With organized retail crime on the rise in San Francisco, American Eagle has filed suit against mall operator Westfield, on grounds that the persistent criminal activity has violated the terms of its lease.
In AE Retail West v. S.F. Centre Limited Partnership, the clothier’s parent company states that Westfield was obligated to keep up the mall’s common areas and had pledged American Eagle “would have quiet enjoyment of the store for the duration of the lease.”
Westfield announced in June it would default on its $558 million loan on the property.
Michelin
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American Eagle has been in the mall for more than 20 years, and for many years it was prime retail space.
“But Westfield let the mall deteriorate into disarray, leaving American Eagle and its employees to suffer and respond to gun violence, physical assaults, burglaries, and robberies,” according to the suit.
The lawsuit shows the level of frustration that merchants are feeling, Rachel Michelin, California Retailers Association president and CEO, told the Northern California Record.
“In the case of Westfield, it used to be a beautiful mall, and now you have Nordstrom and other stores within that mall that are leaving,” Michelin said.
The suit states that Unibail-Rodamco-Westfield, the mall’s parent company, has been investing millions to upgrade other malls nearby, while essentially leaving American Eagle and other stores to defend themselves from rampant crime at Westfield San Francisco Centre.
Proposed new legislation to strengthen penalties for shoplifting and other theft haven’t gained traction among state lawmakers in Sacramento, but state grant money to assist police operations has been approved.
A recent blitz at SF Centre resulted in nine arrests, according to a San Francisco Police Department news release, but District Attorney Brooke Jenkins has not yet announced charges.
While the grant money to help local law enforcement is a good thing, Michelin said, it’s not enough of a deterrent.
“Grants will help prosecution and policing, it helps them build cases, but it’s not a magic bullet,” Michelin said. “If we truly want to see changes to retail theft and organized retail crime, we have to address the unintended consequences from Prop 47 because it really does open up this loophole that allows people to steal without a consequence for their behavior.”
Proposition 47 raised to $950 the monetary value for prosecuting felony theft, but efforts to amend or repeal the law have not moved forward in Sacramento..
“Until we’re able to make changes to Prop 47 related to retail theft, we're really not going to be able to fully get a grip and get a handle around organized retail crime. Or retail theft in California,” Michelin said.
Merchants in Oakland recently staged a strike over unchecked theft that is plaguing small businesses.
Alameda County District Attorney Pamela Price announced a new prosecution initiative last week, but it is not known whether arrests have been made.
Price, described by many residents as soft on crime, also now faces a recall effort.
“I think Californians and consumers are getting frustrated; this notion that we’re just going to throw money at the problem without making the policy changes,” Michelin said. “I think that people are very tired of it. They want to see action, and they want to see our policy makers do what’s candidly in the best interest of law-abiding citizens instead of continuing to protect criminals.”
Proposition 47 took affect 10 years ago, when organized retail theft rates weren’t at the level they are now.
It’s evolved into a very uneven playing field, Michelin said.
“I give them credit, retailers are trying to do everything they can to keep their doors open in the state of California,” Michelin said. “But without consequences for retail theft, you're going to see stores closing, you're going to see stores suing.”
Target is closing stores in Oakland, San Francisco, and Pittsburg this week, citing team member and guest safety. Starbucks is also shutting down seven stores, including two on Market Street.
The number one priority is always the safety of employees and customers and the neighborhoods where our retailers operate, Michelin said.
“But at some point, we also need policy makers to start acting on changes, to protect our communities and protect our businesses, protect our small businesses, and ensure that we can continue to have safe shopping experiences across the state of California," she said.