he had control and he hadn't consented to it. He effectively stopped the proceedings toward getting a lease -- they don't want to start to build a store and stock it, only then to find out we didn't have the right to give it to them," said Ammerman, who in 1981 dissolved his 18-year partnership with Lerner on Tysons II. Lerner bought out Ammerman and Homer Gudelsky's rights to the property for $21 million. Since then, work has begun on a $550 million project there.
Like Ammerman, Sherman's long-standing relationship with Lerner has grown icy, he said.
"And I guess this lawsuit hasn't bettered our relationship," Sherman said. "It's sad, it's unfortunate that things have to be this way. We've tried to talk it over and it didn't work, so this was the only thing we could do."