San Bernardino Defends Carousel Mall Redevelopment as Legal

Was the law broken?

The state housing department has withdrawn its approval of the redevelopment plans for the 50-year-old Carousel Mall in San Bernardino, California.

The state's Department of Housing and Community Development accused the city of failing to negotiate with affordable housing developers who had shown interest in acquiring the land, alleging that the city prioritized other developers instead.

However, San Bernardino officials have said that they did negotiate with affordable housing developers but failed to include any description of the negotiations in documents filed with the state.

Nathan Freeman, the city's director of Community, Housing, and Economic Development, explained that there are emails from previous city staff that show negotiations with BLVD Capital and Alliant Strategic Development were carried out during the time the mall property was made available in accordance with the Surplus Land Act.

The Economics

The two-story Carousel Mall opened in 1972 and had 53 stores, including three anchors. However, it closed in August 2017, and the 43-acre shopping center owned by M&D Properties has remained shuttered since then.

In March 2021, Renaissance Downtowns USA and ICO Real Estate Group, both based in Los Angeles, were chosen by the city to redevelop the mall into a mixed-use residential, entertainment, commercial, and office development.

The developers proposed replacing the mall with a Downtown urban village with 3,500 homes inside an urban-retail complex with river paths and thousands of trees.

Dallas-based Lincoln Property was added to the redevelopment team in August 2021 but withdrew from the project in October of the same year, citing economic reasons.

Economic reasons

In December 2021, the City Council voted to spend $8 million to demolish the fire-damaged mall. The land is owned by the city, and officials have pursued an exclusive negotiating agreement with a preferred developer, which is allowed by the classification of the Carousel Mall property as a lot planned for future development.

San Bernardino officials chose Renaissance Downtowns USA and ICO Real Estate Group to lead the project in March 2021, and negotiations with BLVD or Alliant were deemed unsatisfactory.

Therefore, the only violation San Bernardino committed was failing to include any description of the negotiations with BLVD or Alliant in the documents filed with the state in August 2021. Freeman said that this was merely an administrative error by prior staff.

The state department has given San Bernardino officials until May 15 to rectify all violations, or the city may be penalized on any proceeds from the sale of the Carousel Mall property.

The city's officials have contested the state's claims and remain confident that the city operated within the law in pursuing an exclusive negotiating agreement with a developer interested in redeveloping the Carousel Mall property.

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This article originally appeared in San Bernardino denies it violated law on Carousel Mall redevelopment