[BTinSF]

I'm putting this here because the changes will apparently involve significant alteration to the building as well as what's inside:

Friday, November 7, 2008
Metreon’s new lease on life: Culture, food
San Francisco Business Times - by Sarah Duxbury


Second time lucky? Metreon to get a makeover after struggling for years.

Nearly three years after purchasing the troubled Metreon complex, Westfield and Forest City have settled on a plan for its rebirth.

Sources briefed by the developers say that food and culture rather than retail will drive the reconfigured four-story building. Opened in 1999, it first symbolized the optimism of the dot-com era in San Francisco — and later, its ultimate disappointment.

Building on the cultural density of the Yerba Buena neighborhood — within two blocks are more than a dozen cultural institutions, ranging from SFMOMA to the Cartoon Art Museum— most of the second floor will be converted for cultural uses like museums or performing arts. Meanwhile, the ground floor will feature more than a dozen food options, from standalone restaurants with entrances on Fourth Street to smaller 500-square-foot kiosks like those found in San Francisco Centre’s basement food court. Some of those spaces could end up as retail.

“They are focused on doing something that is really quite unconventional for one of the largest mall operators in the world,” said Julie Taylor, a broker with Cornish & Carey. “The merchandising plan is completely driven by fabulous local concepts, whether that means art, restaurants or retail, and particularly the restaurant operators who are entrepreneurial and local and now oriented to the exterior, making the property engage the street in a much more appealing way than it has in the past.”

The successful AMC movie theater will remain on the third floor; New York’s Tavern on the Green has taken the entire fourth floor, where next summer it will open a 27,000-square-foot restaurant with a 13,000-square-foot terrace.

“These new concepts and ideas will complement the nearby cultural and entertainment activities and increase interest in the complex,” Heather Almond, senior asset manager, Westfield San Francisco Properties, said by email, declining to discuss specifics of the plan or its timing.

The whole project includes about 165,000 square feet of new retail space to lease; the four-story building is 350,000 square feet. “It’s not common to see this much space come to market at once,” Taylor said.

The building itself will see significant changes, including a new main entrance on Fourth Street. The building will also face outward more; restaurants along Fourth Street will have entrances onto the street, and the building will better incorporate the park at its back. With new glass façades on the first two floors, the Metreon will feel much more transparent.

The proposed changes will likely go before the redevelopment commission in December and construction could begin shortly thereafter.

“The Metreon is a property that has not lived up to its potential, and we’re excited about the investment Westfield is making and the very great expertise they bring to retail, and especially downtown retail,” said Amy Neches of the Redevelopment Agency. “I think this will be a successful repositioning of an important asset.”

Several interested tenants have signed letters of intent or are at different stages of negotiations, but nothing is yet final. Brokers all agree that, in this economic environment, until the ink is dry, no deal is guaranteed.

“The building was developed with an inward orientation, and I don’t think it ever worked,” said Carol Gilbert, a broker with CGI. “Westfield is spending a great deal of money to make it work.”

The area doesn’t want for traffic. Taylor estimated that up to 4,000 pedestrians walk past the corner of Fourth and Mission every hour. The sheer number of museums, the nearby convention center and the growing number of hotels clustering South of Market all make the area highly desirable.

The critical mass of museums around there are also a draw to tourists and locals alike.

“They are working hard and thinking outside the box to fill space in a vertical project that addresses entertainment, food and the growing cultural center of the area … I say that SoMa now stands for ‘sort of museum area,’” said Matt Holmes, principal at Retail West.

“I don’t think apparel would be successful down there, so you need to go with another kind of entertainment and cultural mix,” Holmes added, citing the power of the San Francisco Centre and Union Square to the north. “I think they’re really focused on that.”

And food, as it so often is, could be the trick necessary to draw locals into the Metreon at last.

sduxbury@bizjournals.com / (415) 288-4963

Source: http://sanfrancisco.bizjournals.com/...ml?t=printable