On August 21, 2017, New York Attorney General Eric T. Schneiderman announced that Simon Property Group settled claims that it used anti-competitive tactics to prevent development of competing outlet centers close to Woodbury Common center in New York. Leases with retailers at Woodbury Common included a clause preventing the retailers from opening another location within a 60 mile radius of the outlet center – a radius that encompassed the entire New York City area.
Simon Property, which owns Woodbury Common, agreed in the settlement to modify the contractual radius restrictions, which will allow retailers to open new locations in the New York City area. In particular, this change will allow new outlet malls to open in Brooklyn, the Bronx, Queens and Staten Island. The NY AG alleged outlet malls had been impeded from opening by the lack of retailers that could open locations in the area.
According to the NY AG’s statement, the radius restrictions had given Simon Property monopoly power in the market for retail space in outlet centers in the New York City area. Retailers and developers had both wanted to open new spaces within the area, encompassing 11,000 square miles, but were thwarted by the Woodbury Common lease restrictions.
In the settlement, Simon Property agreed to revise their existing leases with Woodbury Common retailers to remove the radius restrictions; not to engage in exclusionary tactics, including radius restrictions, for the next 10 years; and pay a $945,000 fine to New York state.