San Francisco’s dying downtown struck again when Westfield stopped making mortgage payments for his mall
San Francisco’s struggling downtown has taken another hit as Westfield stops paying mortgage payments on his massive mall due to crime and tank sales.
The company stopped paying a $558 million loan and is returning it to their lender, who will appoint a trustee. It will remain open for the time being.
The decision was largely prompted by the decision by Nordstrom, the mall’s main tenant, to close in August.
Last month, Westfield blamed “unsafe conditions” and “lack of enforcement against rampant criminal activity” in part for Nordstrom’s departure from the mall.
Westfield in San Francisco (pictured) has announced it will return the building to the lender
A woman in a wheelchair injects drugs in San Francisco’s infamous drug market. The taxpayer-funded ‘harm reduction’ facility opened and closed near Westfield in early 2022 after criticism it had done nothing to solve the town’s many social ills
Westfield said San Francisco’s “unprecedented” underperformance was in stark contrast to the rest of his properties.
San Francisco Center generated $455 million in revenue in 2019, pre-pandemic.
Last year sales fell by about a third to $298 million.
Nordstrom occupied 30,000 square feet in the mall: When it closes, Westfield San Francisco will be only 55 percent rented.
Other Westfields are leased at an average of 93 percent.
The mall is a smart and chic building whose other retailers include Bloomingdales, Aesop, Rolex and Sephora.
Westfield’s fight will put new pressure on city leaders after multiple retailers and hotels shut down in downtown San Francisco as it continues to battle rising crime, overt drug use and homelessness.
The famed progressive city has been condemned for its “harm reduction” policies, which critics say have effectively legalized drug use. Meanwhile, the police department remains understaffed after awakened lawmakers called for funding to be lifted in the wake of George Floyd’s murder.
“For more than 20 years, Westfield has proudly and successfully operated San Francisco Center and during that time has made significant investments in the vitality of the property,” the company said.
“Given the challenging operating conditions in downtown San Francisco, which have resulted in a decline in sales, occupancy and foot traffic, we have made the difficult decision to begin the process of transferring management of the mall to our lender, so that they have a receiver to operate the property in the future.’
Westfield’s shopping center in San Francisco includes 1.2 million square feet of retail space and 300,000 square feet of office space.
It is located in the troubled Union Square neighborhood in the center of the city, where homelessness and crime are rife.
Camps are being set up all over the city and people are openly using drugs. Pictured: Homeless tents are seen in Tenderloin District during heavy rainfall in San Francisco on Jan. 11
Several of the stores that have closed raised concerns about safety as downtown San Francisco is plagued by homelessness and drug abuse
Retailer Old Navy has become the latest retailer to leave crime-ridden San Francisco (2020 photo)
Nordstrom recently closed a store in San Francisco, citing changing “dynamics” in the city as the reason for the closures
Employees at a Target store in San Francisco recently said there were robberies every 10 minutes
Whole Foods, Old Navy, Gap, and Office Depot are just a few of the stores in the district that have announced they are closing in recent months.
Of the 203 retailers that opened in the city’s Union Square area in 2019, only 107 are still operating — a 47 percent drop in just a few pandemic-ravaged years.
The city is in a kind of vicious circle: office workers are now working from home, making the downtown area considerably quieter and the empty streets more dangerous. The rise in crime then deters people from going downtown.
And as the downtown area empties, the city loses vital tax revenue and the area becomes less attractive.
The city’s revenue loss from reduced property taxes could reach $196 million a year by 2028, according to models released in November by the San Francisco Controller’s Office.
The modeling best-case scenario expects costs to be closer to $100 million per year.
The building that houses The San Francisco Chronicle, steps from the Westfield mall, will face a 60 percent vacancy rate by the fall as leases from tenants Yahoo and Autodesk expire.
An analysis of official numbers and other research shows San Francisco could lose hundreds of millions of dollars from a corporate exodus and failure to recover from COVID
Signs on cars near the connection site announce ‘nothing to steal’ as crime continues to rise in one of the city’s poorest and most drug-ridden neighborhoods
Tourism is steadily recovering to its pre-covid highs, according to figures from the San Francisco Travel Association
In addition, the office tower 415 Natoma is 97 percent empty.
San Francisco pedestrian traffic totaled 5.6 million visits between January and December 2022 — a 42 percent decrease.
In 2019, there were 9.7 million visits.
The city has been hit by a nationwide shoplifting law that downgraded stealing goods worth less than $950 from a misdemeanor to a much lesser felony.
A disturbing recent report showed that 95 downtown San Francisco retailers have closed since the start of the COVID pandemic, a drop of more than 50 percent.
In April, Whole Foods said it would close its flagship store in downtown San Francisco “for the time being” to ensure the “safety” of its workforce.
San Francisco Mayor London Breed has proposed a record budget despite the city facing a $1.3 billion deficit by 2028
“If we feel we can ensure the safety of our team members in store, we will evaluate a reopening of our Trinity location,” a spokesperson said.
Similarly, a Target store in the city has been forced to lock up more of its products to fend off thieves.
An employee at the location recently said there were robberies “every ten minutes.”
Many major tech companies based in San Francisco – including Meta, Google, Salesforce and Twitter – have also cut tens of thousands of jobs in recent months as the industry went through a post-covid crisis.
In April, Salesforce said it will be moving out of its eponymous 30-story downtown Salesforce East building, which employed about 1,000 employees before the pandemic.
City officials launched a $6 million ad campaign in May to lure tourists back. Visitor numbers have improved since covid and in 2022 were about 16 percent lower than the record 26.2 million set in 2019.
The international campaign featured a commercial featuring an array of local talent, including Lady Camden, a drag queen who became popular in “RuPaul’s Drag Race,” and local muralist Sirron Norris.