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Walmart Agrees To Pay D.C. $1.3M For Pulling Out Of Skyland Town Center

Walmart will pay D.C. $1.3M for terminating its lease at Skyland Town Center, a mixed-use development under construction in Ward 7. 

A rendering of the Skyland Town Center development in D.C.'s Ward 7.

D.C. Attorney General Karl Racine announced Thursday the District had reached a settlement with Walmart after he sued them over pulling out of Rappaport and WC Smith's development in January 2016. 

The retailer had initially announced its plans to open at Skyland in November 2011, part of six planned new stores across the District. It canceled one of the planned stores, at New York Avenue and Bladensburg Road NE, in 2013. It then signed the Skyland lease in December 2014. Walmart in January 2016 announced it would back out of Skyland and Ward 7's Capitol Gateway project, part of a broader closure of 154 U.S. stores.

Its abrupt lease termination halted initial construction on Skyland, which had begun in 2014. 

“When Walmart terminated its lease at Skyland, an underserved part of our community was deprived of jobs and retail options it had been promised,” Racine said in a release. “My office took action on this matter because District residents expect corporations and developers to honor their commitments."

Walmart denies that it engaged in any wrongdoing related to the lease termination, which it attributes to unfavorable business conditions, according to the settlement agreement. Walmart currently has three stores open in the District in Fort Totten, Brightwood and near Union Station

The developers restarted the project last month, breaking ground again after securing EB-5 financing and reaching a deal with EagleBank. The development, at the intersection of Alabama Avenue, Naylor Road and Good Hope Road SE, will include 500 apartments and 320K SF of retail. The developers signed CVS for 10K SF at the project but are still seeking an anchor tenant. Rappaport and WC Smith expect to complete the development in about two years.