Mall of Orange Files Lawsuit to Keep Its Broadway Open

SANTA ANA —  Operators of the Mall of Orange shopping center have filed suit to block the closure of the Broadway store there and to bar Broadway from continuing a going-out-of-business sale.

The lawsuit, filed in Orange County Superior Court, asserts that a 1971 lease agreement binds Broadway’s parent, Federated Department Stores, to operate a retail outlet at the mall for 60 years. The lease also prohibits going-out-of-business sales, the suit says.

If the Broadway does close, the mall is seeking at least $30 million in damages.

Officials at Orange Mall Development Associates and Federated Department Stores could not be reached for comment Monday.

Broadway is disputing the mall operator’s interpretation of the lease, the suit says.

Cincinnati-based Federated purchased the ailing 82-store Broadway chain in October and in November announced that it would close several of the stores and convert others into Federated’s stronger Macy’s and Bloomingdale’s outlets.

In Orange County, only the Mall of Orange Broadway was tabbed for closure. Federated said it would convert the Broadways at Brea Mall, Laguna Hills Mall and Crystal Court in Costa Mesa to Macy’s stores. The Broadway at Fashion Island Newport Beach will become Orange County’s only Bloomingdale’s. The fate of the Broadway at Huntington Beach Mall has not been disclosed.

It was just after Christmas that the Broadway at the Mall of Orange was draped with a huge banner proclaiming its going-out-of-business sale. Store employees were describing it Monday as a “liquidation sale.”

Shopping center operators say they don’t like such promotions, especially at anchor stores, because they tend to make mall customers uncomfortable about the health of the entire enterprise.