Tuesday, April 26, 2011

Sacramento Bee: Westfield Downtown Plaza Said to Be For Sale

Plaza up for sale; many dream of a turnaround

Published: Tuesday, Apr. 26, 2011 - 12:00 am | Page 1B
 
Sacramento's long-struggling Downtown Plaza shopping center is on the sales block.
That's according to the Wall Street Journal, which reports that Westfield Group of Australia has begun seeking buyers for the Sacramento mall and 16 other underperforming centers in seven states.

Westfield's goal: Take advantage of an uptick in the economy to sell the properties, then use the proceeds to reinvest in more successful centers, such as its Galleria mall in Roseville.

Westfield officials had no comment. Neither did Evercore Partners, a New York-based advisory firm that's been hired to market the mall portfolio.

The news comes almost two years after city officials asked Westfield to find a buyer if it wasn't going to make long-discussed improvements. Westfield officials said then they'd sell "under certain circumstances."
They may be more motivated now.

Assistant City Manager John Dangberg said Monday that the city "clearly is interested in seeing reinvestment in the center and if through a purchase that could happen we'd be very supportive."

Michael Ault, executive director of the Downtown Sacramento Partnership, said he was hopeful a sale could lead to new investment in the center.

That's all the more important now, he said, when signs of life are emerging elsewhere in the downtown core. The mall "can't (be allowed to) deteriorate to the point where it becomes a distraction to the opportunities around it," he said.

He cited in particular efforts to bring retail and residential development to the 700 and 800 blocks of K Street, just east of the mall.

A final development agreement for those blocks is set to go to the City Council in June following productive talks with two development teams, said Maurice Chaney, a spokesman with the city's Economic Development Department.

Garrick Brown, regional research director for real estate brokerage Cassidy Turley BT Commercial, said numerous private investors would be interested in the mall if Westfield is a motivated seller.

"If they can get it for dimes on the dollar," he said of prospective buyers, they might have the capital needed to make the renovations Westfield has long considered but been unable to complete.

Any turnaround strategy, he added, would include making "some incredible deals" to lure top retailers back to the mall.

Brown said he sees potential in the 39-year-old mall.

"If (an owner) can hold on for three or four years, I think we'll see a big spike in downtown housing and a lot of other development," he said. Under those circumstances, "the fortunes of the center could change very quickly."

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