Australian Clan Maddening Mates At Towers Space

Westfield America, which had just signed a 99-year lease to manage the World Trade Center’s retail facilities when the towers came down on Sept. 11, is now vexing urban planners working on the redevelopment of the site.

Sources familiar with the planning process told The Observer that the company is pushing for a massive retail complex that would upset many of the agreements informally reached among city and state authorities about how to redevelop the site-among them, a plan to restore some of the five streets that were “de-mapped” to make way for the towers more than 30 years ago.

“They said, ‘You can bring Greenwich Street through [the site], but not any of the east-west streets, and we want this huge eight-acre platform with above-grade and below-grade retail,” said one source working closely with planners on the project. With most parties eyeing almost half the 16-acre site for a large memorial at the southwest corner, that would account for almost the entire remaining footprint.

Westfield, which has acquired 108 malls, called “Shoppingtowns,” in New Zealand, Australia, Britain and the U.S. with help from its corporate parent in Sydney, Australia, had a winning combination with the World Trade Center’s mall, a giant aboveground pedestal upon which the two towers stood. But the design of the space, before and after Sept. 11, was widely criticized by neighborhood activists and planners for cutting off several streets from the World Trade Center site. In the rebuilding process, most parties agreed to “reimpose” at least some of the street grid. The Lower Manhattan Development Corporation characterized the old building complex as “a world apart from local street life and neighboring buildings” in its April blueprint for redeveloping the site. Plans drawn up by Larry Silverstein, who built 7 World Trade Center and held a lease on the Twin Towers, would allow Greenwich Street to continue through to the northern edge of the site.

But Westfield may not be so accommodating.

“Westfield is making certain demands, and the Port Authority is telling the [LMDC] that certain things have to be done because Westfield is making these demands,” said a source familiar with the wheeling and dealing between the two agencies. The Port Authority owns the land on which the Trade Center stood; the LMDC holds the purse strings to over $20 billion in federal aid for rebuilding lower Manhattan.

Sources at the Port Authority denied that the agency is pushing Westfield’s agenda.

“We’re hoping that we will be able to come up with a solution that makes the leaseholders feel happy, but not at the expense of the other major players,” a source at the Port Authority told The Observer . “Not certainly at the expense of the families [and] the downtown residents.”

The problem, others familiar with the planning process point out, is not insoluble. Not every large, aboveground retail environment has to be like a suburban megamall, they say. “There have been contiguous retail developments in many cities throughout the world,” said Peter Lowy, the chief of American operations for Westfield and the son of the company’s founder, Frank Lowy-the second-richest man in Australia. He gave the example of the Galleria Vittori o Emanuele in Milan: “It’s an urban development which is contiguous, but it isn’t a suburban mall.”

One source close to planners working on the site said they were looking at just such a possibility: restoring some east-west “streets”-say Cortlandt Street-as an open-ended indoor arcade, like the Galleria in Milan. That plan would connect Church Street and a new transit hub, via an aboveground retail corridor, to the Winter Garden’s massive glass dome over a sunken West Street covered in parkland; the refurbished Winter Garden is conceived as a grand entrance to the Battery Park City complex, opening up into the retail spaces at the bottom of the World Financial Center. Such a move would satisfy Westfield’s need for contiguous space that doesn’t feel subterranean-like the awful underground mall at Penn Station-but restores a sense of the original street grid, and connects Battery Park City and the World Trade Center site with the rest of lower Manhattan. While it wouldn’t reflect the character of a typical New York streetscape, it could come close-without sacrificing the commercial advantages of a large indoor space with a variety of retailers, big and small.

But critics close to the current negotiations said that Westfield is developing a tin ear when it comes to what types of businesses a rebuilt mall should attract. This has the company running afoul of community activists, who have been calling for a business district that would give the residents of Battery Park City and lower Manhattan access to goods and services that New Yorkers in other neighborhoods take for granted.

“Instead of the regional mall, [Westfield] is talking about Best Buy and Costco and that kind of stuff,” said the source, “which I don’t think plays very well in New York.”

“We are not now and never have intended to build a suburban mall there,” countered Mr. Lowy. “The one thing we have said to the LMDC and the Port [Authority] is that we understand the issues in New York City. We will need to fit into the needs of all the constituents here, but in the end we are one of the constituents. We believe we have the retail expertise and innovation to build the right retail development … and as all of the ideas and positions are thrown into the mix, our expertise in that area should not be discarded.”

What plays well in New York, however, may be a topic of debate. The retail mall, run by Westfield America for scant weeks before the terrorist attack, had sales upwards of $900 a square foot annually, about three times the national average.

