Retail tenant sues Westfield, Brookfield for “full neglect” of SF mall

Owners of the Westfield San Francisco Centre have blamed San Francisco for the crime that has led to the mall’s demise. Now a major mall tenant has accused its owners of neglect.

AE Retail West, owner of fashion brand American Eagle, has sued the owners of the struggling mall, alleging store employees faced unchecked crime because of a rampant disregard by management, the San Francisco Business Times reported.

The Pittsburgh-based apparel firm cited more than 100 “significant security incidents” — including threats of violence against employees — in the year leading up to May at its Westfield mall store at 865 Market Street.

Its lawsuit accuses mall owners Paris-based Unibail-Rodamco-Westfield and New York-based Brookfield Properties of looking at how to beef up security, but they “ultimately decided not to make that investment.”

The complaint comes three months after both companies announced they would surrender the 1.2 million-square-foot mall near Union Square to its lenders after halting payments on a $558 million loan.

Westfield declined to comment, saying it hadn’t yet seen the lawsuit.

In June, owners of the mall said “challenging operating conditions in downtown San Francisco” led to “declines in sales, occupancy and foot traffic.”

The previous month, they blamed the “deteriorating situation” in Downtown when anchor Nordstrom announced that it would not renew its lease. A Westfield spokesperson pointed to the city’s “urgent need” to address a “lack of enforcement against rampant criminal activity” and an “unsustainable environment.” 

That environment, the AE Retail West lawsuit alleges, was caused by Westfield.

The firm alleges that the mall’s owners had long forsaken the property, allowing what began as a “slow decline in performance” to turn into “full neglect,” which allowed the mall to become a “lightning rod” for crime.

“On multiple occasions, patrons have brandished firearms while verbally assaulting the store’s employees. American Eagle employees have suffered multiple physical attacks and assaults. In one instance, a patron even threatened American Eagle staff with a machete,” the complaint alleges.

According to the lawsuit, the mall’s ownership failed to accept responsibility for its role in allowing these issues to take place at the property, and instead publicly “shifted all the blame to San Francisco.” 

The suit says Westfield closed its management office at the mall, “leaving American Eagle on its own to deal with Westfield’s unmonitored common areas and their problems.”

AE Retail West alleges Westfield and Brookfield spent little on maintaining their nine-story property in San Francisco. Meanwhile, Westfield sank $1.1 billion to expand its mall in San Jose, while refinancing its mall in Los Angeles’ Century City for $925 million after a $1 billion makeover.

— Dana Bartholomew

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