Jury Awards Caruso $15 million

Caruso Affiliated weathered a 2004 ballot referendum to approve its Americana at Brand shopping center in Glendale, Calif.

On Nov. 13, the real estate developer realized another legal victory.

A Los Angeles Superior Court jury ordered the owner of Glendale Galleria, a neighbor of the Americana at Brand, to pay $15 million in punitive damages to Americana developer Rick Caruso. Caruso accused General Growth Properties Inc. of illegally threatening the Cheesecake Factory restaurant chain after it showed interest in opening at the Americana. The Galleria was said to be courting the restaurant, too.

The Cheesecake Factory signed a 2003 letter of intent to negotiate a lease at Americana. The restaurant signed an Americana lease in February 2007, but Caruso said the lag in time marred negotiations with other retailers.

The jury also awarded Caruso $74 million in compensatory damages on Nov. 8. General Growth attorneys denied that the Chicago-based real estate development trust lobbied the restaurant against dealing with its competition. They plan to appeal the awards and the rulings.

The award for punitive damages was one of the biggest in the world of legal proceedings with developers, according to Larry Kosmont, president of Encino, Calif.–based Kosmont Cos. and an expert in public and private real estate development. “It’s a message. You had a jury that felt there was an unjustifiable interference,” Kosmont said.

The Americana at Brand is scheduled to open April 2008. In addition to the Cheesecake Factory, the 475,000-square-foot shopping center will have a True Religion boutique, a Barneys New York Co-op, a Juicy Couture store, Planet Funk and a Pacific Theatres 18-plex cinema.

Caruso Affiliated also owns The Grove shopping center in Los Angeles. Legal trouble is brewing for its Shops at Santa Anita development in Arcadia, Calif., which is 16 miles northeast of downtown Los Angeles. The Westfield Group, which owns neighboring mall Westfield Santa Anita, has filed suit to challenge the Caruso project’s environmental impact report. Development cannot start without an approval of the EIR (economic-impact report). The hearing is scheduled for April 2008. —Andrew Asch