The Westfield Group, one of the world’s largest developers, has signed a letter of intent with The Port Authority of New York and New Jersey to reacquire a stake in the planned $1.45 billion retail complex at the World Trade Center site.
Under the terms of the deal, Westfield and the Port Authority will jointly own the retail facilities, and Westfield will manage and lease the site in lower Manhattan. Westfield will invest as much as $625 million and create a 488,000-square-foot, multilevel retail space primarily situated in the new transit transportation hub designed by Santiago Calatrava, and at street level. The Port Authority will provide about $825 million toward the project.
Before the Sept. 11, 2001, terrorist attacks, Westfield had leased the World Trade Center retail components, which consisted of 427,000 square feet of space and were highly productive. Westfield acquired an interest in the retail facilities in July 2001, but in December 2003 sold it back to the Port Authority. The company said it made the decision “to help simplify the rebuilding process by avoiding the inherent conflict between its commercial/lease rights and the interests of the public.”
The World Trade Center site retail project will compete for tenants with the South Street Seaport, which is planning a major redevelopment and is expected to announce the strategy within a few months. The Seaport is owned by the City of New York, but General Growth Properties has the leasehold.
As for the World Trade Center, “We always wanted to be a part of the revitalization of this historic site once the plans were finalized,” Westfield Group managing director Peter Lowy said in a statement. “With the Port Authority, we look forward to creating a world-class, iconic shopping destination.”
Westfield said the World Trade Center project also will feature a “full array of eateries, ranging from full-service restaurants to casual dining, and local, national and international specialty shops.”
Westfield has developed some of the world’s highest profile retail centers, including Westfield Bondi Junction in Sydney, Westfield San Francisco Centre and Westfield Century City in Los Angeles. Westfield London is to open in the fall.
New York Gov. Eliot Spitzer said in a statement that the Port Authority-Westfield agreement “will provide the business and residential communities in lower Manhattan with a major economic boost and create a further incentive to relocate downtown. This retail program will integrate the World Trade Center site with the rest of the city’s streetscape, creating a linkage that will allow for a bustling, active street life in the neighborhood.”
This story first appeared in the January 8, 2008 issue of WWD. Subscribe Today.
The retail space is among several projects under construction or planned at the 16-acre World Trade Center site. The 1,776-foot Freedom Tower’s footings and foundations are nearing completion, and steel will begin to rise above street level during the first part of this year. Construction of the foundations for the transportation hub and the site’s memorial and museum are also under way.