San Bernardino gets historic downtown building for free

San Bernardino’s effort to restore its downtown has taken an interesting turn, one that could have long-term ramifications for the city.

El Corte Inglés S.A., the largest department store chain in Europe, has agreed to donate the downtown building that was home to Harris Department Store for more than 70 years to the city, free of charge with no conditions.

Madrid-based El Corte Ingles has owned the building since May 1988. The 97-year-old structure is worth $4 million, according to the city.

The structure at 300 N. E St. has been vacant since January, 1999, when Harris-Gottschalks – the two retailers merged in 1998 – closed its doors. For the last 25 years the four-story building has sat vacant while El Corte Ingles tried to find a buyer or tenants, with no success.

The 270,000-square-foot building has fallen into major disrepair while it’s been empty, according to a city report.

“The property has endured many acts of vandalism and trespassing,” the report states. “El Corte Ingles has determined it is no longer economically viable to continue to maintain the property to mitigate future acts of vandalism and trespassing.”

Getting a major downtown property for free will help San Bernardino’s downtown revitalization effort, Councilman Fred Shorett said.

“It’s very good that the city is getting this building,” Shorett said shortly before the city council voted unanimously, at its March 20 meeting, to accept the donation. “Everyone should be happy about it. With all of the building’s problems, this is [still] a positive thing, thank you El Corte Inglés.”

By giving up the building, El Corte Ingles avoids escrow, potentially a lengthy process with a large commercial building. All that remains is transfer of title, and for the planning commission to make sure the property conforms with the city’s general plan.

San Bernardino has spent the past 20 years trying to figure out what to do with the Harris Building, and it was caught off guard by the donation offer, according to Councilman Theodore Sanchez.

“It was a big surprise, but it make sense if you think about it,” said Sanchez, who represents the first district, in which the Harris Building, and the former Carousel Mall site, is located. “Commercial space is in a slump all over the country. I think it’s become a liability for them and they just wanted to get rid of it.”

Harris Department Store began in 1905, when the Harris family opened a store on the bottom floor of the Armory Building at 462 Third St., according to a history of the business on San Bernardino’s website.

In 1915, the store moved into a dry goods facility next door. Four years later, the company started buying land at the corner of Third and E Streets, where it built a store that opened in November 1927.

Over time, Harris Department store became a local institution and one of the most popular shopping destinations in the Inland Empire.

“I remember going there as a child,” Sanchez said. “It was really beautiful, especially at Christmas. Now it’s in pretty bad shape.”

One local businessman who tried to buy the Harris Building from El Corte Inglés could not agree more.

“The inside is apocalyptic,” said Alan Stanly, who has been buying and selling properties in downtown San Bernardino for the past seven years. “It is in the worst possible condition.”

Among the structure’s major drawbacks: fire and sprinkler damage, loose ceiling tiles, stolen copper wire and a heating/air conditioning system that will have to be replaced.

“To clean it out and get it back to zero would cost about $10 million,” said Stanly, who owns the Enterprise Building, a seven-story edifice at 320 N., E St. “If the city did it it would probably cost about $20 million because of prevailing wage.”

But from a potential buyer’s perspective, none of those are the building’s biggest drawback.

“The biggest problem is there is no parking,” Stanly said. “If the city figured out the parking problem I would own building. I had a deal to pay El Corte Inglés $3.5 million, but I backed out of it because there’s no parking.

“Who wants to own a 270,000 square-foot building with no parking?”

For Stanly, the news that El Corte Inglés had decided to donate the Harris Building to the city was disappointing.

“The city just got the building for free, so it’s up to them to decide what to do with it,” Stanly said. “It’s a very important, historic building, and I feel it should be preserved. I wanted to buy it to preserve it. I would still like to own it.”

Restoring the 43-acre Carousel Mall property remains San Bernardino’s top priority. Nothing less than the city’s economic future depends on making that property next to Interstate 215 economically viable, according to city officials.

Nearly one year ago, the city cuts ties with its development team Renaissance Downtowns USA and ICO Real Estate Groups. It’s now looking to hire another developer, or it might take on the project itself, but its overall goal for the property hasn’t changed: a mixed-use office, residential and commercial project that will bring jobs and shoppers downtown.

Ultimately, the Carousel Mall property and the Harris Building will have to conform with each other, Sanchez said.

“They’re separate projects, but they’re also next door to each other, so they will both be considered part of the same development,” Sanchez said. “Whatever is done with the Harris Building has to compliment what’s done with the mall property.”

Having to restore the Harris Building adds urgency to restoring the former Carousel Mall site, Sanchez said.

“There are some people who are saying that we’ve given ourselves another difficult downtown project, but I don’t think that’s the right way to look at it,” Sanchez said, “This is a very good thing for the city in the long run.”