Carousel Mall renovation plans might run afoul of state law

The state of California has thrown a wrench into San Bernardino’s plans to level the Carousel Mall and replace it with commercial and residential development.

The Department of Housing and Community Development informed San Bernardino officials last month that the city violated four state laws in its most recent effort to revive the beleaguered downtown property.

In a letter dated March 16, department officials charged that San Bernardino failed to allow for a 90-day period in which to conduct “good faith negotiations” with all developers that expressed interest in redeveloping the site.

San Bernardino also negotiated with two prospective developers, BLVD Communities in Los Angeles, and Alliant Strategic Development in Malibu, both affordable housing developers. Ultimately it selected a third developer, Renaissance Downtown USA/ICO Real Estate Group, as the lead agency in its efforts to renovate the property.

However, San Bernardino officials took those actions without making it known the mall property was available as surplus land, a violation of the state’s Surplus Land Act, according to the letter.

Third, San Bernardino officials did not sufficiently account for affordable housing when putting together its plans for the mall property, which covers 43 acres on the east side of Interstate 215 at 295 Carousel Mall.

“A local agency must prioritize proposals to make at least 25 percent of the housing units affordable to lower-income households,” the letter states. “And, if the local agency receives more than one such proposal, the local agency must give priority to the proposal with the greatest number of affordable units.”

Finally, the city failed to provide the state agency with full and accurate descriptions of its negotiations with developers. Specifically, the documents provided by the city to the Housing and Community Development Department regarding its plans for the mall property were ‘incomplete and, in places, inaccurate,’ ” the letter states.

As a result, the department rescinded its approval of the city’s proposed sale of the Carousel Mall property to Renaissance Downtown, a decision it handed down in late 2021. All possible violations of state law described in the letter have been referred to the state attorney general’s office.

San Bernardino officials have until May 15 to correct the violations or risk losing up to half of the property’s sale prices, according to the six-page document addressed to Nathan Freeman, San Bernardino’s director of community, housing, and economic development.

City officials must now determine whether San Bernardino has violated state law and, if it has, what to do about it, said Jeff Kraus, the city’s public information officer.

“We understand that we have to comply with the housing and community development regulations, and the letter suggests remedies to help us do that,” Kraus said. “Now we have to look at those remedies and see what can be done.

“It’s a huge property, but whatever needs to be done to bring us into compliance we will do.”

The next step in determining whether San Bernardino’s Carousel Mall plans run afoul of state law will involve a  three-member committee put together to deal specifically with the myriad of issues related to that property: Councilman Theodore Sanchez, Councilman Fred Shorett, and Councilwoman Kimberly Calvin.

Sanchez represents the First Ward, in which the Carousel Mall is located,

All three are scheduled to meet in closed session to discuss the latest Carousel Mall developments before the April 5 council meeting, then report to the council during its regularly-scheduled meeting that evening.

“It will be a discussion about whether we’re in compliance with the housing and community development regulations,” Kraus said. “It’s the ad-hoc committee’s responsibility to sort this out and make sure that everyone is on the same page.”

But San Bernardino wouldn’t be in this situation with the state if that committee had done its job the first place, according to former Mayor John Valdivia.

“The committee was tasked with providing regular information and updates along with recommendations, to the mayor and city council of these and any issues facing the mall,” said Valdivia, who left office in December, in an email. “They clearly failed at doing both.

“San Bernardino has faced multiple and significant setbacks on the redevelopment of carousel mall, due to ineptitude and political gamesmanship.”

Members of the ad-hoc committee did not return calls seeking comment.

If San Bernardino officials agree on one thing, it’s that the future of downtown San Bernardino depends almost entirely on leveling the Carousel Mall and replacing it with commercial-residential development.

Opened as Central City Mall in 1972, the facility changed its name in the early 1990s after a carousel was added to its lower level.

The mall performed well during its first 20 years or so, but by the 1990s it was fast losing ground to Inland Center Mall, San Bernardino’s other downtown shopping center.

By the mid-200s, when Harris-Gottschalks, Montgomery Ward, and JCPenney had all shut down. Without its three anchor tenants, the property’s fate was sealed.

That began a slow but steady decline during which Carouse Mall remained open, but with only a handful of tenants.

Several attempts to revive the mall, including converting some of it to office space, were tried but failed. Mall management would never release an exact figure, but the vacancy rate had to be more than 50 percent.

Carousel Mall shut down in the summer of 2017 and remains vacant today. In December, after agreeing that the mall was a fire hazard and a public health menace, the council voted to demolish the mall.

Despite the possible state violations, San Bernardino officials hope to start that process “soon,” Kraus said,