Dillard Department Stores has sued the Louisiana Department of Economic Development (LED), alleging that the department reneged on an oral agreement to provide $3.5 million as part of a deal to bring an Amazon warehouse to Baton Rouge.
The Arkansas-based company is suing LED and its secretary, Don Pierson, in the 19th Judicial District Court for bad faith and breach of contract related to the proposed sale of a Dillard store at the Cortana Mall in Baton Rouge. The plaintiff, which wanted Amazon to pay $10 million for the property, alleges the LED made a “handshake” agreement to provide the $3.5 million to Dillard to supplement Amazon’s offer to pay $6.5 million for the site.
Mark Lorando, the LED’s spokesman, denied the charges contained in the Nov. 12 lawsuit.
“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,” Lorando said in an email to the Louisiana Record.
The lawsuit seeks payment of what it says is the promised $3.5 million, along with interest accrued since last year’s negotiations and attorney fees.
Locating an Amazon fulfillment center in Baton Rouge would have provided at least 1,000 jobs for the community, as well as hundreds of millions of dollars in investment, according to the complaint. A letter of intent from Pierson indicated that $5 million to $10 million in funding would be available for site development, the lawsuit states.
The complaint describes a Nov. 12, 2020, meeting at Dillard’s headquarters in Little Rock in which Dillard agreed to sell its site at the Cortana Mall to Amazon for $6.5 million, provided DED provided the balance of the desired $10 million sale price.
“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 lawsuit says.
Amazon did not want to be seen as paying what it considered an excessive price, $10 million, for the site in public records, according to the complaint. The company was also concerned about keeping such details confidential, the lawsuit says.
The Amazon deal was announced publicly by Gov. John Bel Edwards on June 16 of this year. The company’s robotics fulfillment center is now set to open in December of next year and will provide an economic boost for a section of Baton Rouge, according to a news release from Entergy Corp.