Dillard's Accuses Louisiana Economic Department of Breaking Promise to Pay $3.5M


Dillard's Accuses Louisiana Economic Department of Breaking Promise to Pay $3.5M
A Google Street View image of a Dillard's property at Cortana Mall in Baton Rouge, Louisiana. Dillard's has accused the Louisiana Department of Economic Development of failing to pay $3.5 million in an arrangement for Amazon to acquire the property. (© 2021 Google)

Dillard’s Inc. sued the Louisiana Department of Economic Development last week over allegations that it broke a verbal promise to pay the Little Rock department store chain $3.5 million.

The money was supposed to supplement Amazon’s offer of $6.5 million for Dillard’s property at the Cortana Mall in Baton Rouge, Louisiana. Amazon was acquiring the property at the site in 2020 to build a fulfillment center, according to Dillard’s lawsuit filed in Baton Rouge’s 19th Judicial District Court by the New Orleans law firm Sher Garner Cahill Richter Klein & Hilbert.

Dillard’s said in the suit that Don Pierson, secretary of the Louisiana Department of Economic Development, came to Dillard’s Little Rock headquarters in November 2020 and promised to pay Dillard’s $3.5 million if Dillard’s would sell its mall property to Amazon.

Dillard's lawsuit against Louisiana by Scott Carroll on Scribd

“While there were different ideas of how LED and the State of Louisiana would 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 suit said.

Dillard’s agreed to sell and announced it would close its mall location in April 2021, the suit said.

“And because of Amazon’s sensitivity to the purchase price, LED understood that there would be no mention of its side transaction with Dillard for $3.5 million in Dillard’s real estate purchase agreement with Amazon,” the suit said.

In June, the Louisiana governor’s office announced that Amazon was spending $200 million for a robotics fulfillment center that would bring more than 1,000 jobs.

Meanwhile, LED didn’t pay Dillard’s the $3.5 million it promised, Dillard’s said.

Dillard’s allegations in the lawsuit include bad faith breach of contract and misrepresentations. It has named LED and Pierson, individually and in his official capacity, as defendants. Dillard’s is seeking the $3.5 million plus other unspecified amounts for damages.

A spokesman for LED said in a statement to Arkansas Business, "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."