Neiman Marcus could keep its flagship store in downtown Dallas if a plan pulled together in the past 24 hours moves forward.
Neiman Marcus had announced it planned to close the nine-story flagship at 1618 Main St. next month after being unable to reach new terms for a ground lease with a landlord. The store had been open for more than 110 years, and Neiman Marcus entered into multiple ground leases for the property in order to expand over the decades.
The retailer's 99-year ground lease with the Slaughter family was expected to expire March 31, but now the Slaughters are donating the acreage to the city of Dallas for the continued operations of Neiman Marcus' store, according to a letter signed Wednesday by a group of Dallas city leaders and real estate executives.
The group plans to meet with representatives from Saks Global next Tuesday. Neiman Marcus was purchased by rival Saks Global in a deal with a total enterprise value of $2.7 billion that was finalized at the end of December.
Saks Global did not immediately respond to a media request from CoStar News seeking confirmation about the group's claims.
"Following conversations over the past 24 hours with Stephen Rogers, the asset manager for the Slaughter family, we have reached an agreement for the land in question to be donated to the city of Dallas," the group said in the letter. "This transaction secures the continued operations of the flagship Neiman Marcus store in downtown."
Rogers didn't immediately respond to a call and email for comment from CoStar News.
"We can now report that issues Saks leadership had perceived were 'beyond (Saks) control,' as expressed by CEO Marc Metrick, relating to the ground lease under the escalators are now under control," the letter said.
If Neiman Marcus closes its flagship store in downtown Dallas, it would be the end of an era and leave the city, part of the nation's fourth-largest metropolitan area, without a downtown department store.
The Slaughter family are descendants of C.C. Slaughter, who signed the ground lease in question in 1926 with Herbert Marcus. A family representative told the group the 99-year lease was meant to be a philanthropic lease as C.C. Slaughter was close friends with the Neiman family and the Marcus family. In the 99 years, the lease never received more than $400 per month, the consortium said in its letter.
Dallas City Manager Kimberly Bizor Tolbert said in a statement that the city is committed to ensuring the flagship Neiman Marcus store in downtown Dallas is open for many years to come with "no barriers" related to the land lease.
"This kind of vision and cooperation between the real estate community, downtown stakeholders and longtime passionate Neiman Marcus customers have been the driving force motivating us for the betterment of our city," Tolbert said.
The move made by city and real estate leaders seeking to save Neiman Marcus' flagship downtown store comes as the luxury retailer is seeking to exit its Dallas headquarters at Cityplace Tower, just north of downtown Dallas. The retailer has $5.25 million of city incentives tied to the company meeting certain employment and new hire thresholds at the office.
Saks Global is planning to consolidate Neiman Marcus' corporate office space into Saks Global's headquarters in New York, according to a statement from Feb. 14.