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Simon Property settles with AG over ‘anticompetitive tactics’

The luxury wing at Roosevelt Field mall in

The luxury wing at Roosevelt Field mall in Garden City, Jan. 28, 2016. Photo Credit: Newsday / J. Conrad Williams Jr.

Simon Property Group Inc., owner of Roosevelt Field in Garden City and two other malls on Long Island, has reached a settlement agreement with Attorney General Eric T. Schneiderman prohibiting “anticompetitive tactics” to prevent the development of competing outlet centers in New York City.

Indianapolis-based Simon, the largest U.S. mall operator, will pay $945,000 to New York State.

An Attorney General’s Office investigation found that many retailers at Simon’s Woodbury Common Premium Outlets in Central Valley, located in the Hudson Valley region, were prevented from opening outlet stores in New York City. So-called radius restrictions prevented them from opening a second store within 60 “air miles,” or about 70 land miles. Those violating the restriction faced penalties.

The Attorney General’s Office accused Simon of having a “monopoly power” over outlet centers in the New York City area.

“No business should be allowed to stifle an entire industry at the expense of consumers — but for years, that’s exactly what Simon Property Group did to New Yorkers,” Schneiderman said in a statement. “That ends today.”

Simon in a statement called the two-year long inquiry a “meritless investigation” and an “unnecessary distraction.” Woodbury Common’s “lawful” and “reasonable” radius provision has been used since 1985, before Simon acquired Woodbury Common in 2004, the statement said. Woodbury Common generates more than $1.3 billion in annual sales.

“Simon has never sought to limit competition,” the statement said. “It regularly granted exceptions to radius provisions and understands the importance of competition and consumer choice in the market.”

Under the settlement, Simon agreed to immediately revise existing leases to remove radius restrictions, as well as to cease using radius restrictions or other exclusionary tactics for the next 10 years.

Simon also agreed to the appointment of an independent monitor to ensure compliance with the settlement.

Retailers at Woodbury Common include Armani, Barneys New York, Coach, Dior, Dolce & Gabbana, Fendi, Gucci and Michael Kors.

Simon, with more than $60 billion in annual U.S. sales, operates more than 200 properties worldwide. On Long Island, besides Roosevelt Field, it also owns Walt Whitman Shops in Huntington Station and Smith Haven Mall in Lake Grove.

Other outlet centers closest to New York City are Tanger Outlets in Deer Park and Riverhead, owned by Greensboro, North Carolina-based Tanger Factory Outlet Centers Inc.

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