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Those plans fell through, and now the retailer is suing the developer for $50 million to recoup the money Neiman Marcus says it lost because of the project.
Neiman Marcus filed a lawsuit on Tuesday, July 19, in Suffolk Superior Court against Simon Property Group, the owners of Copley Place mall.
Simon Property had planned to build a 52-story residential high-rise above the retail store at 5 Copley Place. But to do so, construction crews would need Neiman Marcus to shrink its floor plan to allow room for the planned support structures.
"Neiman Marcus reduced the square footage of its store, rearranged its remaining retail space, and moved a portion of its store to a separate area of the mall," the lawsuit says.
The company said it knew this would hurt business, but it would bear it because SPG promised Neiman Marcus a 400,000 square-foot store and $27 million to pay for renovations.
However, Simon put off its plans for the high-rise 10 months after signing the agreement with the retailer, the lawsuit says – leaving the store to operate in "subpar conditions" for six years.
Simon Property told Neiman Marcus it was unable to obtain all the necessary permits to begin construction, the retailer says in its lawsuit. However, SPG leaders gave a different reason for why it was holding off during an earnings call with analysts.
The company said it would “postpone the construction of the Copley Residential Tower due to the rapidly rising construction cost and our beginning concerns around supply and demand in the Boston residential market," the suit quotes the company's CEO as saying.
Neiman Marcus is suing for those $27 million Simon promised for renovations and millions of dollars in revenue the store lost because of the cramped conditions it had to endure.
Simon Properties has not responded to the filing as of yet. Click here to read the lawsuit.
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