Friday, February 10, 2012

STORYLINE K Street Mall

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Westfield Group has agreed to sell Downtown Plaza, Mayor Kevin Johnson announced Tuesday morning.

The city has been pressing Westfield to invest in the plaza for nearly 12 years. Since August, Johnson has been pushing the shopping mall owner to make good on its promise to invest at least $120 million in the under-performing plaza.

The alternative, he said at the time, was for Westfield to sell the plaza. Unwilling to invest that much, Westfield decided to sell, Johnson said. But the mayor and city staff must now find a buyer who can agree on a price with Westfield.

"Westfield has agreed to step aside, and, if necessary, sell its interests in Downtown Plaza," Johnson said during his weekly press conference Tuesday morning.

Westfield has not gotten on board with the city's new vision to open up the plaza, creating an "outward-facing" mall open to the sky and street traffic, he said.

The company's decision makes it easier for potential arena developers to discuss buying the property from Westfield, Johnson said.

Westfield had proposed a $120 million plaza overhaul in 2006. But the company repeatedly stalled on putting those plans into action. In May, Westfield postponed those plans for at least the rest of the year, yet completed a $120 million reinvestment at Westfield Santa Anita in Southern California's Arcadia.

Johnson and other city leaders have been meeting with Westfield representatives for months to negotiate either investment or the sale of the mall to the city or developers.

The Downtown Plaza was built in the 1970s. Westfield bought the plaza in 1998. The company now has more than $47 billion in investments in 119 shopping centers throughout the world.

The plaza has been losing tenants for years, and stores like Banana Republic and Ann Taylor closed recently. The mayor said he planned to call the chief executive officer of the plaza's anchor store, Macy's, later Tuesday to assure the department store chain of the city's commitment to the plaza and its retailers.

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Amar Bains

December 15, 2009 | 1:27 PM

what is sky traffic?

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bbbbmer

December 15, 2009 | 1:31 PM

Downtown is becoming blighted, and this just adds to the pile of tragedy and serious ugly in the area. There is virtually no investment capital available for the area, banks are not lending and with the impending commercial mortgage meltdown looming next year they aren't likely to, public funding is dwindling, property prices are still too high, and the nature of this retail use has changed dramatically since this urban mall's inception...

Westfield was the best we had going at this time, and now they're cutting their losses and leaving...

The next big crash will be when (not if anymore) Thomas Enterprises picks up and abandons the Railyards project, as its own portfolio of heavily leveraged mortgages for empty projects matures...

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oldpup

December 15, 2009 | 1:32 PM

Went shopping down in there last weekend. The continuing death of inner cities will not stop soon. Few potential customers live near there and general business simply doesn't run anymore in such a way as to encourage centralization in aging environments. We'll continue to visit from the burbs though if they keep it interesting. Old Sac is a plus.

Hm. Instead of refinish the freeway they should have torn it down, with a reroute around West Sac. I-5 is a knife in Sac's heart.

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Andrew McLeod

December 15, 2009 | 4:14 PM

Finding a buyer seems like a long-shot. It might be useful for the tenants to form a cooperative or LLC to purchase it. Profits from rents would be distributed back to them (and alas, losses would be charged to them). The different sizes of tenants would make a co-op somewhat complicated, but this could be addressed through multiple classes of stock - each member gets one common share and the additional capital would be raised through nonvoting preferred stock. The catch is that most tenants are chains with relatively little investment in downtown Sacto. Ironically, that points toward including other downtown merchants in it.

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bbbbmer

December 15, 2009 | 4:55 PM

That would be a thoughtful solution... Unfortunately those in positions to effect such an outcome are not quite as thoughtful as you seem to be...

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stephanie taylor

December 15, 2009 | 5:42 PM

That mall was an aesthetic disaster from the start, including millions spent on several, very ineffective or non-functioning public art pieces. It has a ponderous and oppressive feeling that is very unwelcoming, no matter what the economy. Architect Jon Jerde pulled one over on the City. Take a look at the 3rd Street Mall by Architect Frank Gehry, in Santa Monica for inspiration. Open K to the east to traffic. What we need is a visionary architect, more parking, more downtown residences for those who have money to spend.

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William Burg

December 17, 2009 | 7:43 PM

Not to mention more downtown residences for those without much money to spend...thus fewer of those people will be on the street!

3rd Street Promenade has some other factors going for it--the pacific ocean is a fairly major tourist draw in its own right, one we can't replicate no matter what architect we get, and Santa Monica is a wealthy suburb surrounded by other wealthy suburbs...it's nowhere near downtown Los Angeles, which is also legendary for its deadness on weekends. But, despite all that, the last time I was at 3rd Street Promenade, there were homeless people--which kind of flies in the face of the idea that it is homeless people who are scaring everyone away from K Street.

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