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San Bernardino has enlisted two retail developers and a homebuilder to fix the property, which is at least 20 years past its prime. This time, the mall will probably be destroyed.
After years of ownership changes, false starts and renovation plans that never panned out, the Carousel Mall’s days may finally be numbered.
The San Bernardino City Council voted Nov. 2 to renovate the dilapidated downtown mall and enhance the adjacent Theater Square property, entering into an exclusive negotiating agreement with The Fransen Company in Newport Beach and AECOM in Los Angeles, said Mark Persico, the city’s community development director.
That agreement is for six months and can be extended for another six months.
During that period, both developers will pay the city $10,000 a month, or up to $80,000, for any consulting work that might be needed, Persico said.
The developers, both which have extensive experience rehabilitating underperforming retail properties, now must come up with a plan to convert the 43-acre property into a retail, office and residential project.
Los Angeles-based KB Home has signed on to manage the residential component, which San Bernardino officials believe is crucial to the project’s success because it will be needed to support whatever retail ends up there.
Retail mixed with residential is popular all over the country, and it’s helped revitalize the downtowns in Riverside, Santa Ana and Pasadena, among other places in California, according to Persico.
While nothing is official, everyone involved seems to agree that the era of the enclosed shopping mall has passed, and that Carousel Mall – which opened in 1973 as Central City Mall – will be torn down and replaced with an outdoor facility, not unlike what was done to Riverside Plaza 11 years ago.
“I think every expectation is that Carousel Mall will be torn down,” Persico said of the property, most of which is owned by the city. “There was a time when people went to the indoor mall to shop and the kids went there to hang out, but not anymore. Those days are gone. Now, people are looking for something else.”
AECOM will be the project’s master developer. One year ago, San Bernardino asked nearly 100 developers for suggestions as to how best to restore the Carousel Mall property, which when it opened was supposed to revitalize the city’s downtown.
Almost all of those who responded recommended a mixed-use project.
This is not the first time San Bernardino has tried to come up with a way to restore Carousel Mall, which began to decline about a decade after it opened. By then, local shoppers had shown their preference for Inland Center Mall next to Interstate 215, the city’s other enclosed shopping mall, which opened seven years before Carousel Mall.
Carousel Mall no longer has any anchor tenants: its last two, JCPenney and Montgomery Ward, both shut down in the mid-2000s. In 1999, Harris’ Department store next door to Carousel Mall at 300 N. E St. closed after more than 90 years in business, taking away another reason for residents to shop downtown.
Since then, a number of renovation proposals have been proposed, including tearing the roof off the building and converting the property into a pedestrian mall, to no avail. The mall began signing office tenants, hoping that the people who worked there would support what retail remained, but that didn’t work either.
Today, Carousel Mall is a virtual ghost town, with some office tenants, a few specialty stores and only a handful of shoppers on a typical day. Reviving the property, which would be difficult under the best of circumstances, is made even more difficult by the city’s 2012 bankruptcy filing and the absence of redevelopment, which California eliminated in 2012.
“It’s really not accurate to call it a mall,” said Judi Penman president and chief executive officer of the San Bernardino Area Chamber of Commerce. “The media still calls it a mall, but it really isn’t. It’s an office building that isn’t performing very well.”
Restoring the Carousel Mall property is essential to making downtown San Bernardino a place people want to visit, Penman said.
“The city needs to do something besides hire a lot of consultants,” said Penman, who said the chamber has not been consulted regarding the future of the Carousel Mall property. “They did that about five years ago and nothing happened. They need to come up with a plan and then do something with it.
“Make the city a clean, safe place where people want to do business.”
Restoring any retail parcel is difficult, let alone a 43-acre parcel in a city’s downtown, said Brady Umansky, president of Progressive Real Estate Partners, a brokerage in Rancho Cucamonga.
“It’s hard to say what might work there,” said Umansky, who specializes in retail transactions. “A lot of cities are making residential and retail work in their downtowns, and I think that would be well-received in San Bernardino.
“But I think the real challenge is to make that area more of a destination.”
San Bernardino officials have recently touted the property’s attributes to potential owners, including its location next to the recently expanded 215 Freeway and its proximity to the San Bernardino Transit Center, which opened in September.
Putting residential development on the Carousel Mall site could succeed because more and more people, especially young people, want to live in a downtown environment, said Rick Lazar, senior vice president with Coldwell Banker Commercial Redlands.
“Everywhere else that has residential in their downtown, it’s priced through the roof, but if San Bernardino were to do that it would be a lot more affordable,” said Lazar, who said he has brokered multiple retail transactions in San Bernardino. “To me, it makes a lot of sense for them to bring in KB Home.”
Because so many other renovation plans have fallen short, Lazar admitted he’s a little skeptical about the latest proposal.
“I need to see something built,” he said. “But they have to do something, because the property is horrible. It can’t go down much lower.”
