Carousel Mall finally shuts its doors

The long-struggling downtown shopping center officially shut down in July. Most likely it will be demolished and replaced with a mixed-use project. 

At long last, the Carousel Mall is no more.

The downtown San Bernardino shopping center that opened as Central City Mall in 1972  closed its doors July 25, and its ending could not have been more low-key: a sign taped to the mall’s main entrance informed patrons that the facility was “permanently closed to public access.”

Not that there were many patrons left.

Carousel Mall, which changed its name in the early 1990s when a carousel ride was added to the lower level, struggled to survive for the past 25 years or so. During its last 10 years, after undergoing multiple ownership changes, the facility was a virtual ghost town.

“I wish people would stop calling it a mall, because it hasn’t been a mall in years,” said Judi Penman, president and chief executive officer of the San Bernardino Area Chamber of Commerce. “The media calls it a mall, but it’s really an office facility that doesn’t work. Nothing that’s been tried there has worked.”

Penman, who has expressed that sentiment many times, was referring to one of many attempts to save the property. As it began to lose tenants in the early to mid-2000’s, the mall began signing office tenants, including several local government agencies.

The idea was that the people who worked there would shop there, and thus increase foot traffic, but that approach did not work. After years of not replacing stores when they closed, Carousel Mall was down to 14 tenants when it shut its doors.

By far, Carousel Mall’s biggest problem was its competition across town. Beginning in the early 1980s, more shoppers began taking their business to Inland Center Mall, San Bernardino’s other downtown shopping mall.

In 1998 the property suffered a major setback when Harris-Gottschalks closed. That store, originally called Harris’ Department store, was next door to Carousel Mall and had been a major downtown attraction for close to 100 years.

By 2003, city-owned Carousel Mall lost all four of its anchor tenants:  Gottschalks, Montgomery Ward and JCPenney.

But the downtown property was beset by problems besides local competition. It became a gang hangout in the late 1970s, there was a move away from regional shopping malls and people began shopping online.

Reviving the property became even more difficult in 2011, when San Bernardino declared bankruptcy and, one year later, when California officially did away with all municipal redevelopment agencies.

Even Theatre Square, which has performed solidly since it opened five years ago at E and Fourth streets – it’s anchored by the Regal San Bernardino Stadium 14 – wasn’t able to give the mall a significant boost.

Ontario Mills, which opened in 1996, and nearby Victoria Gardens in Rancho Cucamonga, which opened in 2004, shifted the center of Inland retail market away from San Bernardino, according to regional economist John Husing.

“The focus is more on the west end now, Interstate 15, and I think that has hurt Carousel Mall as much as anything,” Husing said. “I don’t know that you can repair it at this point.”

San Bernardino isn’t the only city wrestling with an outdated shopping mall. Regional shopping malls throughout the United States are losing major department store tenants – better known as anchor tenants – and they’re taking the malls down with them.

Overall, U.S. department stores’ sales per square foot — the standard measuring stick for retail productivity – dropped 24 percent to $165 per square foot between 2006 and 2016, according to a report by Green Street Advisors, a real estate research firm in Newport Beach.

Anchor tenants like Macy’s, Sears or JC Penney take up so much space they can be virtually impossible to replace.

San Bernardino officials still believe the mall’s location – immediately east of Interstate 215 – is a good place for a major mixed-use project.

Last November, the city council entered into an exclusive negotiation agreement with The Fransen Co. in Newport Beach, a retail-development consulting firm, and Los Angeles-based AECOM, an engineering company.

In broad terms, San Bernardino is looking for a two-phase development that will consist of a 5.5-acre theater district and a 43-acre residential-retail complex.

The longterm goal is to sell the Theater Square property and use the profits to pay for demolition of the mall and the grading of that site, said Steve Dukett, managing principal with Urban Futures Inc., a Tustin consulting firm.

In 2015, San Bernardino officials polled approximately 100 developers and asked them what they believed should replace Carousel Mall.

The overwhelming consensus was that regional shopping mall’s have had their day and that the mall should be replaced with a mixed-used project, which is what Frasen Co., and AECOM  is trying to put together. Both are working on approximately 12 potential plans to submit to San Bernardino.

Depending on how quickly the city acts, demolition of Carousel Mall could start as soon as one year from now, Dukett said.

“Whatever replaces it will be the center of the revival of downtown San Bernardino,” said Dukett, whose firm was hired to help oversee restoration of the mall property. “When that happens, everyone will forget about Carousel Mall.”