American Eagle sues Westfield, accusing SF mall operator of neglect that permitted 'rampant criminal activity'

Apparel giant American Eagle has filed a lawsuit against the former operators of Westfield Mall in downtown San Francisco, alleging it breached lease agreement by failing to maintain the property, allowing it to "deteriorate into disarray," which the retailer said, resulted in the company and its employees being victimized by criminal activity.

The lawsuit, filed on Monday in San Francisco Superior Court, blasted Westfield and co-owner Brookfield Properties, for what it called its "failures and broken promises," saying the retailer believed it was leasing a premiere space with a street-front entrance at its Market Street site. 

But instead, American Eagle said that Westfield, which received millions of dollars in annual rent, failed to maintain the common areas of the mall under its lease agreement and said that led to what Westfield has publicly acknowledged as "rampant criminal activity" on and around the property.

The lawsuit said the decline began slowly but then grew into full-blown neglect. The retailer said over a one-year period starting May 2022, the company reported more than 100 serious security incidents at the retail site, from robberies to stabbings and other assaults.

"On multiple occasions, patrons have brandished firearms while verbally assaulting the store’s employees. American Eagle employees have suffered multiple physical attacks," the complaint stated. "In one instance, a patron even threatened American Eagle staff with a machete." 

SEE ALSO: Ikea to open downtown San Francisco location as other retailers flee

In June, Westfield and Brookfield announced it would default on their $558 million loan on the property after more than 20 years of successfully operating the site. 

In making the announcement, Westfield said it was a difficult decision, but that "challenging operating conditions" in the city's downtown led to a decline in sales, occupancy and foot traffic. 

The lawsuit said that Westfield’s abandonment of the property meant American Eagle and the other tenants of the shopping center were left "to clean up Westfield’s mess."

The complaint also noted that the mall operator had the means to make investments to the site, and had proven that at its properties including its Westfield Valley Fair Shopping Center in San Jose, which received a $1.1 billion expansion and saw subsequent record sales. 

SEE ALSO: A tale of two Westfield malls: San Jose flourishes, San Francisco struggles

"Rather than take accountability for its actions and invest in fixing its mistakes, Westfield decided to leave its tenants, the city and people of San Francisco, and investors in San Francisco real estate holding the bag," the lawsuit alleged.

In a statement released to KTVU on Tuesday, Westfield Management said, "Westfield is declining to comment because we have not been served the lawsuit." 

Brookfield Properties did not immediately respond to our request for comment.

The legal action came just weeks after Nordstrom closed its Bay Area flagship store at the San Francisco Centre, becoming the latest tenant to move out of the beleaguered mall.

American Eagle has remained at the shopping center and has not indicated plans to shutter that location. The Pittsburgh, Pennsylvania-based retailer said it has taken steps to protect the store and its workers by closing access to the street front entrance on Market Street and hiring additional security officers. 

It said it was seeking "all actual and compensatory monetary damages" related to the alleged breach of contract.

"Westfield cannot walk away from the harm that it has caused without consequence," the lawsuit said. "It must be held accountable for the damages caused by its failures and broken promises."