Gaithersburg Approves One-Year Halt on Lakeforest Mall Development
Lakeforest Mall, Gaithersburg.
The Gaithersburg City Council approved a one-year maximum suspension of development on Lakeforest Mall property in order for the city to reassess redevelopment priorities.
Last week, city staff recommended that Gaithersburg approve a new map designation for the mall property and a one-year moratorium on development to avoid any issues with receiving applications during the designation process. A map designation assesses priorities and best use for redevelopment. The moratorium would be a pause on small-scale redevelopment that may occur while trying to work on Lakeforest’s greater vision. It prevents rezoning, resubdivision, and amendments and regulations that would impact the mall site.
The moratorium vote came because the city’s extended agreement with Lakeforest Mall’s owner expired Monday, and staff advised the council not to extend it again. 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.
As the city planned to redevelop the mall, 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, according to Gaithersburg Assistant City Manager Tom Lonergan. 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 second extension expired Monday, and WRS still had not leased any of the four anchor properties. At a mayor and council meeting Monday, members voted 4-1 in favor of the moratorium. Councilmember Robert Wu voted against it saying he supported the map designation but not the moratorium.
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WRS Executive Vice President Kevin Rogers spoke at the meeting and said the moratorium will make it harder to acquire the anchor stores. He said the owners might lease their spaces during the potentially year-long halt on new development.
“It’s my contention that if a moratorium was passed it will significantly impede our ability to acquire these anchors, and the results of the bad side of that bet, that gamble, would be more long-lasting and more damaging than the supposed risk and justification that you were given by staff,” Rogers said.
Councilmember Ryan Spiegel said the moratorium is not as bad as it sounds. He said while it is counterintuitive, it is not supposed to discourage development. Rather, it prohibits changes that could become an obstacle to bigger redevelopment.
Spiegel said the moratorium and map designation are meant “to ensure that after this next year of public engagement and map designation process, we will be able to invite a bigger, bolder, denser redevelopment of the mall area that we otherwise might risk if we don’t have the moratorium because of the possibility that some property owners in that area may try to take actions in the interim that could prevent that bigger, bolder development from happening.”
The moratorium is set to expire no later than Aug. 18, 2021.
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