And Westfield was, before Sept. 11, bullish on the mall’s future, in some cases tripling rents on retail stores from what the Port Authority, the previous landlord, had charged. (The company has thrived despite notoriously high rents for retailers; one Australian newspaper referred to the company’s leasing division as the “fleecing division.”)

But Judy Duffy, the assistant district manager for the local community board, remembers when Westfield was just getting started there. Part of the company’s branding includes little red “kiddie cabs” for children to use getting around its malls; Westfield executives were finally persuaded that New Yorkers would be more harried than impressed by hot-rodding toddlers underfoot at the World Trade Center.

A small example, but a telling one. Westfield, which began from a delicatessen in Sydney’s western suburb of Blacktown just before suburbs began their inexorable sprawl in the 1950’s, is a funny fit for Manhattan’s financial district.

The company was brought into the deal at the World Trade Center after Mr. Silverstein offered to include it in his bid for the towers, citing its retail expertise and making use of his onetime membership on Westfield’s board of directors. The company has had a presence in the U.S. since 1977, but was undertaking a major expansion. Late last year, Westfield completed the purchase of Rodamco North America, a company that controlled 35 megamalls (and its biggest U.S. competitor). The World Trade Center was a part of that initiative, and many locals supported the company’s efforts.

“We’ve obviously made it clear that we want to see the retail center rebuilt, and something … along the lines of what they had replaced,” said Paul Goldstein, district manager of Community Board 1. “That was certainly a great amenity for lower Manhattan.”

The day before the attack, the Daily News ran an article about plans that Westfield had presented to the Port Authority to expand the retail center-a provision of the company’s lease with the Port Authority that allowed Westfield to elevate the center’s plaza an additional 30 feet to accommodate another 150,000 square feet of retail space. “The Sky’s the Limit for WTC Retailing,” the headline gushed. Adding that to the existing 425,000 square feet would have given Westfield a sizable retail complex-until the World Trade Center was lost.

Tentative plans leaked by Port Authority officials to the New York Post in late April proposing an underground transit passageway flanked by 460,000 square feet of retail space beneath the World Trade Center site would not come close to recouping the square footage or value of the retail space Westfield had demanded from the Port Authority as a condition of its original lease.

But the landscape has been transformed, literally and figuratively, and now Westfield finds itself protecting an asset that has been the site of countless solemn memorials.

Families’ groups have been vocal about keeping the profanity of commerce from the sacred site: When Century 21 opened up facing the east side of Ground Zero, family members complained to the local community board that it was visible from the platform erected for families to watch the recovery efforts taking place below.

Westfield’s success in recouping its initial investment in the site is dependent, of course, on cooperation from countless other parties, and the company may yet find its negotiating position weakened.

For instance, while the Port Authority controls the site and is bound to certain provisions of Westfield’s lease, the LMDC controls the federal money earmarked for the development of a downtown transit hub; next month, the agency will issue a plan for redeveloping the transportation infrastructure downtown.

“If we put the transit hub on Fulton Street,” said one LMDC board member, “all of a sudden you put it off Port Authority and Westfield property; all of a sudden Westfield doesn’t have that big entrance, [and] the property isn’t as valuable because we just took the transportation hub out of there.

“I think … it’s a bargaining position that LMDC can come from,” added the source.

Also pressing on Westfield is the question of how much money Mr. Silverstein will be able to recoup from his insurers on the destroyed buildings. According to sources at Westfield, Mr. Silverstein and Westfield held the insurance money in common; the payout is the only money available to rebuild. On June 3, U.S. District Judge John Martin refused to make a ruling on the dispute over whether the terrorist attack on the Twin Towers constituted one occurrence or two. Mr. Silverstein reaps double the payout if the latter interpretation prevails in September, when the matter goes before a jury. Sources at Westfield have told The Observer that without the double payout, Westfield will have to find some other money for rebuilding-if it’s feasible to rebuild at all.

The horns of the dilemma sprout from a general ambivalence about what the World Trade Center site stands for post–Sept. 11, and how radically the terrorist attack may have transformed the place from a site of brisk commerce to one of doleful remembrance.

“Westfield’s position of how they want this thing formulated is about what’s best for Westfield … not necessarily about what’s best for New York,” said one source on the LMDC’s board. “Who’s wagging the dog here?”

Ultimately that question, like all questions, is a political one.

“The families’ interest in the site and the commercial interest are at odds; there’s no doubt about that,” a source close to the negotiations told The Observer . “And I think it’s the politicians that decide the balance between the two.