Westfield to sign deal at rebuilt World Trade Center

Jonathan ChancellorJuly 28, 2011

The Port Authority of New York and New Jersey has reportedly struck a deal with shopping centre operator Westfield Group to develop shops and restaurants in and around the World Trade Center site, according to the Wall Street Journal.

The newspaper has suggested Westfield has agreed to the terms of a deal in which it would contribute $612.5 million toward construction costs of 365,000 square feet of retail space.

In return, Westfield will get a 50% stake in the development.

“We are excited to be moving forward in partnership for the World Trade Center retail,” Westfield CEO Peter Lowy says in a statement. “We look forward to creating a world-class shopping experience for lower Manhattan and the City of New York.”

The Port Authority will cover the rest of the cost, which is expected to be $1.55 billion, with the help of a $200 million insurance payment.

Westfield intends to bring a mix of retail, from high-end stores to restaurants geared towards the growing lower Manhattan population.

With a target opening date of 2015, it is envisaged that it would be reminiscent of the design of the Time Warner Center, with the retail spread among the lower floors of office towers along Greenwich Street and underground concourses that will connect with the Santiago Calatrava-designed transit hub.

It is also expected to feature some locations with views of the memorial planned for the site.

It would mark a major upgrade from the retail at the World Trade Center before the 2001 terrorist attacks, according to the WSJ.

It notes that previously the stores and restaurants there generally catered mostly to office workers, instead of the affluent young families that are increasingly settling in the Financial District.

Westfield won the rights to redevelop that retail in mid-2001 but sold its stake in the property back to the Port Authority after the attacks.

The firm has long expected to return, and in late 2007 struck a similar agreement that ultimately was scuttled amid economic woes and construction changes at the site.

Since then, the amount of space to be developed has been reduced from the 42,500 square metres initially planned, in large part to because one of the buildings planned for the site, 2 World Trade Center, has since been shelved indefinitely.

The Port Authority and Westfield are still finalising the terms of the deal, but broad outlines have been agreed upon, people familiar with the matter say. The agreement is expected to be presented to the Authority’s board in the fall.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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