An expert in receivership of large properties who's based in Southern California has been given the go-ahead by a judge to take over the operations of the San Francisco Centre mall, formerly known as the Westfield San Francisco Centre.
The next phase in SF's downtown mall's existence will now begin under the receivership of Gregg Williams and his firm Trident Pacific. The SF Business Times broke the news of the court appointment, reporting that Williams will now begin collecting rent from tenants in the mall, and begin the process of preparing the property for sale — which will include adding a lot more security.
"The most significant issue relating to the Mortgaged Property is security," Williams wrote in a court filing, per the Business Times. He said he plans to add guards and security canines at all exits and on the sidewalks surrounding the property.
"These actions have proven extremely effective in deterring crime at malls, especially in inner city or downtown locations," Williams said in the filing. "Based on my experience, I believe these security measures will discourage bad actors from engaging in bad acts, and will provide comfort to customers knowing that security at the Mortgaged Property is in place."
Trident Pacific will be paid $30,000 per month for its services. Williams also said he planned to retain the firm Jones Lang LaSalle, or JLL, to serve as third-party operator and leasing agent for the mall.
Last month, one of the tenants in the mall, American Eagle, sued Westfield Properties, accusing the mall operator of "full neglect." Westfield, along with its partner Brookfield Properties, announced in June that they were walking away from the property and ceasing mortgage payments, setting up the current receivership process.
Subsequently, lenders who backed the firms' $550 million mortgage sued their affiliates on September 29, requesting that the mall be placed in receivership rather than foreclosed upon. That suit, the Business Times reports, includes the detail that Westfield allegedly stopped paying to maintain or secure the property as of September 12, "severely and immediately threaten[ing] the integrity, well-being and value of the property, including security and tenant relations.”
Williams, a developer by trade based in Newport Beach who built a practice focusing on receivership during the Great Recession, was profiled by CoStar in May. He said he found the demand for receivers during that last economic downtturn was high, and it led him into the business after being laid off. He has figured out paths to turning large properties around, including large Class A office towers in downtown LA that have had similar vacancy issues to those in SF.
"Our job is to try to come in, stabilize the asset and add as much value as we can," Williams said in the profile. "If we do that, then that's a benefit to both borrowers and lenders."
The next steps will include finding tenants for vacant spaces in the mall, including the massive and vacant Nordstrom space that accounts for nearly half the mall's square footage. And, following that, there will be an effort to locate a buyer who can help make the lenders whole.
In recent months, Mayor London Breed has floated the highly improbable idea of building a soccer stadium in the mall's footprint, which is not likely to factor into this process. Also, a local architect recently suggested that a Legoland outpost could be a great fit for the Nordstrom space.