(January 26) The city of San Bernardino has apparently given up on attempting to interest the county of San Bernardino in becoming a major tenant at the 43-acre Carousel Mall.
Construction on the downtown landmark began in 1971. at a location that had been the site of the old Harris Store since 1927. In 1972, it opened as the Central City Mall, anchored by Harris, J.C. Penney, and Montgomery Wards, and including 49 other stores. Today it is located within walking distance of both San Bernardino City Hall and the San Bernardino County Administration Building.
It was for a time a grand shopping location, temporarily besting its major rival in town, the Inland Center, which opened in 1966.  At its peak in the mid 1980s it boasted more than 100 tenants. In the late 1980s it was renovated, and a carousel was installed in the bottom floor, at which point it was rechristened the Carousel Mall. But its fortunes waned with those of the rest of San Bernardino over the years, and by the late 1990s, it began to decline. The first major blow came when Gottschalks, which had bought out Harris, elected to close at that location in 1998 and relocated in the Inland Center. Three years later, in 2001, Montgomery Ward went out of business. At that point, J.C. Penney was the sole anchor. In 2003, J.C. Penney closed. The mall was sold in 2006. Two years later, in 2008, Lynwood-based developer Placo San Bernardino LLC, purchased  a major portion of the mall in 2008 for $23.5 million, with serious designs on reinvigorating it and obtaining short term financing to undertake improvements, signaling it was on a crash schedule to do just that.  But that same year, CinemaStar shuttered its theater on the mall’s grounds.
Placo remained committed, however, refinancing its early short-term financing, with a $16.5 million loan from Center Bank.
In May 2010,  with its plan stalled, Placo was failing to make its payments to Center Bank. The  city of San Bernardino’s economic development agency swooped in and bought the property’s note and deed trust from Center Bank for slightly over $13.1 million.  At that point, the city, based on backroom discussions with county officials, had visions of filling large portions of the mall with county offices.
Relations between Placo and the city had entirely broken down by that point. Placo, which claimed it was still intent on making a go of revitalizing the mall, said it was being undercut by the city which was militating to tenantize it with county government offices. The city pressed Placo to pay it the $5 million difference between the amount it had paid for the mall and the amount of money loaned it by Center Bank with interest.
In 2011, there were 33 shops in the mall. At present, there are only 17 businesses there, including four restaurants. Whatever prospect the city once felt it had of luring the county into locating its offices there have long since faded. In fact, last April, the only county office there, county of San Bernardino’s Children and Family Services Division, which had entered into a ten year lease for 28,892 square feet of office space at 128 Carousel Mall, Building G, pulled up its stakes and departed.
Bowing to the obvious, San Bernardino has given up on the prospect of becoming the county’s landlord at the mall. San Bernardino  Mayor Mayor Carey Davis and San Bernardino City Manager Allen Parker in November sent a letter to what has been described as “numerous development concerns” soliciting return letters of interest to the city relating to the mall. Davis and Parker, perhaps somewhat unrealistically, imposed a deadline of December 19 for replies. More recently the city has had communication with some of those development concerns which indicated they would like more time to put together responses and proposals.
According to the city, the city is only seeking “informal” letters of response, and more detailed proposals can be provided further down the line.
Clearly, the city’s intent is to stir up interest and create the perception that there is a depth of competition for locating in the mall.
The city is seeking qualified entities with the means and expertise to transform the mall, which is among the largest and most involved of the nearly 300 properties owned by the city/now defunct economic development agency. Davis and Parker said they want a profile of each company, its financing capability and experience, together with an explanation of the potential the company sees in the mall site.
The city is prepared to provide the company that offers the most alluring proposal an inducement in the form of a developer dispensation agreement, conditional upon a demonstration that the company in fact has the financial horsepower to achieve its stated goals.
The letter touts the advantages the mall property possesses, including its placement in the downtown area and proximity to San Bernardino International Airport, the availability of water and other infrastructure, the presence of nearby national companies such as Amazon, Hewlett-Packard, Michelin, Kohl’s, Pep Boys, Mattel and Stater Bros. Markets, and its easy accessibility from the 10 Freeway and the recently improved 215 Freeway.
The letter hinted that the city could facilitate the sale of that portion of the mall not owned by its economic development agency’s successor, those being the Harris/Gottschalks building, owned by El Corte Inges, a Spanish department store broker, and the J.C. Penney’s store, now owned by the San Manuel Band of Mission Indians. The letter said the solicitation of interest was “coordinated” with those two parties.