City Terminates Agreement with Mall Developer

City Terminates Agreement with Carousel Mall Developer
Posted on May 05, 2023

City of San Bernardino Terminates Agreement
with Developer for Carousel Mall

The action by the City Council aims to resolve a dispute with a State Agency
and not add additional delays to the downtown project.

The San Bernardino City Council on Wednesday, May 3, voted to terminate the City’s exclusive negotiating agreement with the San Bernardino Development Company (SBDC) to redevelop the 43-acre Carousel Mall site. This action is anticipated to clear the way for the City to resume the development process in the near future.

In March, San Bernardino received a notice from the California Housing and Community Development Division (HCD), which alleged several violations of the Surplus Land Act, a California law that outlines the steps a public agency must take to sell property.

Based on City staff’s recent conversations with HCD, by terminating the agreement with SBDC, the outstanding issues associated with the March letter from the agency will have been resolved.

According to the 2019 version of the Surplus Land Act, a public agency must first make property it intends to sell available for developers of affordable housing. HCD claims the City of San Bernardino did not follow the proper steps, a claim the City disputes.

Rather than risk extensive delays and possible litigation with HCD, the San Bernardino’s intention is to work closely with HCD on the Surplus Land Act process when the City proceeds with the disposition of the Mall property. The termination of the agreement with SBDC eliminates any possible conflict of interest when evaluating new proposals, a concern raised by HCD. As such, the March Notice of Violation will not apply to a future disposition.

It is not known at this time how quickly San Bernardino will once again seek development proposals that include affordable housing at the Carousel Mall site.

In the meantime, demolition of the Mall, which began last month, will continue, and the City will evaluate additional nearby infrastructure improvements that may expedite the future development of the Mall site.

SBDC was formerly known as RD-ICO, a joint venture between Renaissance Downtowns USA (“RD”) and ICO Real Estate Group (“ICO”).