Downtown Declines: The Future of Westfield

In June 2023, multinational real estate company Unibail-Rodamco-Westfield (URW) defaulted on the San Francisco Centre’s $558 million loan. The mall’s unknown future raises questions for San Franciscans concerning the city’s downtown safety and vitality.

The once-alive San Francisco mall, formerly called Westfield San Francisco Centre, has yet to recover from the COVID-19 pandemic. This comes after multiple big stores pulled out or have laid out plans to pull out of the center. The list starts with Nordstrom, which has been the largest store in the SF Centre since its opening in 1988. Other stores pulling out of the mall include Banana Republic, Tiffany & Co., Abercrombie & Fitch and others, in total putting the mall at approximately 45% empty.

Downtown San Francisco follows a similar pattern, with recent closures of stores like Whole Foods, Old Navy, Amazon Go and Office Depot. These shutdowns have been attributed, in statements made by these individual retailers about crime, to market conditions or the safety of employees.

The SF Centre is the biggest mall in the city, located in the heart of downtown on Market Street. URW had been in operation of the space since 2002, adding a large extension in 2006 that tripled the size of the mall. Westfield’s default on its loan means that URW stopped paying the property’s initial loan, which was provided by Deutsche Bank. Without the Westfield name, the mall remains open until the future owners of the space decide on the next steps.

In spite of their failure in San Francisco, URW has had greater success in other parts of the Bay Area. While the SF Centre saw a 35% decrease in sales between 2019 and 2022, URW’s property in San Jose saw a 66% increase in sales during the same time period. However, URW has made plans to move out of the U.S. by 2023. This is a strategic move in order to focus on the European market, as the U.S. market has not fully rebounded from the pandemic. URW also makes revenue by selling its properties, which goes towards debt repayment. The recent sales of other URW-owned malls show the difference between selling and handing back to lenders.

In some ways, the fate of the mall has followed the larger patterns in retail over the past several years. “I think a lot of folks have correctly said that the decline of conventional retail began way before the pandemic, with changing retail marketplace dynamics,” said Dan Sider, Chief of Staff for the San Francisco City Planning Department. “The pandemic just sort of accelerated that dramatically.”

The changing retail landscape includes upward trends in shopping online and in suburban neighborhoods. Over the past 20 years, online shopping has only become more accessible, although, since the pandemic, open-air and spacious shopping centers have seen a significant increase in consumers. But downtown shopping in San Francisco has not recovered in the same ways three years after the onset of COVID-19.

Downtown San Francisco has seen its own hit in foot traffic. After the pandemic, the city has yet to return to full swing, especially in the return of the workforce to downtown offices. “The lack of daytime downtown office workers has taken away a significant piece of the mall’s customer base,” Sider said. Compared to other large U.S. cities, SF has one of the highest office vacancies standing at around 32%. This translates to fewer people in the city, meaning fewer people buying lunch or shopping at Westfield down the street.

Dell, an employee at Hollister in the SF Centre, commented on the possible reason why stores are closing and decreasing in sales, “100% the theft, 100% the theft… literally on my first day here, somebody just walked out with a bunch of stuff.”

This was a common theme among other employees within Westfield. San Francisco, has seen the second-highest increase in rates of shoplifting between 2019 and 2022 compared to the rest of California.

In addition to a lack of sales and foot traffic, the San Francisco Chronicle reported that URW cited “unsafe conditions” and “lack of enforcement against rampant criminal activity” as the reasons for Nordstrom’s and other stores’ closures. A lawsuit filed by American Eagle against URW claims that the company “let the mall deteriorate into disarray” as well as put the employees at severe risk. The lawsuit filings also cites incidents of gun violence, physical assault and robberies.

In an effort to combat theft, violence and safety concerns, the San Francisco Centre has significantly increased security inside the mall. Finley Bell ’25 commented on her feeling of safety within the mall. “I like to go with friends anyway, but I feel like it’s safe. They have a lot of security guards, it’s crazy security” she said.

In regards to the state of downtown San Francisco, a survey sponsored by the San Francisco Chamber of Commerce found that only 30% said that they felt safe downtown at night. The survey also found that 77% of city residents do not feel the city is on the right path. “When I do go [downtown], it’s just not pleasant. It kind of feels like it’s one of the worst parts of our city because it’s kind of sad…It’s a ghost town and there are so many stores that aren’t there anymore, and on every corner, there’s someone on drugs,” said Giada Mercer ’25 on her experience visiting the downtown area. Dell also commented on some of the issues downtown besides a lack of foot traffic, “I think it’s definitely having to do with the poverty issue, especially downtown. So a lot of drugs [are] involved and it’s really sad because not much is being done.”

The city of San Francisco has been dealing with an open-air drug crisis, which was declared a State of Emergency in the Tenderloin, which borders the SF Centre, by the Mayor of San Francisco, London Breed, on December 17, 2021. However, the city’s efforts to stop or slow dealers and distribution have not yielded the hoped-for results.

Since its increase in popularity in 2020, the drug fentanyl, which is 50 times more deadly than heroin, has been found in three quarters of overdose patients in 2020. So far in 2023, San Francisco has suffered 346 deaths due to accidental overdoses. If SF maintains its current rate of accidental overdoses, the deaths will have more than tripled since 2017. In addition to the current drug epidemic, San Francisco is also experiencing a homelessness crisis, which has significantly increased in recent years. The Point-In-Time, a count done to survey the homeless population, held in February 2022, found 7,754 people experiencing homelessness within the city, with over half living outside of shelters.

Due to the factors of downtown SF and the ever-changing retail market, the question of what will happen to the SF Centre going forward is still left unanswered. The mall space has been proposed for a new soccer stadium, housing or a Recreation Center.

The future of those employed at Westfield is also in question. There are currently around 72 stores in the mall that all have employees, security and management. From the mall’s Nordstrom closing down, a total of 379 jobs were lost. This does not account for the other retailers closing down. The future of the mall impacts the workers who currently work there but new space in place of the mall would provide jobs as well.

With all of the changing dynamics of San Francisco, there are worries about the city’s future. Adam Lashinsky, a San Francisco-based freelance journalist, commented on how he thinks San Francisco will bounce back.

“Time will solve some of this, the office buildings downtown will be marked down in value… the rents will be cheap, it will be attractive for people to move in,” he said.

Lashinsky is hopeful for the future of the city, but he also recognizes that the city needs to take on some of the issues of crime, homelessness and drugs. “If the city can’t get its other problems under control, then there is no hope. You need to have a clean, safe environment for people to go to work and shop. The city has to provide that.”

All things considered, downtown San Francisco is ever-changing, with a multitude of challenges. The future of the Westfield space is unknown, but new possibilities can bring positive change to the city.

• Author
• Recent Posts

Linda Palmer

Latest posts by Linda Palmer (see all)