Date: Dec 04, 2013
Press Release Number: 136-2013
$800 million sale brings the Westfield Group’s overall investment at the World Trade Center site to more than $1.4 billion.
In a continued effort to return the Port Authority of New York and New Jersey to its core mission, the Board of Commissioners today approved the sale of the agency’s remaining 50 percent joint venture in the World Trade Center retail project to the Westfield Group (ASX: WDC) for $800 million.
Today’s action is for approximately 365,000 square feet of retail space at the World Trade Center Transportation Hub, including future bi-level retail offerings in the newly opened WTC West Concourse pedestrian corridor. Westfield also will have a major street level presence along Church Street, Cortland Way and Dey Street and above-grade in Tower 3 and 4. An additional 90,000 square feet of retail space will be added for additional consideration when Tower 2 is developed in the future. The grand opening of the retail complex is expected to include a mix of 150 world-class brands and dining options when it opens in 2015.
Westfield has interests in and operates one of the largest shopping center portfolios in the world, with investment interests in 91 shopping centers around the globe, encompassing roughly 20,500 retail outlets and total assets in excess of $65 billion.
“Today’s $800 million sale of the Port Authority’s remaining interest in the World Trade Center Retail joint venture is a significant step in the Port Authority’s continuing efforts to refocus agency resources on our core transportation mission,” said Port Authority Chairman David Samson. “Westfield’s $1.4 billion overall investment in the World Trade Center retail project, which represents the largest private sector investment at the site, underscores Westfield’s commitment to provide an exceptional shopping experience to all who visit, and we look forward to the site’s grand opening in 2015.”
“Westfield’s $1.4 billion commitment to the retail project generates upfront capital, allowing us to further reduce our redevelopment risk, and additionally deliver critical jobs to the region,” said Vice Chairman Scott Rechler. “The retail experience will provide unparalleled service for the millions of tourists who visit New York, as well as the thousands of New York and New Jersey residents who work, visit, or live in Lower Manhattan.”
“We have greatly valued our long standing relationship with the Port Authority, and will continue to work in close collaboration for the successful realization of the overall project,” said Peter Lowy, Westfield Group co-CEO. “Now, we look forward to 2015 and celebrating the distinctive character and vibrancy of this great city, while introducing Westfield World Trade Center – an iconic, spectacular and world class shopping, dining, cultural, entertainment destination – to New Yorkers and global visitors alike.”
Today’s action comes a year and a half after the agency entered into a 50/50 joint venture with Westfield in May 2012, generating $612.5 million in private sector investment. Today’s $800 million transaction for the agency’s remaining interest represents a 30 percent premium in value and brings Westfield Group’s investment to more than $1.4 billion. In addition, the Port Authority will have the potential to receive an additional onetime payment from Westfield within the first five years after the retail grand opening, should Westfield exceed certain agreed upon return thresholds. This represents the largest private sector investment at the World Trade Center site, allowing the agency to focus on its core mission of being an economic engine and job creator for the New York and New Jersey region.
The Port Authority will retain ownership of the World Trade Center Transportation Hub, and will remain the contractor on behalf of Westfield to construct and deliver the retail space to its tenants. When completed in 2015, the Transportation Hub will be the most integrated network of underground pedestrian walkways in New York City, seamlessly connecting more than 200,000 daily commuters and millions of annual visitors from around the world to PATH, multiple ferries and to 11 MTA subway lines and the redeveloped Fulton Street Transit Center.
The WTC West Concourse, where Westfield will have bi-level retail offerings, is the most recent major construction milestone achieved at the World Trade Center site. In May, crews installed the final two sections of the 408-foot steel spire atop One World Trade Center, bringing the tower to its final height of 1,776 feet. The Port Authority has reached 70 percent of its rent and income target for One World Trade Center, which is expected to be completed early next year. Tenants will include publishing giant Condé Nast, Vantone China Center and the U.S. General Services Administration.
Port Authority of New York and New Jersey
Founded in 1921, the Port Authority of New York and New Jersey builds, operates, and maintains many of the most important transportation and trade infrastructure assets in the country. The agency’s network of aviation, ground, rail, and seaport facilities is among the busiest in the country, supports more than 550,000 regional jobs, and generates more than $23 billion in annual wages and $80 billion in annual economic activity. The Port Authority also owns and manages the 16-acre World Trade Center site, where construction crews are building the iconic One World Trade Center, which is now the tallest skyscraper in the Western Hemisphere. The Port Authority receives no tax revenue from either the State of New York or New Jersey or from the City of New York. The agency raises the necessary funds for the improvement, construction or acquisition of its facilities primarily on its own credit. For more information, please visit http://www.panynj.gov. Like us on Facebook or follow us on Twitter @WTCProgress for updates on the World Trade Center site.
The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping center group undertaking ownership, development, design, construction, funds/ asset management, property management, leasing and marketing activities and employing approximately 4,000 staff worldwide. The Group has interests in and operates one of the world's largest shopping portfolios with investment interests in 91 shopping centers across Australia, the United States, the United Kingdom and New Zealand, encompassing over 20,500 retail outlets and total assets under management of A$65.8bn.