Dillard’s is at odds with Louisiana Economic Development over terms of a deal that paved the way for the former Cortana Mall to become the site for a massive Amazon fulfillment center.
The Little Rock-based department store chain says LED officials made a verbal promise of financial assistance to facilitate the sale and claims the state is now reneging on the deal.
LED denies it agreed to make any payments to Dillard’s.
Dillard’s, confirming it was asking $10 million for the Cortana property that ultimately sold for $6.5 million, was known to be the lone holdout—and demanding the highest asking price—among the multiple Cortana Mall property owners individually negotiating with Amazon developer Seefried Industrial Properties in that company’s bid to redevelop the site into a 2.9 million-square-foot facility for the e-retail giant.
In mid-2020, with Seefried unable to come to terms with Dillard’s, it appeared the Amazon deal was dead. But last fall, another Cortana property owner, Mississippi businessman Wilson LaFoe, who had successfully negotiated with Dillard’s to buy his Virginia College building, arranged a meeting between the company and the state in hopes of jump-starting stalled talks.
The previously undisclosed meeting, held Nov. 12 in Little Rock, was also attended by Baton Rouge Area Foundation President and CEO John Davies.
“At the request of Wilson LaFoe, Dillard’s representatives met with Secretary (Don) Pierson and John Davies,” Dillard’s corporate spokesperson Julie Guymon said in a statement. “At the conclusion of the meeting, the state offered to help and assured Dillard’s representatives that they would close the deal so that, ultimately, the mall could be repurposed. Dillard’s relied on this assurance and moved forward to sell the property. Unfortunately, the state has since reneged on their offer of help.”
Guymon adds that representatives for the state “explicitly stated” at the meeting they would close the deal by ponying up an additional $3.5 million to help get Dillard’s to its $10 million asking price.
LED denies Pierson made any offer to Dillard’s at the meeting or agreed to help bridge the gap between what the company wanted and what Seefried was willing to pay.
The state agency does acknowledge the meeting took place and is aware of the claims Dillard’s is making.
“Secretary Pierson participated in a meeting on November 12 in Little Rock that included, among others, the Dillard’s CFO and a Dillard’s in-house lawyer, but there was no agreement, verbal or otherwise,” LED says in a statement. “The discussion pertained to alternative approaches to Dillard’s position with respect to the sale and closing of its store at the Cortana location.”
LED provided documents to Daily Report showing the “alternative approaches” Dillard’s proposed in an email to Pierson one week after the Nov. 12 meeting. None involved a $3.5 million payment, but they did suggest structuring a complex deal that would have enabled Dillard’s to monetize its assets at Cortana in other ways.
One proposal called for selling the 1.6-acre Tire Town parcel on the Dillard’s site to an undisclosed third-party, not Seefried, for an undisclosed price. Another, proposed selling all the inventory in the Dillard’s store to an unnamed third-party entity, which would then sell the property back to Dillard’s for a “nominal price.” A third option proposed selling the land and building to Seefried but selling all the improvements to a separate third-party entity for an undisclosed price.
According to LED, Pierson replied to the email, saying that LED was “working to develop an acceptable solution to the issue.” But the state never heard back from the company, which then entered into a purchase agreement with Seefried in December “without conditioning the closing on an agreement with LED.”
In late February, “more than 90 days after the Little Rock meeting and Dillard’s last communication with LED, Dillard’s contacted Pierson and provided a fourth “alternative approach” that proposed LED purchase all of the furniture, fixtures and equipment inside the Dillard’s building from the company on an “as is” basis for $4.5 million.
LED said no to the offer.
“Dillard’s was advised, on March 1, two days prior to the closing of the Cortana transaction, that the most recent proposal, similar to the three prior proposals, were not viable pathways for LED,” the LED statement says. “Dillard’s proceeded forward with the closing on its Cortana property on March 3.”
Dillard’s later reached out to the state to follow up on the earlier proposals, LED says.
“LED is aware that Dillard’s is claiming the existence of an oral agreement, which LED denies,” the statement says, adding that since the closing, Dillard’s and LED have had further discussions but that “nothing resulted from those discussions.”
LED has not yet responded to a public records request that would show the full extent of communications between Pierson and Dillard’s, so at this point the story raises more questions than it answers.
Unclear is how a major, publicly traded company like Dillard’s came away believing the state had offered a deal of financial assistance to make the Amazon deal possible. Also unknown is the role BRAF played in the negotiations and why Davies accompanied Pierson to the meeting, if not to offer help from the foundation or its real estate company, Commercial Properties Real Estate Trust.
Finally, why would Dillard’s, which rarely comments to the media, publicly allege it was wronged by the state if it wasn’t? Either way, what does it stand to gain now that the deal is done?
Two third-party witnesses to the meeting, who could help clarify matters, declined to comment. Davies said, “As you likely understand, I cannot comment on the story.”
LaFoe, who initially denied the meeting took place when reached last week by Daily Report, later said he had no additional comment.
“We’ve closed,” he said last week. “Everybody appears to be happy.”
He did not return calls, texts and emails today seeking comment.