Lord & Taylor has been an anchor at the mall since White Flint opened in 1977, and is now the last remaining store. It sued the mall’s owners, led by Lerner Enterprises, two years ago alleging that Lerner had breached a contract requiring that the mall remain open and operating.
Attorneys for Lord & Taylor asked the jury for more than $60 million in damages, but the mall’s owners argued they hadn’t violated the contract because they did everything they could to save the mall before deciding to redevelop it instead.
In the final days of the trial, at federal court in Greenbelt, both sides homed in on what the owners ought to have done in the years following the 2008 recession.
Though sales at the mall began to rebound after the plunging during the economic collapse, Bloomingdale’s informed White Flint in 2011 that it would be closing its store. At 260,000 square feet, Bloomingdale’s constituted around one-third of the entire mall. According to testimony, many of the other stores apparently relied on visits from Bloomingdale’s customers to keep their own businesses afloat.
Lord & Taylor argued that Lerner should have tried harder to keep Bloomingdale’s or else find another anchor store to replace it so the mall could remain mall open. Instead, attorneys for the upscale department store chain said Lerner allowed Bloomingdale’s to walk because it was already in the process of buying out other stores and preparing to demolish the mall.
Lerner officials “injected the poison that killed this mall” argued Michelle D. Gambino, attorney for Greenberg Traurig. As a result, she said Lord & Taylor was owed $35 million to build a new store and another $31 million to make up for lost sales the store incurred once the rest of the shops closed and demolition began.
“It sounds like a lot of money and it is a lot of money, but Lord & Taylor has lost a lot of money,” she said.
Lerner Enterprises founder and Washington Nationals owner Theodore N. Lerner did not testify but said in a deposition, from which attorneys read in court, that “it was not practical” to revive the mall.
“We tried very hard to lease it and to continue to lease it,” jurors were told Lerner said.
Experts called by the mall’s attorneys said that due to an array of factors, among them consolidation with the department store sector, competition from Internet sellers and changing customer preferences, that there was no way to re-lease and revive White Flint.
“When Bloomingdale’s closed, that was the end of White Flint Mall. There were no other anchors to replace them,” said Scott Morrison, with the legal firm Katten Muchin Rosenman, representing White Flint.
By the time Bloomindale’s closed in 2012, it was clear Lerner had moved on. That year Montgomery County initially approved the company’s plans to demolish all but Lord & Taylor and replace it with a series of new shops, apartments, hotels and office buildings.
Stores with remaining leases were asked to accept buy-outs or to add termination clauses to their leases. Though at its peak the mall had some 160 stores, once Bloomingdale’s left, the mall’s longtime manager, Desharri Bell, testified that the hallways were so empty some days that staff joked about it resembling a bowling alley.
Morrison said Lord & Taylor representatives participated willingly in planning the redevelopment of the mall and had indicated early on in the planning process that their store would do well in the town center project that White Flint’s owners envisioned.
Then the department store turned around and sued the owners, pointing to the 40-year-old contract requiring an “enclosed mall.”
“Lord & Taylor knows that it’s not going to lose money in the redevelopment,” Morrison argued.
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