Dillard’s sues LED alleging state backed out of $3.5M payment

Dillard’s at the former Cortana Mall, which is being converted into an Amazon distribution center. (File photo)

Dillard Department Stores, parent company of the Dillard’s chain, is suing Louisiana’s state economic development department and Louisiana Economic Development Secretary Don Pierson, alleging Pierson and LED reneged on a verbal agreement to pay the company $3.5 million. 

In a suit filed in Baton Rouge’s 19th Judicial District Court, Dillard claims the payment was meant to bridge the difference between what the company wanted for its former Cortana Mall location and what Amazon was willing to pay as part of its plan to redevelop the site for a new fulfillment center. 

“We believe the lawsuit’s claims regarding any agreement with LED, formal or informal, to be without merit, and look forward to the legal process running its course,” LED spokesperson Mark Lorando says in a prepared statement.

Dillard claims Pierson, during a meeting last November at the company’s Arkansas headquarters, promised to ensure the company was paid $3.5 million in exchange for agreeing to sell its Cortana property to Amazon for $6.5 million. Amazon didn’t want to set a precedent for its other real estate negotiations around the country by paying the full $10 million asking price, according to the lawsuit. 

“While there were different ideas of how to structure the $3.5 million deal with Dillard, there was an oral and what-would-be-pre-COVID a ‘handshake’ deal made that day,” the company alleges. 

In its suit, Dillard doesn’t cite documents in which Pierson explicitly acknowledges the alleged agreement, though it does mention emails in which other parties reference the supposed agreement and Pierson allegedly does not dispute the claim. The company also cites messages which purport to show Pierson discussing a possible job retention “award” to Dillard of $350,000 per year over 10 years, equaling a $3.5 million payout. 

“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 said in a prepared statement earlier this year. “The discussion pertained to alternative approaches to Dillard’s position with respect to the sale and closing of its store at the Cortana location.”

Dillard says it is entitled to the $3.5 million plus attorneys’ fees, court costs and possible additional damages.