Trade Center Retail to Outdo Original, Westfield’s Co-CEO Says

Trade Center Retail to Outdo Original, Westfield’s Co-CEO Says

(Bloomberg)—Westfield Corp.’s new World Trade Center retail concourse, which opens today inside the mass-transit hub at the rebuilt complex in lower Manhattan, is positioned to outperform the original one, destroyed in the Sept. 11, 2001, terrorist attack, the company’s co-chief executive officer said.

“All you have to look at is the Apple Store and Eataly,” Peter Lowy said in an interview late yesterday at an office that overlooks the 16-acre (6.5-hectare) trade center site. “When you look at that, you should have much higher volumes because you have much different retailers that do very, very large business.”

Westfield is opening the 365,000-square-foot (34,000-square-meter) shopping complex mainly inside the Oculus, the white-ribbed centerpiece of architect Santiago Calatrava’s $3.9 billion commuter terminal. The opening, at noon, is the latest step in a return to normalcy at the trade center, where there are two office towers complete and a third on the way, along with a 9/11 memorial and museum honoring the victims of the attack.

Lowy projected that the mall will generate just more than $1,500 a square foot in sales. The original World Trade Center mall had sales of $903 a square foot in 2000, Lowy said at the time, or more than three times the average for a typical suburban regional mall. His projected volume for the new retail center would be almost four times the $400 a square foot found at an average mall today, he said.

Rights Reacquired

Westfield, based in Sydney, leased the original mall in 2001 in the same deal under which developer Larry Silverstein won the rights to the twin towers and other office buildings on the site for 99 years. After the attack, Westfield sold its interest back to the Port Authority of New York and New Jersey, which owns the site, while keeping a first-negotiation right should the authority decide to sell its retail rights again.

The mall company reacquired those interests in a pair of deals, the first in 2012 and the second in 2014, for a combined $1.41 billion. The Australian Financial Review last week estimated a $2.5 billion value for the complex. Lowy declined yesterday to comment on the estimate.

The retail concourse, in a complex that links the Port Authority Trans-Hudson trains from New Jersey with the New York subway system, is designed to attract a steady stream of commuters, workers from in and around the complex, residents from the growing neighborhood that surrounds the complex, and tourists coming to see the memorial, museum and observatory at 1 World Trade Center, the tallest building in the Western Hemisphere.

Global Tourists

Westfield is expecting about 15 million global travelers to visit the area annually, Lowy said. He said he’s projecting the complex to generate about $1 billion in annual sales volume and operate at a 6.5 percent profit margin.

The mall will debut with 60 of its just more than 100 stores and restaurants in operation, including Eataly, the Italian-themed food and beverage marketplace, which opened on Aug. 11, and the Apple Store. Other stores prepared to open include Kate Spade, Breitling, Charles Tyrwhitt and Smythson, and nine stores that Lowy said were in the original concourse, including a Duane Reade drugstore, Victoria’s Secret, Banana Republic, Cole Haan, Crabtree & Evelyn and Papyrus.

Stores still to come after the mall’s debut include clothing retailer H&M. A representative from the U.S. office of Hennes & Mauritz AB, the chain’s Swedish parent, said in an e-mail that the company’s “excited” to be part of the new mall.

Christmas Shopping

The complex is fully leased, said Molly Morse, a Westfield spokeswoman. Stores will come online “in stages,” with the entire complex open by the Christmas shopping season, she said. That doesn’t include a section that can’t be finished until 3 World Trade Center is at least approaching completion, Lowy said.

The shopping hub will have the delicate task of co-existing with the solemn memorial, with its twin pools approximately where the destroyed twin towers were. For many victims’ families, the memorial remains their only grave site. Lee Ielpi, whose firefighter son Jonathan died in the attack, said Westfield has treated the task with sensitivity and respect.

“This is something we’ve thought about for years,” said Ielpi, a co-founder of the 9/11 Tribute Center, which has been interacting with site tourists since early last decade. “The memorial itself and the museum, that is the sacred ground, that 9 acres, but the same applies to the transit hub and all the retail that’s going to be involved in it. But we have to be open-minded about it. We have to realize that there is rebuilding, there is revitalizing.”

The master plan for the complex allows the stores to operate without intruding on the memorial, Lowy said. None of the entrances face the memorial, he said. A dining area at Eataly, which is on the third floor of the 4 World Trade Center office tower, overlooks the south tower memorial pool. He said he thought those uses are compatible.

The memorial and the retail space “can co-exist in the proper manner,” Lowy said.

--With assistance from Ruth Liew. To contact the reporter on this story: David M. Levitt in New York at [email protected] To contact the editors responsible for this story: Daniel Taub at [email protected] Christine Maurus


© 2016 Bloomberg L.P

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