Legal Battle Over Carson Outlet Project Reignites As Simon Walks Away, Pledges To Resume Litigation
A yearslong saga involving the city of Carson, Simon Property Group, Macerich and a massive retail outlet project has shown a sign of life but perhaps not progress, with the would-be developers threatening to resume a pending legal case that had been paused.
Carson, through both the city and the Carson Reclamation Authority, has been working with Cam-Carson, the partnership between Simon and Macerich that was going to build the outlet mall on top of a 157-acre parcel over a former dump. They have also had long-running litigation relating to the project that was mutually paused two years ago.
Now, Simon says the project is dead in the water and the long-running litigation will resume.
“The City of Carson and Carson Reclamation Authority have continually failed to meet their obligations, which caused us to terminate our pursuit of the project which was otherwise fully funded and had tremendous retailer demand," Simon Property Group President of Development Mark Silvestri said in a statement to Bisnow. "We are deeply disappointed that the City and the CRA have squandered the opportunity to develop a world-class retail center on this long-underutilized property, and wasted well over $100 million of its taxpayers’ money."
Silvestri wrote in a letter sent to Carson's assistant city manager Monday that Cam-Carson has "been consistent in our position" that it shouldn't pay the carrying costs while their litigation is still pending and "until we had reached a mutually satisfactory path forward" for the project.
"Unfortunately, given the demand for CAM to pay the CRA's Carry Costs prior to conclusion of diligence we have no choice but to proceed with the litigation," Silvestri said.
The Cam-Carson partnership has been at work on this project since it was announced in 2018. Estimates show the completed project would generate more than $5M per year in sales tax revenue for Carson and create 1,500 permanent and 1,600 construction jobs, according to a city staff report.
But it is nowhere near complete. Construction stopped in 2020 as litigation around the amount of remediation and the ballooning cost of that cleanup needed to make the site feasible for the project stalled progress.
More recently, the project seemed to be progressing. Cam-Carson had reportedly resumed construction in mid-2022, The Real Deal reported. In late 2022, both parties had agreed to press pause on the case. The city approved a $26M agreement aimed at advancing the project.
Silvestri's letter indicates Simon will act to lift the stay on litigation.
Carson's mayor refuted Silvestri's framing of the situation in a statement to Bisnow.
"For the past 20 months, the Carson Reclamation Authority and the City have diligently negotiated in good faith, striving to finalize a deal that would bring the mall development back to our community," Lula Davis-Holmes, chairperson of the Carson Reclamation Authority and Carson mayor, said in an email to Bisnow. "Despite our sincere efforts and commitment to this project, CAM Carson's recent actions undermine the great progress we have made.
"It is disappointing that despite all this, CAM Carson is choosing litigation over paying approximately $350,000 on their carry cost obligation to finalize the deal."
UPDATE, JUNE 4, 12:50 P.M. PT: This story has been updated to include new comments from Simon Property Group and to clarify the status of the project.
