Forest City and Westfield agreement creates largest urban shopping center west of the mississippi in the heart of San Francisco’s retail district
06 February 2003
Countries: United States
San Francisco, February 6, 2003 – Forest City Enterprises (NYSE: FCEA), the developer of the 835 Market Street project in downtown San Francisco, and Westfield America (ASX: WFA), the owner of the San Francisco Centre, today announced a business agreement to integrate, develop and market the two sites, creating one of the nation’s largest urban retail destinations. The interconnected venues will boast the second largest Bloomingdale’s and Nordstrom in the country, a state-of-the-art theatre complex and over 200 specialty stores.
“Two of the nation’s leading real estate companies have come together to develop a premier retail and entertainment destination that will provide substantial benefits to the City of San Francisco,” said Mayor Willie L. Brown, Jr. “This one-of-a-kind project will give San Francisco’s retail core a huge boost by attracting millions of new shoppers. Businesses from Union Square to Yerba Buena will benefit from the increase in consumers drawn to the area, and the City will benefit from a surge in tax revenue, thousands of new jobs and millions in community contributions.”
The agreement between Forest City and Westfield leverages the companies’ strengths to effectively develop, lease and manage the property. Forest City is the developer of 835 Market Street with approved plans to revitalize the site into a Bloomingdale’s Department Store, nine-screen cinema, retail shops and offices. Westfield is the largest retail landlord in the State of California and owns the San Francisco Centre. As part of the agreement, Westfield will lease and manage the new San Francisco Centre.
Research estimates the new San Francisco Centre will attract over 25 million shoppers each year. At the 1.5 million square-foot center, there will be a total of 3,350 permanent jobs. Additionally, the project will generate 770 new union construction jobs. The new San Francisco Centre is expected to generate $500 million in annual sales.
“Our combined development experience, leasing capabilities and capital gives us a variety of tools to build a spectacular world-class retail and entertainment destination,” said James Ratner, President and CEO, Forest City Commercial Group.
“Joining these properties creates one vision for a world-class shopping experience that will tremendously benefit the City of San Francisco while becoming one of the premier retail destinations in the world,” said Peter Lowy, CEO, Westfield Corp. “The collaborative partnership of Forest City and Westfield provides the combination of expertise and capability to bring this project to life.”
At today’s news conference, Forest City and Westfield also announced:
- Groundbreaking for the new project is scheduled for fall of 2003. Nordstrom and the existing San Francisco Centre will remain open during construction.
- The new facility will open in summer 2006. The two properties will connect at five levels.
- Designs feature the famed 102-foot-wide glass and steel dome and rotunda and historic facade of 835 Market Street, which will be restored and, the unique oval- shaped atrium that currently illuminates the San Francisco Centre.
- Leasing begins immediately.
Upon completion, Federated will own and operate Bloomingdale’s as part of a long-term operating agreement.
Forest City Enterprises, Inc. is a $4.7 billion NYSE-listed real estate company headquartered in Cleveland, Ohio. The Company is principally engaged in the ownership, development, acquisition and management of commercial and residential real estate throughout the United States. The Company’s portfolio includes interests in retail centers, apartment communities, office buildings and hotels.
Westfield America Trust (ASX: WFA) is a property trust listed on the Australian Stock Exchange with assets of $10.2 billion (US). WFA owns a majority interest in the Westfield America portfolio of 63 centers across the U.S., branded as Westfield Shoppingtowns. Westfield Shoppingtowns are home to more than 8,400 specialty stores and encompass 64 million square feet in the states of California, Colorado, Connecticut, Florida, Illinois, Indiana, Maryland, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio and
Statements made in this news release that state the Company or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, real estate development and investment risks, economic conditions in the Company’s target markets, reliance on major tenants, the impact of terrorist acts, the Company’s substantial leverage and the ability to service debt, guarantees under the Company’s credit facility, changes in interest rates, continued availability of tax-exempt government financing, the sustainability of substantial operations at the subsidiary level, significant geographic concentration, illiquidity of real estate investments, dependence on rental income from real property, conflicts of interest, competition, potential liability from syndicated properties, effects of uninsured loss, environmental liabilities, partnership risks, litigation risks and other risk factors as disclosed from time to time in the Company’s SEC filings, including, but not limited to, the Company’s report on Form 10-K for the year ended January 31, 2002.
Opening in Summer 2006: The New San Francisco Centre
A World-Class Destination
- Location: Market St., Jessie St. & Mission St., between 4th & 5th Streets.
- Total square feet: 1.5 million (combined centers)
- Cost: Privately funded $380 million project.
- Groundbreaking: Fall of 2003.
- Opens: Summer 2006.
The Most Unique Retail and Entertainment Destination in the World
- Largest urban shopping center west of the Mississippi.
- Second largest Bloomingdale’s and Nordstrom in the country.
- Only urban shopping center anchored by Bloomingdale’s and Nordstrom.
- State-of-the-art nine-screen theatre complex.
- 200 specialty stores.
- Offices on the top three floors on Market Street
- Restores the famed 102-foot-wide glass and steel dome and rotunda and historic Market Street facade to the way they appeared in the early 1900s. Complementing the dome is the unique oval-shaped atrium that currently illuminates the San Francisco Centre.
- Will attract approximately 25 million shoppers annually.
- Links historic Market Street with contemporary Yerba Buena.
Increased City Revenue, Jobs & Community Benefits
- At the new San Francisco Centre, there will be a total of 3,350 permanent jobs, that includes 1,950 new and 1,400 existing jobs. Additionally, the project will generate 770 new union construction jobs.
- Establishes new job training, internship, career advancement programs and emerging business incubator programs.
- The connected project will generate $500 million in annual sales.
- $43.3 million will go to affordable housing over 30 years.
- $4 million designated for improvements to Hallidie Plaza, MUNI/BART Powell Street Station and other public purposes.
- $2 million in contributions to community groups for revolving community improvement fund, Filipino Cultural Center, South of Market Health Center and several jobs programs.
Owned and Operated by World-Class Real Estate Companies
- Two of the nation’s leading real estate companies have come together to develop a world-class retail and entertainment destination.
- Forest City is the developer of 835 Market Street with approved plans to revitalize the site. The company’s portfolio includes interests in retail centers, apartment communities, office buildings and hotels across the nation.
- Westfield is the largest retail landlord in the State of California and owns the San Francisco Centre. As part of the agreement, it will lease and manage the new San Francisco Centre.