Simon and Macerich Poised to Pause on Outlet Mall in Carson

Simon Property Group and Macerich appear ready to pull the plug on a 400,000-square-foot premium outlet mall on a former landfill in Carson.

The nation’s largest shopping mall owner, based in Indianapolis, and the Santa Monica-based real estate investment trust are considering whether to pause the project beside the 405 Freeway and Del Amo Boulevard, the Long Beach Press-Telegram reported.

Carson officials said the developers are challenged by soaring construction costs and the price tag for cleaning up a 40-acre site inside a 157-acre dump.

“We potentially have to renegotiate our deal with them,” John Raymond, assistant city manager of economic development for Carson, told the Press-Telegram. “And in the next couple of months, we’ll know if we’re going forward with that.”

Although he declined to disclose any figures, Raymond said the cost of the project is now “way more than” what the developers and the city first expected.

In 2018, Cam-Carson, the joint venture of Simon and Macerich, inked a development agreement with the city to build the outlet mall, with an opening planned for fall of 2021.

According to the deal, the Carson Reclamation Authority was responsible for remediating the former hazardous waste pits to make sure the landfill was safe to build on.

Then construction stalled in early 2020, when Cam-Carson sued the city and its reclamation authority for $80 million, accusing the agencies of negligence and of mismanaging funds. A judge dismissed the lawsuit a year later.

Last summer, Carson and its authority struck a new deal with the developers. Simon and Macerich agreed to pay the cost of the landfill cleanup. Opening day was reset for next year.

The deal gave the developers 90 days to inspect previously completed remediation work, and the right to terminate both agreements if the cleanup costs were beyond their expectations.

The review period — extended twice — could wrap up by September, Raymond told the newspaper.

The proposed mall is part of a larger plan to redevelop the former 1960s-era garbage dump, purchased by a company controlled by the South Bay city for $1.

After a bid to build a $1.7 billion stadium to host the Rams and Chargers lost out to SoFi Stadium in Inglewood, Carson plans to develop five parcels within one of the largest undeveloped tracts in Los Angeles County.

Faring, based in West Hollywood, and Standard Communities of Century City have moved forward with plans to build an urban-retail village with 1,200 homes atop the former landfill. Pending approvals, the developers could break ground next year.

— Dana Bartholomew