Rouse prevails in upscale tug of war

Rival Florida mall won't block shops at Coral Gables site

March 27, 2002|By Meredith Cohn | Meredith Cohn,SUN STAFF

Affluent shoppers with a penchant for Gucci handbags and Prada shoes might soon be able to swipe their gold cards again and again along one short stretch of the South Florida seaboard.

The Rouse Co., the Columbia-based retail company, said yesterday that it settled a 2-year-old lawsuit in which it had contended that a competing mall was illegally preventing some of the world's best-known purveyors of upscale goods from also locating in a new Rouse mall 14 miles away.

Rouse plans a September opening for Village of Merrick Park in Coral Gables, Fla., recently touted by the company as a premier member of its portfolio. The new center will compete with Bal Harbour Shops, which has been the region's reigning luxury mall since 1965.

The population of Miami-Dade and Broward counties has skyrocketed in the past several decades to 3.6 million people and, with the increased traffic, the malls are as much as an hour and 15 minutes apart - more than enough people and space for both malls, the suit argued.

"The population in this area contains a significant number of consumers interested in purchasing luxury merchandise," according to the suit.

Covenants restricting how close a retailer can locate a second shop are common in mall leases, but Rouse claimed in its suit filed in U.S. District Court in Miami that the Bal Harbour leases were overly restrictive. The terms, which affected nonanchor specialty shops, violated federal and state antitrust laws, Rouse argued.

Both owners agreed in the settlement to allow tenants to immediately sign leases in each other's mall for the next 20 years.

"Merchants have long seen this area as two markets," said Jerome Smalley, executive vice president and director of development for Rouse. "We had already been attracting a very significant collection of luxury retailers to Merrick Park, and this increases our potential to attract more."

The new South Florida mall could generate sales per square foot that triple the industry average. Bal Harbour, an independent, family-owned mall, was expected to generate $1,350 a square foot in sales in 2000, according to the suit, dwarfing the industry average for shopping malls of $400 a square foot.

In a statement, Bal Harbour officials said they agreed to Rouse's demands "in exchange for getting back to business as usual." They also said, "Bal Harbour believes that this settlement will have no impact on its business. No single term in a lease is responsible for making Bal Harbour Shops one of the world's leading fashion destinations."

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