San Bernardino might pursue development team for Carousel Mall site

San Bernardino might change its approach to redeveloping the 43-acre site where the Carousel Mall once stood.

Rather than hire one developer – the traditional approach to such a large and costly enterprise – City Manager Charles Montoya will propose that the city become the project’s master developer, and bring in firms to handle the project’s individual components.

Montoya, who took over as city manager in October, will present that idea to the city council during a study session Jan. 31 at Norman F. Feldheym Library, said Jeff Kraus, San Bernardino’s public information officer.

A study session is a chance for the seven council members to discuss an issue without having to cast a vote, or make any decisions. The informal atmosphere will allow for more flexibility and a deeper discussion of both issues, according to Kraus.

Regarding the former Carousel Mall site, which takes up a huge piece of downtown just east of Interstate 215, the city still wants a mixed-use project there: retail, multifamily and office, with the office likely to be built at Second and D streets.

The question is how to make that happen.

“The idea has always been to hire one developer to do the entire project, but it might be better to bring in multiple developers to handle each phase,” said Kraus, who was authorized to speak on Montoya’s behalf. “It could be quicker, and it could end up producing a better product.
“But what’s going to be proposed is a lot different approach to fixing the Carousel Mall property than what we’ve done up until now.”

Developers might be more attracted to the project if they know they’ll be responsible only for their speciality: an office specialist in charge of developing office space or an commercial specialist in charge of that component.

“There aren’t many developers who can take on a project as big as this one,” Kraus said. “It’s very rare that a city can develop a piece of property this large in the middle of its downtown.  If we divide it into categories we think the developers might be more interested.”

San Bernardino’s effort to restore its city hall at 300 N. D St., a building that has been closed since 2017 because of concerns about earthquake safety, will also be discussed, Kraus said.

In the six years since the building was shut down because of seismic concerns, city departments have worked in office space leased by the city in downtown office buildings. One of those structures is the Vanir Tower at 290 N. D. St., next door to the shuttered 10-story city hall building.

San Bernardino officials hope to have the city hall building, which is expected to cost about $80 million to repair, operating in 18 months.

Montoya discussed the redevelopment of the Carousel Mall site and the refurbishment of city hall during during a meeting Jan. 4 with about 50 local business leaders.

San Bernardino should issue bonds to pay for both projects, Montoya told the gathering.

“What I have in mind has worked elsewhere,” Montoya said in a statement released shortly after the meeting. “When we invest in our city, it sends a message to the development community that we mean business. People will take notice and new development will follow.”

Ultimately, the Carouse Mall property must be transformed into something that the mall did during the 1970s and into the mid-1980s: attract people to downtown San Bernardino.

“The Carousel Mall was a destination,” Montoya said in the statement. “We need to remember that as we move forward. San Bernardino needs places that bring people to the city – restaurants, entertainment, and development – that moves us forward. That brings visitors, new residents, and momentum to the city.”

The council member who represents the first ward, where the Carousel Mall property is located, said he’s anxious to hear the details of Montoya’s proposal for the site.

“It sounds like it could be a good idea, but it depends on the quality of the developers,” Councilman Theodore Sanchez said. “If they brought in the right developers, then it could work. I just want to see something happen there soon.”

The city-owned Carousel Mall, which opened as Central City Mall in 1972, was demolished last year.

San Bernardino did have a developer in place – Renaissance Downtowns USA/ ICO Real Estate Group – but the city council called off that agreement in May after learning it had violated surplus land regulations established by the California Department of Housing and Community Development.

Specifically, it ran afoul of the state’s surplus land act, which required San Bernardino to set aside 15 percent of the Carousel Mall site for affordable housing.

The department, which enforces building and housing codes, said San Bernardino did not negotiate with two affordable housing developers who indicated an interest in building on the property.

As a result, the state agency rescinded its approval of the development agreement between San Bernardino and Renaissance Downtowns USA/ICO, but it has since reversed that decision and declared the mall property suitable for development.

Despite that, San Bernardino ended its exclusive negotiating agreement with Renaissance Downtowns USA/ICO and decided to start anew, maybe with a team of developers.

In the meantime, restoring the Carousel Mall site remains the cornerstone of the city’s downtown development effort and its top priority.

“Ultimately, the council will have final say in what goes there,” Kraus said. “And I can tell you the council is very anxious to get started on developing the site.”