More city-based factory outlets a possibility


A settlement with the largest U.S. mall operator to limit the dominance of the Woodbury Common Premium Outlets center near New York City could lead to more factory outlets in the metropolitan area, New York state's attorney general said.

Simon Property Group Inc agreed to modify lease restrictions barring Woodbury Common tenants from opening new outlet stores within a 60-mile radius, and to stop using similar lease restrictions for 10 years.

The Indianapolis-based company also agreed to hire an independent monitor, and pay $945,000 to New York state.

According to an Assurance of Discontinuance, the maximum "radius restriction" will be reduced in most cases to 39 miles around Woodbury Common, which is located in Central Valley, New York, about 45 miles north of Manhattan.

The settlement also covers The Mills at Jersey Gardens, a Simon-operated mall in Elizabeth, New Jersey.

Attorney General Eric Schneiderman said tightening the radius restrictions would permit the opening of malls in the New York City boroughs of the Bronx, Brooklyn, Queens and Staten Island, making it less expensive for people to shop.

"Simon's anticompetitive conduct blocked competition and drove up prices for New York consumers," Schneiderman said in a statement. "That ends today."

In a statement, Simon said it never sought to limit competition, and that while Schneiderman's probe was "meritless" it had become an "unnecessary distraction."

Simon also said Woodbury Common has been an "economic engine" for Orange County and the Lower Hudson Valley, at a time many brick-and-mortar retailers are suffering from declining foot traffic as more people shop online.

The 60-mile restriction has been used since 1985, and continued after Simon took over Woodbury Common when it bought Chelsea Property Group Inc in 2004.

In 2010, the U.S. Federal Trade Commission ordered Simon to modify tenant leases to preserve outlet competition in the Chicago and Orlando, Florida areas.

Woodbury Common has more than 240 stores, including such names as Burberry, Coach, Gap, Nike, The North Face, Polo Ralph Lauren and Prada. It is popular with many international tourists, as well as New Yorkers.

 

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