Westfield sued over plans to ditch Fulton Center

A plan from the Westfield Corporation to exit its 20-year retail lease at Fulton Center early is being met with a lawsuit from the New York City Transit Authority. As first reported by Bloomberg, the NYCTA sued Westfield after the mall operator announced it wanted to terminate its lease 10 years in. The suit, which aims to keep Westfield as the mall’s operator, claims the transit agency would suffer major financial losses that could impact commuters if Westfield pulled out of the lease.

Westfield signed a 20-year lease to operate the retail space, known as Fulton Center Stores, in December 2013. The shopping center opened in November 2014 and helped generate more revenue for the MTA amid financial challenges and as the area recovered from September 11.

The transit hub connects to nine subway lines, offers an underground passageway for PATH trains to New Jersey, and features 63,000 square feet of commercial space, the majority of which is for retail use. The station is one of the busiest transit centers in the five boroughs, experiencing an average of 30,000 daily visitors.

A representative for Westfield told the transit authority that Fulton Center did not “work for” the company, and in a letter, Westfield’s lawyers said that operating the mall was “financially unsustainable,” as reported by The Real Deal.

According to the NYCTA, which is run by the MTA, Westfield has the right to end its lease early but only under certain circumstances like structural issues. However, none of those circumstances apply to the current situation.

“Westfield’s unauthorized cessation of its operations and termination of the lease would adversely affect not only the retail establishments in Fulton Center that Westfield subleased, but also members of the transit public who are customers of these retail outlets,” the suit alleges.

“Westfield’s improper termination of the Lease also would adversely impact the goodwill that NYCTA has developed with the public by having made these retail establishments available to transit users.”

Fulton Center is the second Lower Manhattan transit hub Westfield has wanted to ditch. In August 2022, they announced plans to sell their World Trade Center mall located within the Financial District transit complex to focus on European markets, according to Commercial Observer.


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