Judge's ruling on hold in Dillard's case
Last Updated: 14:26 July 26, 2013
After a daylong hearing in the eminent-domain case Thursday, Boulder District Court Judge D.D. Mallard asked for written closing arguments from attorneys for Dillard's (NYSE: DDS) and for the Longmont Urban Renewal Authority, or LURA.
From a legal standpoint, an $80 million redevelopment project at Twin Peaks Mall is expected to start if and when the title of Dillard's is granted to LURA. The urban-renewal authority is made up of Longmont City Council members.
Mallard gave both sides an early August deadline to submit closing arguments. Eminent domain is the legal right of a public entity to take property from an owner after appropriate compensation.
"It's a very interesting case. I think I understand the issues. It's very challenging for me," Mallard told the courtroom at the end of the day Thursday.
The new Village at the Peaks shopping center is slated to open at the Twin Peaks Mall site in early 2015. A 100,000-square-foot Sam's Club discount store and a 30,000-square-foot Whole Foods Market (Nasdaq: WFM) grocery store have signed on to anchor the new shopping center, along with a Regal Entertainment Group 12-screen, 2,500-seat movie theater.
A construction loan for redevelopment depends on mall owner NewMark Merrill Mountain States holding title to the Dillard's property, according to LURA attorney Robert Duncan. Once NewMark Merrill receives the construction loan, LURA has pledged $27.5 million to help with the project.
The compensation price for the building may be decided later by either Mallard, by a three-person commission, or by a jury, said Sarah Kellner, an attorney on the Dillard's side. Dillard's attorneys Thursday asked Mallard to name a jury. Mallard said she would issue a written ruling at an unspecified date on that issue as well.
The 94,000-square-foot Dillard's building and land were valued at $3.03 million in a city appraisal conducted in November. A Boulder County Assessor's Office appraisal assessed the property at $2.935 million for a two-year period ending in June 2012.
Dillard's holds veto rights to any redevelopment plan and owns its building. Dillard's vice president for real estate, Chris Johnson, on Thursday expressed frustration with negotiations with NewMark Merrill about possible redevelopment scenarios.
In addition, Johnson's attorney, Leslie Fields, said a decision to declare the area "blighted" was made in bad faith. Longmont has conducted several blight studies in recent years as part of the urban-renewal authority work.
"My store and property is fine," Johnson said. "I don't think it's blighted."
Johnson said he wasn't sure what impact a new Sam's Club store might have on the existing Dillard's department store's business. He said he didn't object to a new Whole Foods store, but didn't think it would drive traffic to the department store.
"The clock is ticking" for the redevelopment project, said Allen Ginsborg, managing director and principal at NewMark Merrill Mountain States. He called the existing mall "dilapidated" and said all existing tenants may be gone by the end of 2013.
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