Prime Retail cleared for mall project U.S. court in W.Va. dismisses complaint from potential rival

Hagerstown mall project

Baltimore company was accused of getting inside data

July 27, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

A federal judge dismissed yesterday a West Virginia outlet mall's complaint that a Baltimore-based company misused confidential information to plan a rival outlet in Hagerstown.

The decision removes a major obstacle to Prime Retail Inc.'s construction of a 238,000-square-foot outlet mall by the end of 1997, company officials said.

"There was a cloud over the development of this project because of this trial," said David G. Phillips, executive vice president of operations, marketing and leasing for Prime Retail of Baltimore. "This decision lifts that cloud."

Blue Ridge Outlet Associates, operator of an outlet in Martinsburg, W.Va., tried to block Prime Retail's project in a federal suit filed in June of 1995.

Blue Ridge argued that Prime Retail used sales figures and other confidential information it obtained in 1993, as Prime Retail considered a $28.1 million purchase of Blue Ridge Outlet Center.

Phillips said Prime Retail, which subsequently abandoned its bid, has 19 outlets nationwide and frequent contact with merchants. "We have no need for other information," he said.

Prime Retail plans to build a Maryland Factory Shops at Interstate 81 and Route 65, about 25 miles north of the Blue Ridge Outlet Center, a 265,000-square-foot project with 58 outlets.

Construction of Prime Retail's outlet is expected to provide more than 500 employees. The outlet will have between 300 and 500 retail jobs. That number would increase with additional development of the project, which could reach 400,000 square feet.

Attempts to contact Blue Ridge Outlet Associates officials and the company's lawyers yesterday were unsuccessful.

jTC U.S. District Judge Frederick Stamp made the ruling after a four-day jury trial in Martinsburg. Attorneys for Blue Ridge Outlet Associates questioned about a dozen witnesses, said Frank Burch, an attorney for Prime Retail.

Yesterday morning, Prime Retail asked for a directed verdict, a ruling by the judge that Blue Ridge's case was so weak that it shouldn't go to the jury.

"We didn't believe they put on any testimony to show we had misused confidential information or that anything we had done had caused Blue Ridge damage," Burch said. "After a lengthy hearing, the court granted the motion without requiring us to put on any witnesses."

Phillips called it a "great day" for the company. "We feel great," he said. "This means we will be able to pursue the development with our full effort."

With 10 percent of the outlet already leased to 13 merchants and negotiations under way for another 12 percent, almost 22 percent of the space is committed.

"We typically don't break ground until we have over 50 percent," he said. "This decision will allow us to accelerate our leasing."

The decision also vindicates the management of Prime Retail, including Chief Executive Officer Abe Rosenthal, who testified in the trial, Phillips said.

Pub Date: 7/27/96

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