UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                            SCHEDULE 14A INFORMATION

                  Proxy Statement Pursuant to Section 14(a) of
            the Securities Exchange Act of 1934 (Amendment No.   )

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    /X/  Soliciting Material Pursuant to Section 240.14a-12

                                Prime Retail, Inc.
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                (Name of Registrant as Specified In Its Charter)

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    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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         On September 3, 2003, Prime Retail, Inc. (the "Company") and The
Lightstone Group, LLC ("Lightstone"), a New Jersey-based real estate company,
announced in a joint press release that they amended the merger agreement
entered into on July 8, 2003 between Prime Outlets Acquisition Company, LLC (the
"Buyer"), a Delaware limited liability company which is an affiliate of
Lightstone, and the Company, which provides for the Company to be merged with
the Buyer. A copy of this press release follows.



                                                      
FOR IMMEDIATE RELEASE                                    FOR MORE INFORMATION CALL
                                                         PRIME RETAIL, INC.:
SEPTEMBER 3,  2003                                       INVESTORS:  ROBERT A. BRVENIK
                                                                     PRESIDENT AND CHIEF FINANCIAL OFFICER
                                                                     (410) 234-1750

                                                         MEDIA:      STEVEN A. SLESS
                                                                     DIRECTOR - PUBLIC RELATIONS
                                                                     (410) 234-8333

                                                         THE LIGHTSTONE GROUP, LLC:
                                                         DAVID W. LICHTENSTEIN
                                                         PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                                         (732) 367-0129

                                                         MEDIA:      MICHAEL D. BECKERMAN
                                                                     BECKERMAN PUBLIC RELATIONS
                                                                     (908) 781-6420
                                                                     michael@beckermanpr.com
                                                                     -----------------------





               LIGHTSTONE AND PRIME RETAIL AMEND MERGER AGREEMENT


         BALTIMORE -- Prime Retail, Inc. (the "Company") (OTC Bulletin Board:
PMRE, PMREP, PMREO) and The Lightstone Group, LLC ("Lightstone"), a New
Jersey-based real estate company, announced today that they amended the merger
agreement (the "Merger Agreement") entered into on July 8, 2003 between Prime
Outlets Acquisition Company, LLC (the "Buyer"), a Delaware limited liability
company which is an affiliate of Lightstone, and the Company, which provides for
the Company to be merged with the Buyer (the "Acquisition").

         The amendment increases the aggregate consideration payable to the
Company's shareholders and unit holders from $115,000,000 to $115,514,000 and
reflects a revised allocation of the consideration among the Company's classes
of capital stock. The revised allocation provides that each holder of the
Company's Series A preferred stock will receive cash



in the amount of $18.400 per share, each holder of the Company's Series B
preferred stock will receive cash in the amount of $8.169 per share, and each
holder of the Company's common stock will receive cash in the amount of $0.170
per share. Compared to the allocation initially announced by the Company on July
8, 2003, the revised allocation results in an increase of $2.15 per share to the
series A preferred stockholders and a decrease of $0.491 and $0.01 per share to
the series B preferred stockholders and the common stockholders, respectively.

         In connection with the amendment to the Merger Agreement, the Company's
senior management and Houlihan Lokey Howard & Zukin Capital ("Houlihan Lokey"),
the Company's financial advisor, agreed to forego fees and benefits in the
amount of $409,000 and $105,000, respectively, payable to them in connection
with the closing of the transaction.

         Houlihan Lokey Howard & Zukin Financial Advisors, Inc., an affiliate of
Houlihan Lokey, has provided an opinion to the special committee and the
Company's board of directors that the consideration to be received pursuant to
the amended Merger Agreement by each of the classes of the Company's stock,
considered independently, is fair to such respective classes, from a financial
point of view.

         On August 29, 2003, the Company received notice of a purported class
action lawsuit against the Company, the Company's board of directors and
Lightstone filed by four related series A preferred stockholders in the Circuit
Court for Baltimore City, Maryland on August 12, 2003. The lawsuit alleges,
among other things, that the Company's directors breached their fiduciary duties
in approving the proposed merger, that the consideration payable in respect of
the series A preferred stock is unfair and inadequate and that the information
made available by the Company in connection with the transaction is deficient.
The plaintiffs are seeking, among other things, that the transaction
contemplated by the Merger Agreement be enjoined or, in the event such
transaction is consummated, that it be rescinded and damages be awarded to the
series A preferred stockholder class members. The Company believes the lawsuit
is without merit and intends to respond accordingly.

