Exhibit 99.1

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
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AT THE COMPANY
Neil H. Koenig
Interim Chief Financial Officer
(212) 949-1373

            FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
         ANNOUNCES DEVELOPMENT IN ZONING SUIT AFFECTING PARK PLAZA MALL

FOR IMMEDIATE RELEASE - December 9, 2003 - First Union Real Estate Equity and
Mortgage Investments (NYSE:FUR) today announced that the Supreme Court of
Arkansas had reversed a June 2002 trial court ruling that the zoning of a
proposed mall site in Little Rock, Arkansas had reverted from commercial to
residential zoning in 1991. If developed according to plan, the new mall would
be in competition with Park Plaza Mall, also located in Little Rock and owned by
First Union. The developers of the proposed mall, Simon Property Group and
Dillard Department Stores, Inc., had appealed the decision of the trial court to
the Supreme Court of Arkansas. Dillard owns and operates two department stores
which anchor Park Plaza Mall.

The ruling of the Supreme Court of Arkansas, issued on December 4, 2003, found
that the complaint brought in the trial court was barred by the doctrine of
laches. The Supreme Court ruled that, by filing their action after the
developers of the property had purchased the property and incurred investment
costs with respect to the property, the adjacent landowners were barred from
pursuing their complaint.

Plaintiffs and defendants in the zoning challenge, including the city of Little
Rock, previously stipulated in the trial court that petitions for a city-wide
referendum on the Little Rock Board of Directors' approval of the development
plan for the proposed mall complied with the minimum requisite legal standards
for a referendum. The Arkansas Supreme Court expressly stated that the issue of
the legitimacy of the referendum was not affected by its ruling. In the event
that the sponsors of the referendum procedure cause it to go forward, the
referendum would likely proceed unless otherwise enjoined by a court of
competent jurisdiction.

The purpose of the referendum is to overturn the determination by the Board of
Directors of the City of Little Rock as respects the zoning for the proposed new
mall. If a majority of voters at the referendum fail to vote to overturn that
determination, that result could have a negative impact on Park Plaza Mall.

First Union is not aware of the plans of the developers with respect to the
pursuit of the new mall in light of the ruling of the Arkansas Supreme Court. It
is not possible to predict the ultimate



effect of the opinion of the Supreme Court of Arkansas on the development of the
new mall and, thus, the effect on the Park Plaza Mall. The operations of Park
Plaza Mall are currently unaffected by the ruling of the Arkansas Supreme Court.

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Certain statements contained in this press release that are forward-looking are
based on current expectations that are subject to a number of uncertainties and
risks, and actual results may differ materially. The uncertainties and risks
include, but are not limited to, the risk that adverse judicial rulings, adverse
referendum results or other negative events will affect the ultimate outcome of
these matters resulting in possible impairment to the value of the Park Plaza
Mall. Further information about these matters and the risks generally with
respect to First Union can be found in First Union's Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q filed with the Securities and Exchange
Commission.


First Union Real Estate Equity and Mortgage Investments is a NYSE-listed real
estate investment trust (REIT) headquartered in New York, New York.