American Eagle filed a lawsuit against shopping mall owner Westfield, accusing the company of allowing its San Francisco Centre mall to “deteriorate into disarray.”
American Eagle, which has a shop in the mall, said that Westfield breached its lease agreement and its neglect of common areas in the mall led American Eagle employees to “suffer and respond to gun violence, physical assaults, burglaries, and robberies.”
“Westfield accepted no responsibility for its role in allowing these issues to infect its mall. It shifted all the blame to San Francisco,” American Eagle said in the complaint. “This is not the store American Eagle paid millions of dollars for, or the store that Westfield promised.”
American Eagle is seeking compensation from Westfield for “damages caused by its failures and broken promises.” Westfield declined to comment on the lawsuit.
Lawsuits are a common tactic for retailers seeking to get out of leases, which are typically lengthy and hard to break. American Eagle signed its lease with Westfield in 2017, and it expires in 2028. In June, Westfield said it intended to default on its $558 million loan for the mall and give up control.
The company attributed its decision to the “challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic.”
The mall operator’s decision came after several of the mall’s major stores announced closures, including Nordstrom and Banana Republic.
Once a bustling retail center in the heart of San Francisco, the San Francisco Centre has taken a significant hit in the past few years. Total sales have fallen from $455 million in 2019 to $298 million in 2022, and foot traffic has plunged from 9.7 million visits in 2019 to 5.6 million in 2022, according to Westfield.
San Francisco Mayor London Breed has proposed tearing down abandoned retail spaces, including the Westfield mall.
“We can even tear down the whole building and build a whole new soccer stadium. We can create lab space or look at it as another company in some other capacity,” she said.
According to data provided to CNN by market research firm Coresight, nearly 40 retail stores have closed in Union Square’s zip code since 2020, while dozens more have closed in the surrounding area. Stores have closed for a variety of reasons, including remote work, online shopping, high rents, and a rise in homelessness. Retailers have blamed crime, including theft from organized groups.
As San Francisco’s downtown area has struggled over the last three years, property crimes and retail thefts have risen, according to San Francisco Police Department data.
— CutC by cnn.com
