A Texas developer that struck a deal this summer to redevelop the long-shuttered Carousel Mall in San Bernardino has bagged out of the project for “economic” reasons.
Lincoln Property, based in Dallas, has withdrawn its bid to be the sole developer of the indoor mall at 295 Carousel Mall, the San Bernardino Sun reported.
Lincoln was added last August to the redevelopment team of Renaissance Downtowns USA and ICO Real Estate Group, both based in Los Angeles.
“Due to economic and other circumstances, it has become evident that Lincoln and the city will be unable to successfully negotiate a DDA (Development and Disposition Agreement),” Lincoln West Vice President Rob Kane wrote in a recent letter to the city.
As a result, the real estate and development firm will “withdraw and terminate any further participation under the (Exclusive Negotiation Agreement),” he said.
The 43-acre mall, which closed in August 2017, is owned by M&D Properties, based in Buena Park. The land is owned by the city.
With a track record of financing and redeveloping projects like Carousel Mall, Lincoln’s role as exclusive developer was considered a boon for the Inland Empire city. Renaissance Downtowns USA and ICO Real Estate Group were to become silent partners in the deal.
With Lincoln out of the picture, Renaissance and ICO can resume their role as principal developers. The city is reviewing proposals to demolish the 70-year-old mall.
“This is disappointing,” City Manager Rob Field said of the Lincoln exit, in a statement. “But it is just a setback. This project will keep moving forward.”
The two-story shopping center, which opened as the Central City Mall in 1972 with 53 stores, including three anchors, closed with more than 110 stores.
Last year, Renaissance and ICO were chosen from among a dozen finalists to revamp the former gem of the city’s central corridor. Plans call for a mixed-use residential, entertainment, commercial and office development.
Renaissance and ICO have proposed converting the Carousel Mall site into a downtown hub with up to 3,500 homes inside an urban-retail village of river paths and thousands of trees.
Beyond the mall, the firms aim to incorporate other downtown areas into an expanded redevelopment project.
Last May, a three-alarm fire broke out, damaging part of the vacant mall. Then city leaders blocked an attempt by San Bernardino Mayor John Valdivia to expedite the demolition of “a health and safety hazard for the community.”
A report issued last year by Coresight Research estimated that a quarter of the nation’s roughly 1,000 malls will close by 2025. Many are being converted into housing, retail and offices.
In May, nearby Redlands unanimously approved replacing its derelict mall with a 173,000-square-foot shopping, restaurant and housing village, while the owner of the Moreno Valley Mall has proposed a similar makeover.
— Dana Bartholomew
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