San Bernardino keeps trying to find a solution to Carousel Mall

Despite having a development team in place, deciding what to do with the abandoned downtown property has been difficult. Even agreeing on a demolition plan has been an obstacle. 

 

Last August, it looked like San Bernardino was on track to solving one of its biggest and longest-running problems.

The city council signed an exclusive negotiating agreement with the developer it selected to overhaul Carousel Mall, the abandoned shopping center that sits on 43-acres in the heart of downtown.

That meant the development team of Renaissance Downtowns USA and ICO Real Estate Group had about six months to put together a detailed report explaining how it plans to develop the property. Typically, such a report includes possible zoning changes, modifications to the general plan, a cost estimate, construction timeline, financing plans and a list of possible tenants.

In this case, the agreement had to include terms for the city selling the property to the development team. If necessary, an exclusive negotiating agreement can be extended, usually by three months in one-month intervals.

By now, San Bernardino officials expected to have demolition of the property completed, or at least underway, and a redevelopment plan in place. But the city has yet to receive a detailed proposal from the development team, according to several council members.

The first issue that needs to be resolved is whether the city or the development team should pay for demolishing the mall, said Councilman Theodore Sanchez, who represents the First Ward, where Carousel Mall is located.

“If the city does it would get started faster and the project would have some momentum,” Sanchez said. “But we haven’t been able to work that out. It’s not clear which side should have to pay for the demolition.”

In March 2021, Sanchez was one of six council members who voted to hire Renaissance Downtowns USA/ICO Real Estate Group.

Shortly thereafter, city staff presented all documents, staff reports and any other information regarding the Carousel Mall property to the development team so it could assemble a presentation for the council.

While it did not present anything like a final plan, the development team did make it clear what it has in mind for for the mall property next to Interstate 215, property that has been shuttered and surrounded by a wire fence for about five years.

First, there was no thought given to saving any part of the existing structure.

“It’s pretty clear that demolition is the only approach to fixing the property,” said Donald Monti, president and chief executive officer of Renaissance Downtowns USA, during the virtual council meeting 11 months ago. “The building does have some interesting elements, but the best approach is to level it as quickly as possible.”

Monti then presented a rough outline of how they want to change the property, starting by reestablishing that part of San Bernardino’s original street grid to create better traffic access.

Ultimately, as many as 3,500 residential units could be developed on the property, something it never had dating back to 1972, when it opened as Central City Mall. Besides residential units – most likely apartments or townhouses – the property will have retail, entertainment, commercial and office development.

Renaissance/ICO also proposed creating an “urban canopy” with trees that would be planted on the site, while installing trolley cars and a Riverwalk with gondolas modeled after popular Riverwalk in San Antonio, Texas.

Besides giving San Bernardino’s downtown a much-needed lift, the Carousel Mall property could end up being a model for future downtown development in Calfornia, if not nationwide.

“This is potentially a transformative project,” Monti said last year after taking a walking tour of the property.  “It has tradition, it’s in a great location, and it has the city strongly supporting its revival.”

Bringing the Carousel Mall property back to life with mixed-use development is one of the most important issues – if not the most important issue – facing San Bernardino today, Mayor John Valdivia has said.

But making any improvements to the property has turned out to be difficult.

Carousel Mall – which changed its name in 1991 after a children’s carousel was installed on the property’s lower level – spent years losing ground to Inland Center Mall, the city’s other downtown retail destination.

By the mid-2000’s its three anchor tenants – Harris-Gottschalks, Montgomery Ward and JCPenney – had all shut down. That’s fatal for a regional shopping mall, which needs strong anchor tenants to survive.

Carousel Mall was shut down with little fanfare in July 2017, after years of sluggish attendance, multiple ownership and failed attempts at a revival, one of which included leasing some of the largely-vacant mall to office tenants.

Another proposal called for removing the roof and transforming the property into an outdoor facility similar to Riverside Plaza, which underwent a similar refurbishment.

But that was never tried, nor was filling the mall with international tenants, an idea mall management briefly considered, but never implemented, in the early 2000’s. When it closed, Carousel Mall had 14 specialty tenants, none of them anchors.

Restoring the Carousel Mall property has become difficult for several reasons, one of which is seldom mentioned, Sanchez said.

“People don’t like to talk about it, but developers don’t want to build anything downtown,” Sanchez said. “They see the price of the land and they back away. The lease rates aren’t going to be as high as they are in some other places, so they know they aren’t going to make as much money as they would somewhere else. They’d rather go to Hospitality Lane.”

Ultimately, the city will have to subsidize much of its downtown redevelopment, and not just the Carousel Mall property, Sanchez said.

In the meantime, the city will keep working with Renaissance/ICO to get an agreement, said Fourth Ward Councilman Fred Shorett, one of three council members working regularly, and directly, with the developer.

“We’ve had lot of meetings where a lot of good information has been exchanged,” Shorett said. “But I don’t have a crystal ball. I don’t know when we will have a final plan. But I’ve been here 13 years, and I can tell you we’ve never been as close to an agreement as we are now.”