SAN BERNARDINO >> A plan to dramatically redevelop the 42.6 acres downtown where Carousel Mall has sat since 1973 took a big step forward on Monday when the City Council unanimously entered an exclusive negotiation agreement with two companies to develop the mall and adjacent Theater Square area.
The vote gives AECOM and The Fransen Company six months — and another six months if needed — to work with city staff to develop a plan for the two sites, including a mix of retail, market-rate housing and office space. During the exclusive negotiation phase, the developer will pay a non-refundable fee of $10,000 per month to the city, up to $80,000 total, to pay for any consulting work the city needs for planning the project.
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“The development is a much-needed shot in the arm for the city’s downtown area,” City Manager Allen Parker said in a statement. “It has been a top priority for staff to move this project forward as part of our bankruptcy recovery and economic development plans. It sets the stage for a new era for city residents and surrounding businesses.”
The agreement comes almost exactly a year after the city invited about 90 developers to give their plans for the property. Fourteen responded, with the vast majority calling for mixed use — office, retail and residential uses — according to Deputy City Manager Bill Manis.
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That reflects a national trend away from enclosed malls like San Bernardino’s, which opened with 52 tenants in addition to three anchor stores, Manis said.
“Over the recent years, as the council is aware, the mall has really struggled (with) attracting shoppers and thriving,” he said. “This has really led to us being in the current situation we are in with the mall, where we have approximately six or seven tenants in those 52 stores right now.”
The vacancy rate for Inland Empire malls improved to 6.3 percent earlier this year from 9.4 percent in the fourth quarter 2011, according to Brad Umansky, president of Progressive Real Estate Partners, a commercial broker in the region.
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San Bernardino has developed and backed away from several plans for downtown, but one success, officials say, has been Theater Square — site of Regal Cinema, which they say is among the top 100 Regal Cinemas worldwide.
The intention is to integrate the Carousel Mall plans with the California Theatre and Regal, which was developed by Fransen, a partner on this project.
“That theater draws — the Regal portion — draws over a half million customers a year,” said John Fransen, president of the Fransen Company. “I think we would all agree we’re a little bit shy when it comes to restaurants downtown, so we think Step 1 is to take the existing success and leverage off that.”
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City staff assured the public, which applauded when the agreement was approved, that the master plan will have ample community input and will define what will be built when and what the developer is responsible for.
The project is planned to go forward in stages, with the hope being that each development builds demand for others.
The mall will also re-introduce the street grid by extending F Street and 3rd Street, which were blocked when the mall was built, Community Developer Mark Persico said.