SAN FRANCISCO-Westfield Group and Forest City Enterprises, the duo investing $420 million in a one-million-sf expansion of the 500,000-sf San Francisco Center, said last week they intend to purchase the 300,000-sf Metreon facility located one-half block away, further solidifying their Downtown retail presence. The deal still requires approval by the San Francisco Redevelopment Agency, which could come in April. Price and terms of the agreement have not been disclosed.

Completed in 1999 at a cost of about $85 million, the four-Metreon is home to a successful 15-screen movie theater and an IMAX theater and other retailers. A Discovery Channel Store was closed in 2003 and a Microsoft store was closed in 2001. The most recent news on the Metreon's website is from 2004.

In addition to being near San Francisco Center, the Metreon is adjacent to Moscone Convention Center, San Francisco Museum of Modern Art and Yerba Buena Center for the Arts, which form the Yerba Buena Gardens area. The ownership entity, Yerba Buena Entertainment Center LLC, is controlled by Millennium Partners and Sony Corp. of America (SNE), and the property sits on a ground lease controlled by the redevelopment agency.

Westfield and Forest City officials say that upon acquisition they plan to take over leasing and management and look to re-tenant spaces along Mission and Fourth streets, possibly with higher-end retailers. Meanwhile, the JV's San Francisco Center expansion is slated for completion in September. That project includes cinemas, a Bloomingdale's and 110 new stores. When complete, the expanded San Francisco center is expected to generate $600 million in annual retail sales on the strength of some 25 million shoppers.

"We expect the synergy of the new retail and entertainment venues at Metreon, Westfield San Francisco Centre and Yerba Buena to create a dynamic retail, entertainment and cultural district from SoMa to Union Square," says Forest City chief executive James Ratner in a prepared statement.

Unlike Sony, which is more used to operating small retail stores, Westfield has interests in 128 shopping centers, including six shopping centers in the Bay Area and 26 statewide. Forest City is a $7.8-billion publicly traded real estate company that developed the 800-unit Bayside Village residential complex in the South of Market district and is working on the restoration of the Public Health Services Hospital building in the Presidio.