After Two Extensions, Lakeforest Mall Owner Unable to Buy Anchor Stores

After being granted two extensions by the Gaithersburg Mayor and City Council, the real estate investment firm that owns Lakeforest Mall has not been able to buy any of the mall’s four anchor stores.  

Lakeforest Mall is separated into eight parcels and has five landowners. The anchor stores J.C. Penney, Lord & Taylor, Macy’s and Sears own their own properties. WRS Inc. purchased the hallways and shop sites that connect the stores in 2019.

Macy’s is the only anchor store that is still open at the mall, however the companies that own J.C. Penney, Lord & Taylor and Sears still own the respective store areas.

In Aug. 2019 the mayor and council agreed to defer action on the mall and allow an 180-day moratorium on development to give WRS time to buy the major stores and make it easier to develop future plans. The moratorium also gave WRS time to negotiate with the city on a development agreement and execute it. 

By late Jan. 2020 WRS had not acquired any anchor stores, Gaithersburg Assistant City Manager Tom Lonergan said at a mayor and council work session Monday evening. The deferment and development agreements both expired in February and the mayor and council allowed two 90-day extensions for WRS to accomplish the goal, first on Feb. 18 and again on May 18. The current extension expires next Monday, Aug. 17. 

Gaithersburg Long Range Planning and the Gaithersburg Office of Economic Development do not recommend extending any agreements with WRS, and say that the city should amend the Lakeforest Mall map designation in the 2009 master plan. A map designation assesses priorities for redevelopment.

According to a memorandum from Long Range Planning, “a Map Designation could be limited to strictly a narrative that expresses elements to be included, or maybe more importantly – to be excluded, in any future redevelopment.”

Staff recommend that the city should move forward with a new map designation and a one-year moratorium on development applications to avoid any issues with receiving applications during the map designation process. The moratorium would be a pause on small-scale redevelopment that could occur while trying to develop Lakeforest’s greater vision. It prevents rezoning, resubdivision, and amendments and regulations that would impact the mall site. 

Gaithersburg Mayor Jud Ashman said he agrees with the staff recommendation and said the result of the map designation is worth the wait of the moratorium. 

“If it’s going to take a year of waiting, at least half of which is going to be before the COVID pandemic is passed and before we have a vaccine… I don’t see the opportunity cost here,” Ashman said.

Kevin Rogers, WRS executive vice president, said WRS is almost ready to complete purchases. 

“I have talked to all of the anchors this week… and we are ready to reinstate all of our purchase agreements, as are they, as soon as we nail down our financing which we are close to accomplishing,” Rogers said. In Oct. 2019 WRS had agreements with the four stores before they fell through in Jan. 2020.

Demetri Baches, design consultant with Metrocology, Inc. who was hired by WRS to look at the mall’s master planning, said the recommendation is a good one aside from the moratorium. He said WRS needs more time to gain control of anchor stores. 

“Even in good times projects this complicated can take a year to get capital… to assume that nothing has been done yet, and some sort of slackness on the part of WRS or an inability to do so is really sort of misthinking,” Baches said. 

“In a perfect world without COVID[-19] it could take longer than a year to do so.”

The mayor and city council will vote on how to proceed with the mall on Monday, Aug. 17.

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Maryam Shahzad

About Maryam Shahzad

Maryam is a reporter with Montgomery Community Media. She graduated from the University of Maryland in December with a bachelor's degree in broadcast journalism. Previously, she was an intern with MCM. Maryam loves visual media and always says the movie is better than the book. She can be reached at mshahzad@mymcmedia.org or on Twitter @maryam_mcm.

Comments

4 Responses to “After Two Extensions, Lakeforest Mall Owner Unable to Buy Anchor Stores”

  1. Avatar
    On August 12, 2020 at 4:22 am responded with... #

    What does this mean, what would have happened if WRS had bought the stores, and what will happen now?

  2. Avatar
    On August 12, 2020 at 11:42 am responded with... #

    Basically nothing will happen for a while. The problem is that anything they want to do would have to be done around the 4 stores making anything impractical.

  3. Avatar
    On August 12, 2020 at 6:41 pm responded with... #

    Please email me what will be the outcome of this mall we the mall in this area.
    Please save the mall.
    Thank you,
    Etty

  4. Avatar
    On August 13, 2020 at 9:50 am responded with... #

    The only place where the community can take a walk and eat.

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