Lord & Taylor, Llc, v. White Flint, L.P.

780 F.3d 211 (4th Cir. 2015)

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Nature of the Case

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Facts

D opened discussions with P and Bloomingdale's about the development of what would become a Mall. P and Bloomingdale's agreed to lease land immediately adjacent to the Mall and serve as retail 'anchor' tenants. D agreed that it would construct and then maintain a 'first-class high fashion regional shopping center,' on the Mall property. The parties memorialized their understanding in a reciprocal easement agreement (REA), committing D to the continued operation of a three-story, enclosed mall on the site, and detailing the layout of the Mall and its surrounding internal roadways and parking areas. Most of the site may be used only for retail purposes, and D may build additional structures only with P's consent. Any changes to the Mall, including alterations to its 'architectural design or appearance,' also must be approved by D. All of these conditions are treated by the REA as restrictive covenants that 'run with the Land,' creating rights in real property. They remain operative at least through 2042, and P may extend them until 2057 by exercising its final lease-renewal option. In 2012, Bloomingdale's opted not to renew its lease at the Mall site. By 2013, 75 percent of Mall tenants, had left. The Bloomingdale's building has been demolished, and the remaining businesses have closed. The Mall was shuttered permanently on January 4, 2015, and P alone remains open for business. In November 2011, D released a preliminary plan to redevelop the site. It will transform the area, anchored by a station of the Washington metropolitan area subway, into a 430-acre urban center, with 14,000 new residential units and 7.5 million square feet of new mixed-use space. Execution of the Sector Plan is expected to involve $1 billion in new public works and eventually to generate $40 billion in additional tax revenue. D's plan would transform the Mall site into a mixed-use development increasingly popular across the country, with a 45-acre town center including 2,400 apartment units, parks and schools, a hotel, and at least three high-rise office buildings. P's store would remain, but the enclosed Mall would be demolished, along with portions of the parking lots and internal roadways. P objected in that it was promised a 'first-class shopping center.' P sought declaratory relief that the REA precludes D from redeveloping the Mall site as contemplated by the Sketch Plan and instead requires d to continue operation of a 'first-class high fashion retail shopping center.' P seeks a permanent injunction compelling D to honor the terms of the REA. D moved for partial summary judgment with respect to the injunction. It argued, in part, that it would be infeasible for the district court to enforce an injunction requiring what was at the time a mostly empty Mall to resume operations, and then to maintain its status as a 'first-class high fashion shopping center' until as late as 2057. The district court concluded that injunctive relief would be infeasible under the circumstances as it would require constant supervision by the court. P appealed.