         The Company submitted revised preliminary proxy materials concerning
the Acquisition to the Securities and Exchange Commission (the "SEC") on
September 3, 2003. These materials are available free of charge at the website
maintained by the SEC at www.sec.gov. In addition, you may obtain the materials
filed with the SEC by the Company free of charge by accessing the Company's
website at www.primeretail.com or by requesting such documents in writing from
Prime Retail, Inc., 100 East Pratt Street, 19th Floor, Baltimore, Maryland 21202
or by telephone at (410) 234-0782.

         Prime Retail is a self-administered, self-managed real estate
investment trust engaged in the ownership, leasing, marketing and management of
outlet centers throughout the United States. Prime Retail currently owns and/or
manages 36 outlet centers totaling approximately 10.2 million square feet of
GLA. Prime Retail also owns 154,000 square feet of office space. Prime Retail
has been an owner, operator and a developer of outlet centers since 1988. For
additional information, visit Prime Retail's website at www.primeretail.com.
                                                        -------------------



         Founded in 1988, The Lightstone Group has become one of the largest,
private real estate companies in the industry. The Company owns/manages a
diversified portfolio of 15,000 apartments as well as office, industrial and
retail properties totaling more than 8.5 million square feet of space in 16
states and Puerto Rico. Headquartered in Lakewood, New Jersey, The Lightstone
Group employs over 400 professionals and maintains offices in Maryland,
Virginia, California, and New York. The Lightstone Group is currently embarked
on an aggressive acquisition and expansion program throughout the United States.
For additional information, visit The Lightstone Group's website at
www.lightstonegroup.com.
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SOME OF THE STATEMENTS CONTAINED HEREIN WHICH ARE NOT STATEMENTS OF HISTORICAL
FACTS ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 THAT REFLECT MANAGEMENT'S CURRENT VIEWS
WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. THE WORDS "BELIEVES,"
"EXPECTS," "ANTICIPATES," "ESTIMATES" AND SIMILAR WORDS OR EXPRESSIONS ARE
GENERALLY INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE EXPECTED BECAUSE OF VARIOUS RISKS AND
UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, CHANGES IN GENERAL ECONOMIC
CONDITIONS, ADVERSE CHANGES IN REAL ESTATE MARKETS AS WELL AS OTHER RISKS AND
UNCERTAINTIES INCLUDED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION. PRIME RETAIL ACCEPTS NO RESPONSIBILITY FOR
UPDATING FORWARD-LOOKING STATEMENTS.

INVESTOR NOTICE

         PRIME RETAIL PLANS TO FILE WITH THE SEC A PROXY STATEMENT AND OTHER
RELEVANT DOCUMENTS CONCERNING THE ACQUISITION. INVESTORS OF PRIME RETAIL ARE
URGED TO READ THE PROXY STATEMENT WHEN IT IS FILED AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
YOU WILL BE ABLE TO OBTAIN THE DOCUMENTS, WHEN THEY BECOME AVAILABLE, FREE OF
CHARGE AT THE WEBSITE MAINTAINED BY THE SEC AT WWW.SEC.GOV. IN ADDITION, YOU MAY
OBTAIN DOCUMENTS FILED WITH THE SEC BY PRIME RETAIL FREE OF CHARGE BY ACCESSING
THE COMPANY'S WEBSITE AT WWW.PRIMERETAIL.COM OR BY REQUESTING SUCH DOCUMENTS IN
WRITING FROM PRIME RETAIL, INC., 100 EAST PRATT STREET, 19TH FLOOR, BALTIMORE,
MARYLAND 21202 OR BY TELEPHONE AT (410) 234-0782.

         PRIME RETAIL, ITS DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN OF PRIME
RETAIL'S EMPLOYEES MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF
PROXIES FROM THE STOCKHOLDERS OF PRIME RETAIL IN CONNECTION WITH THE
ACQUISITION. THESE PARTICIPANTS MAY HAVE INTERESTS IN THE ACQUISITION, IF
CONSUMMATED, INCLUDING INTERESTS RESULTING FROM HOLDING EQUITY INTERESTS IN
PRIME RETAIL OR ITS OPERATING PARTNERSHIP. INFORMATION ABOUT THE INTERESTS OF
DIRECTORS AND EXECUTIVE OFFICERS OF PRIME RETAIL AND THEIR OWNERSHIP OF
SECURITIES OF PRIME RETAIL WILL BE SET FORTH IN THE PROXY STATEMENT.

         INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES
AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.