Unibail-Rodamco demands LA County reopen malls

UPDATED, Sept. 14, 2020, 3 p.m.: Los Angeles County’s largest operator of indoor malls has had its fill of the county’s Covid policies.

Unibail-Rodamco-Westfield is demanding the county’s board of supervisors reopen malls — which remain shuttered — as officials have done with other parts of the local economy.

The call came in a three-page letter Unibail-Rodamco’s president of U.S. operations, Jean-Marie Tritant, wrote on Friday, blasting the decision to keep indoor malls closed.

Tritant said L.A. County is “breaking ranks with the state,” and imposing confusingly-worded restrictions on indoor malls.

Unibail-Rodamco operates six malls in L.A. County, which have 1,300 tenants and employ 24,000 people, according to the letter.

“Regrettably, the county’s treatment of indoor malls appears to be arbitrary and based on the misconception that these facilities are less safe than functionally equivalent big box retailers that have been allowed to operate throughout the pandemic,” Tritant wrote. He added, “there is no doubt that indoor malls are as safe, if not safer, than hair salons, which the county has seen fit to allow to operate.” Hair salons are barber shops were among those allowed to reopen earlier this month. The company said it had filed California Public Records Act requests for meeting minutes on the decision to allow hair salons and barber shops to resume indoor service.

The French-based company, one or Europe’s largest commercial real estate firms, has been hit hard by the pandemic. Unibail-Rodamco has about 25 percent of its assets in the U.S. For the second quarter, the company reported a 15-percent decline in mall rental net income at its 32 U.S. shopping centers.

The county has kept indoor malls closed since a mid-July order by Gov. Gavin Newsom that restricts indoor business activity in counties with high numbers of Covid cases. The state put L.A. County on a watchlist of high-risk counties, and lumps indoor malls with bars, nightclubs, and movie theaters, all of which remain closed for indoor service. “Essential services” in malls like medical offices can remain open, but those are exceptions.

The L.A. County Department of Public Health said in a statement Monday that “local decisions can be more restrictive than state health officer orders. In Los Angeles County, we will be reviewing the next 2 weeks of data to assess the impact of Labor Day on case and hospitalization rates. Given that these rates increased after Memorial Day and then we had a huge surge a couple of weeks after July 4, it is prudent to ensure that we will not see a repeat of this before continuing with re-openings.”

Tritant said in the letter that Unibail-Rodamco’s “local shopping centers generate approximately $400 million in sales taxes and over $40 million in real estate taxes on an annual basis.” “We have also contributed nearly $18 million in the last decade to local charities and community organizations.”

In May, the firm received approval from the L.A. city planning commission for a 34-acre mixed-use project in the Warner Center neighborhood, which will include 1,400 residential units, 280,000 square feet of retail, 731,500 square feet of office space and 572 hotel rooms. It reflects the company’s increasing focus on mixed-use developments, with retail accounting for just 32 percent of its roughly 10 million-square-foot development pipeline.