LA WATCHDOG-In March of 2014, the Herb Wesson led City Council and Mayor Eric Garcetti approved a 25 year, $48 million giveaway to help the $28.5 billion Westfield Corporation finance its $250 million development, The Village at Westfield Topanga. (Photo)
But this subsidy championed by Councilman Bob Blumenfield was hardly necessary as The Village at Westfield Topanga is projected to be a homerun as it connects Westfield’s two existing shopping malls, resulting in a mile long corridor consisting of retail establishments that are expected to generate over $1 billion in retail sales. This will also provide Westfield with very handsome rents.
This unconscionable giveaway of $48 million of taxpayer money was detailed in my March 7, 2014 CityWatch column, The Westfield Gift Bag: Did You Really Expect Our City Council to Act in Our Best Interests?
Since March of 2014, the financial wizards at Westfield have been wheeling and dealing.
In June, Westfield spun off its Australian and New Zealand properties valued at A$40 billion into the Scentre Group. This will allow Westfield to focus on more lucrative, high end development opportunities in the United States and Europe.
Westfield announced an $11.4 billion development program, of which $2.4 billion is under construction. This includes $250 million for The Village at Westfield Topanga which is already 95% leased and $1.4 billion for New York City’s World Trade Center (99% leased).
The Company anticipates investing $800 million in its Century City location beginning later this year.
Westfield completed a $3.5 billion bond offering, the largest ever by a real estate investment trust, at a very attractive blended rate of 3.1%.
Westfield finalized the creation of a joint venture for three of its regional malls that generated cash proceeds of approximately $700 million.
Westfield also announced that its centers generated record levels of retail sales and rents per square foot. This will result in annual profits approaching $1 billion.
As a result, the market value of Westfield and Scentre has increased by over 40% to A$41 billion, or about $32 billion in US dollars, excellent news for Frank Lowy, the major shareholder and the second richest man in Australia.
Today, the Westfield juggernaut manages shopping centers valued at $28.5 billion and which are home for 7,400 retail outlets that generate $17 billion in retail sales.
Unfortunately for the taxpayers of the City of Los Angeles, the City Council made the conscious, but ill informed, self-serving decision to use our cash strapped City’s limited funds to subsidize the Westfield Corporation and its controlling shareholder, Frank Lowy, instead of using that money to repair and maintain our streets and sidewalks.
Voters will remember this financial malfeasance (as well as all the other giveaways in DTLA) when City Council President Herb Wesson and Mayor Garcetti come hat in hand pleading with us to approve a $5 billion tax increase to fund the repair and maintenance of our lunar cratered streets and broken sidewalks or a half cent increase in our sales tax to finance transportation projects.
But unless there is real reform of the City’s budget and finances, the odds of the skeptical voters approving a tax increase are slim, real slim.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 13 Issue 43
Pub: May 26, 2015
