Bollinger alleges that after entering into confidentiality agreements in 2005 so that the two might further discuss a possible joint venture to develop Fountains, Westfield misused the detailed, proprietary information it was provided regarding Bollinger's prospective tenants, rental rates, construction costs and the like. The lawsuit was filed late last week in Placer County Superior Court.
"Although no ground lease or joint venture agreements were signed, unbeknownst to Bollinger and contrary to the confidentiality agreements, Westfield was inappropriately discussing information with the retail and leasing communities about its attempts to acquire an interest in The Fountains, and providing inaccurate information about Bollinger's plans for the project," according to a statement released today by Bollinger. "Westfield exploited this information and contacted many of Bollinger's current and prospective tenants of The Fountains, and offered these tenants attractive lease terms to locate at the Westfield Galleria instead of Bollinger's Lifestyle project."
Bollinger says the losses are still being calculated, but could be in excess of $60 million. An unspecified amount of punitive damages also are being sought in the litigation.
Fountains is planned as a 350,000-sf restaurant and specialty retail development. Signed tenants include Orvis, DSW, Jos A Bank, Sur La Table, Boudin Bakery, in addition to Whole Foods, Z Gallerie, Chico's, Coldwater Creek, Lucy, Peet's Coffee, SOMA and White House/Black Market.
Bollinger purchased the 35 acres of land for the project at the end of 1996. Located at Galleria Blvd., Roseville Parkway and Reserve Drive, it sits directly across from the Galleria at Roseville Mall, which at the time was owned by Chicago-based Urban Properties.
Bollinger initially planned a big box center but eventually settled on a lifestyle shopping center. Bollinger says Westfield first approached it about a mutually beneficial relationship, in 2005, including a possible long-term ground lease of the Fountains property. In 2006, Bollinger says Westfield again made advances, this time for a joint venture comprised of co-ownership interested in both the Galleria at Roseville and Fountains.
At the time, Westfield was underway with its own expansion plans at Galleria at Roseville and was searching for new tenants to fill its new premises. The two parties signed confidentiality agreement in September 2005 and shared detailed information about their projects. What Westfield did with that information is the at the core of the litigation.
Filed March 9, Bollinger's suit alleges breach of agreement, misappropriation of trade secrets, unfair competition, unjust enrichment, interference with prospective economic advantage, fraud, and breach of covenant of good faith and fair dealing. A Westfield spokesperson tells GlobeSt.com the company "does not comment on matters under litigation."
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