Company Losses Are Both Human and Financial

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Westfield: Brief Moment of Glory Gets Buried in World Trade Center Collapse

Probably no other Los Angeles-based company sustained a greater blow from last week’s terrorist attacks than Westfield America Inc.

The Brentwood-based real estate investment trust, part of the business empire of Australian shopping center magnate Frank Lowy, less than two months ago entered into a $400 million, 99-year lease to control and operate the World Trade Center’s 75-store subterranean retail mall. The mall is now rubble.

The company was fully insured against all capital and future income losses, but that was not the primary concern at Westfield’s 200-person U.S. headquarters in Brentwood last week.

“We had 10 staff members on the 17th floor (of the World Trade Center), and one of them is still unaccounted for, so we’re putting all our efforts into locating him,” said Randy Smith, a Westfield executive vice president.

The missing employee is Westfield’s top executive in New York, Bruce Eagleson, a regional vice president and general manager of what had been the Westfield Shoppingtown World Trade Center.

“All our New York employees are out searching for Bruce going from hospital to hospital, posting pictures of him around town. They were all at work with him and saw him at work that morning (of the attack). But we don’t have any word of him yet.”

At the Brentwood headquarters, “we have quite a few people monitoring the Trade Center-related Web sites, scanning lists of names. We’re trying to maximize our efforts as much as possible,” Smith said.

Peter Lowy, chief executive of Westfield America and son of the Australian parent company founder, was at work in Brentwood last week, Smith said, but “is not taking any press calls.”

It was less than two months ago, on July 24, that an ebullient Peter Lowy announced that his company had, after several months of intense bidding, landed the coveted 99-year lease for the World Trade Center’s 427,000-square-foot subterranean mall.

The September issue of trade publication Shopping Centers Today features an article of the deal.

“This is a thrill for Westfield,” Lowy is quoted as having said at the late-July ceremony under the twin towers, attended by the governors of New York and New Jersey. “We’re delighted to participate in the opportunity to invest in this great city.”

In a press release issued that day by Westfield, Lowy described the World Trade Center as “one of the most prominent office and retail complexes in the world.”

And it was. The center’s mall generated annual sales in excess of $900 per square foot, making it one of the highest-grossing centers in the United States. It served 40,000 office workers and 150,000 daily visitors, according to Westfield.

In a statement issued after last week’s attacks, Westfield asserted that its “earnings will not be material affected” by the loss.

The company’s stock closed Sept. 10, the day before the attack, at $16.18 per share, near its 52-week high of $16.70 on March 1. It is in the process of being delisted from the New York Stock Exchange following a $16.25-per-share tender offer completed in April by Westfield America Trust, a Sydney, Australia-based public company that is also part of the Lowy empire.

Los Angeles-based Westfield America Inc. is one of the nation’s largest owners of retail shopping centers, all of which operate under the Westfield Shoppingtown moniker. Its 40 U.S. centers spread across nine states contain a combined 38.1 million square feet of space.

All the U.S. centers and the Brentwood headquarters were closed on Sept. 11, but reopened the following day. In Los Angeles County, it owns the West Covina and Eastland centers in West Covina, the Topanga mall in Woodland Hills, Fox Hills mall in Culver City and Santa Anita mall in Arcadia.

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