Exclusive Q&A: Westfield Corp COO On Trends In The Industry
Westfield Corp is busy these days. With a $950M reno of Westfield Century City underway and ongoing projects, including the Village at Westfield Topanga, it is an exciting time for the firm.
Yet anti-development initiatives on the ballot could mean bad news for the entire industry, according to Westfield Corp COO Bill Hecht.
Bill is set to talk more on the issue at the Bisnow Future of SoCal event.
Bisnow: What trends are you seeing in the industry?
Bill: At Westfield, we’re looking at the retail trends coming out of major cities around the world and, while we have many centers in California, we’re very focused on assets there and around the world.
When you think about it, trends are really set out of major cities—you’ll think of a street trend in fashion that spreads throughout the world. Trends are being driven out of places like New York, London, Los Angeles and Milan—places where Westfield has, or will have, flagship assets. I think from a fashion perspective, we see these major cities being the trendsetters and we view our projects as being key to the propagation and amplification of those trends.
The US went through a pretty tough time in the '70s, '80s and even in the early '90s with many cities declining in population and in their stature or their ability to be the leading sense of culture, and I think that’s really reversed now.
If you look at where people want to live, work and play, it’s become much more urban primarily [because] those retiring are still healthy enough to really enjoy retirement, and Millennials and those starting out their lives and careers [are] wanting that urban experience as well. So you have sort of the bookends that are finding urban living to be much more interesting, exciting and convenient. I think that’s why you’re seeing downtown LA come back with such strong growth.
Bisnow: Do you expect the current trends to continue?
Bill: I do expect it to continue. I think what cities have to continue to do is invest in their core infrastructure.
One of the biggest challenges LA has is vehicular travel is quite a challenge. We’re very supportive of the City of LA to put in...infrastructure because then, ultimately, you could live downtown and get to Century City pretty quickly with proper transportation. Right now, that travel experience is unpredictable at least and frustrating at most if you’re in a car. I think it will be important for the City of LA to stretch mass transportation infrastructure to the Valley in a much more meaningful way as well. San Diego is also investing heavily in light rail.
All these things I think are very interesting, very exciting for cities but, most importantly, exciting for how people really want to live. I don’t see that desire for urban living changing. I see that pendulum swinging really hard and staying there for quite some time.
Bisnow: Can you update us about the $950M renovation of the Westfield Century City (rendering above)?
Bill: There aren’t many developers around the world that would do what we’re doing.
Century City was a 100% leased shopping center with terrific retail, and we chose to demolish two-thirds of it to do this expansion because we believe the potential for even greater density of retail...We’re doubling the size of the asset, but it still is very intimate in its design, very intimate in its experience.
The center will continue to expand its position, it’s one of the few centers in LA that’s really modeled after a global or international retail center. You have a full-service grocer, a full-service gym and other micro-gyms, a pharmacy and the first Eataly on the West Coast, which includes a very large restaurant presentation as well as at least another 20 to 25 eateries. What most retail centers in the US failed to do for quite some time is offer a very good reason for somebody to come to the shopping center two or three or four times a week. When you service daily needs with the grocery store, daily needs with the gyms, and a plethora of restaurants, you can build that sort of habitual customer engagement that I get very excited about.
Topanga is another very large retail property that we’ve been investing heavily in for the future that’s done very well for us. There we have Target and Neiman Marcus in the same center—it was one of the first centers to have both. If you think about it, that’s how people are shopping today. We expanded the asset with The Village of Topanga with gyms, microfitness, Costco, UCLA Health and co-working space…all once again servicing daily needs.
Bisnow: What do you think about the anti-development initiatives, including the one on the March ballot?
Bill: We’re tracking it very closely for sure. If we were a selfish corporate citizen, I would say that it’s maybe not a bad thing for Westfield because we’re already in construction on most of our projects here. We’re already doing what we’re doing. We already have a specific plan for Warner Center, which the Promenade project will fit nicely into. The fact is we’re sort of ahead of some of the issues related to the moratorium, and we’ve, obviously, done that intentionally.
Having said that, we aren’t only motivated by our own corporate self-interest—that’s not how we think. Westfield thinks that these initiatives are a really bad thing for any city, including Los Angeles. When you simply look at the level of capital investment these cities require for simple maintenance, let alone to do major infrastructure work, whether it be at the airport, the rail or public transportation system those are incredibly expensive projects. And if a moratorium is placed on a given city, then by definition your tax base will stop growing. When it stops growing, there’s no way you’re going to be able to afford the infrastructure necessary for the city to continue to support its growth and investment in itself, let alone maintenance. I think it’s vital this moratorium not be put into place.
None of this means that there shouldn’t be proper community input into development projects, because there should be. Our company has gone to extraordinary lengths to involve the community in our various projects—they are after all the end customer for our centers. For the Village project next to Topanga, for example, we had over 200 community meetings. We got a tremendous amount of feedback and adjusted our plan appropriately. We listened, and I think it’s incredibly important all developments and developers take that as their own civic responsibility to listen to the community and to do developments that are appropriate for the community in which they want to work.
Hear more from Bill and our other speakers at Bisnow's Future of SoCal event on Nov. 15 at the Millennium Biltmore Hotel.
