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Posted Oct 23, 2009, 2:58 PM
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BANNED
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Join Date: Jun 2006
Location: San Francisco & Tucson
Posts: 24,088
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YES!!
Quote:
Friday, October 23, 2009
Target could be bull’s-eye for Metreon
Retailer takes aim at San Francisco
San Francisco Business Times - by Sarah Duxbury
Metreon owners Westfield and Forest City have recently pulled back on several preliminary lease deals at the center and are said to be negotiating to lease an entire floor to Target.
“Westfield has gone silent on numerous deals on the second floor to make way for a single tenant,” said Matt Holmes of brokerage Retail West.
Westfield is in the process of a much-anticipated repositioning of the retail center at Fifth and Mission streets, after buying the struggling project in 2006. The new Metreon is a key part of the revitalized Yerba Buena culture district.
If the Metreon lands Target, it would be a coup after planned headliner Tavern on the Green filed Chapter 11 last month. It would also mark a stark departure from their stated reimagining of the Metreon as a food and culture-centric locale dominated by local stores rather than chains.
Holmes said his firm was working with the Museum of Craft + Design to lease space at the Metreon, but was told two weeks ago that Westfield would not sign a lease. The founders of the Pop Art Museum, which had a signed letter of intent to take up to 50,000 square feet of the second floor, said Westfield halted lease discussions in July. And Rhonda Diaz, a broker with Terranomics, said that preliminary negotiations between Westfield and an entertainment client interested in over 25,000 square feet fell apart in recent weeks.
Target interested in San Francisco
Target has had an on-again, off-again quest for a downtown San Francisco store site for several years. A party with direct knowledge of their search confirmed the discussions with the Metreon and said “they are further along than they have been.” But the source cautioned that there is no deal yet. Target said in an email that “at this time, it would be premature to confirm any specific plans.”
Westfield declined comment on the terminated lease discussions, or its negotiations with Target or other prospective tenants.
Rumors of Target’s interest are circulating widely among retailers who have signed up for space at the reworked Metreon, where Westfield plans to break ground on an extensive renovation in January.
“As far as bringing people to the center, of course, it’s hard to beat,” said Thomas Lefort, an owner of Bay Bread, which will open one of its popular Boulanges in the Metreon. “But it’s not what we were told to expect for that space. I’m not sure what I think about it.”
The roughly 70,000-square-foot second floor of the four-story, 360,000-square-foot structure had been designated by Westfield for primarily cultural uses.
“It’s disappointing because Westfield went so over the top, in my opinion, on selling their merchandising plans and a point of differentiation for the Metreon, and what comes out of it is really a big box and an extension of San Francisco Centre,” said Holmes. “We have the mall moving south right now.”
Part of redevelopment area
The Metreon’s land is owned by the San Francisco Redevelopment Agency. Bringing in a big box retailer wasn’t what the agency expected under Westfield’s lease, but it would probably be permissible, said Amy Neches, manager of project area planning and development at the redevelopment agency.
Westfield and Forest City bought the Metreon in 2006, months before they completed their expansion of San Francisco Centre. Metreon had struggled since opening in 1999; only its movie theaters ever succeeded. In 2008, the owners said they would bring in up to 165,000 square feet of new retail, move the main entrance to the middle of Fourth Street and redesign the building to make it more open and customer-friendly. Tavern on the Green would have taken the fourth floor for a 40,000-square-foot restaurant. The redevelopment agency approved those plans in March 2009.
“They talked about how different they were going to be … but at the same time, I understand it,” Holmes said of going with a blue-chip tenant in this economic climate.
Prospective tenants disappointed
Some of the thwarted tenants who thought they had a lock on the Metreon are less sanguine.
John Atanasio and Robert Imber, co-founders of the Pop Art Museum, started looking at the Metreon in February for a museum they conceived as up to 50,000 square feet of gallery space for artists like Warhol, Haring and Rauschenberg, as well as space for up-and-coming contemporary artists, classrooms, interactive studios and a retail store.
The Pop Art Museum got a signed letter of intent just after receiving its nonprofit 501(c)(3) status on May 29, Imber said, but a lease never followed.
Westfield and Congresswoman Nancy Pelosi were critical to obtaining that 501(c)(3) status. Atanasio and Imber said that Westfield wrote two letters to the IRS on the Pop Museum’s behalf, including one dated May 15 that urged the federal agency to grant the museum nonprofit status no later than June 1, “or the museum may lose the opportunity to secure the Museum’s flagship location at Westfield Metreon,” according to a copy of the letter viewed by the Business Times. Westfield also wrote an earlier letter April 8 that said it was working on a lease with the museum.
“The meetings we had, we met their criteria, we fully believed we had the space,” Atanasio said.
In July, Westfield suddenly changed what it said it was looking for, Imber said.
“Things were promised and pretty much at the 12th hour were grossly changed,” Imber said.
sduxbury@bizjournals.com / (415) 288-4963
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Source: http://sanfrancisco.bizjournals.com/...26/story2.html
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Thanks, Gordo. As you may know, I'm now in AZ but that building is only a block from my SF condo and I'm very interested in it.
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