Carson’s six-decade dream of redeveloping a 157-acre former landfill into a bustling hub of commerce and housing has hit another significant snag, with a yearslong and frequently tumultuous partnership between the city and a developer collapsing this week – putting plans for a luxury outlet mall in doubt.
In its wake, a once-settled feud between the developer and Carson has resurfaced, with both sides exchanging new and old accusations, and threats of legal action.
Developer Cam-Carson, a joint venture between Macerich and Simon Property Group – the latter of which operates dozens of malls in California, including Torrance’s Del Amo Fashion Center – informed Carson that it was pulling out of the project in a Monday, June 3, letter, which the Southern California News Group obtained.
This latest dispute, according to both Cam-Carson and city officials, centers around whether the developer should start paying certain operational and management costs for the 9 acres that would become the luxury outlet mall.
The result, it seems, is that the project is once again in question, though city officials said they remain committed to the project.
“We remain dedicated to the revitalization of our city,” Mayor Lulu Davis-Holmes said in an interview this week, “and will continue to work towards solutions that benefit our residents and the community at large.”
Development deferred
Ever since the CalCompact dump site closed in 1965, Carson officials have dreamed of redeveloping the land.
It is, after all, prime real estate – and massive. The 157 acres sit squarely between the interchange of the 405 and 110 freeways. It even has its own 405 exit off Avalon Boulevard.
But because it’s a former landfill, the ground is toxic and needs to be cleaned up, a costly effort known as remediation.
Over the years, that has been a considerable burden, causing a hope-and-then-despair cycle in Carson as the community was teased with one sparkling project after another only to see those proposals whither.
Within the last two decades alone, for example, the cost and complexity of environmental remediation has nixed multiple proposals, including an NFLstadium and giant shopping centers. In 2015, city officials were so hopeful they could lure an NFL team to Carson that they erected a Stadium Way street sign near the dump site at the southbound 405 exit ramp.
But that effort went nowhere. Instead, SoFi Stadium went up in Inglewood. But the Stadium Way sign in Carson remains.
And so does the former landfill’s status as one of the largest undeveloped parcels in Los Angeles County.
But in recent years, the cycle returned once more to hope, with the prospects becoming brighter that the land could finally transform from vacant to vibrant.
That’s because Carson struck deals with two developers to tackle separate portions of the 157 acres.
Developer Faring took 96 acres. It is in the process of creating a dining-and-green space area called formerly dubbed Country Mart – now Carson Place – on about 12 acres of that and erecting six industrial buildings on the rest. That project is going well, city officials said.
Faring is also working on a 1,200-unit apartment and condo complex across the street from the landfill, despite controversy over that project closing a mobile home park that mostly housed seniors.
And then there’s Cam-Carson.
That developer struck a deal with Carson in 2018 to build a 400,000 square-foot luxury outlet mall on a 40-acre section of the former landfill.
While 400,000 square feet is a sliver of the overall size of the former landfill, the outlet mall seemed poised to become the crown jewel not only of the entire 157 acres – but also of the whole city.
It would be the South Bay’s first outlet mall and attract tourists to the city, bring in an estimated $5 million in sales tax revenue, and create around 1,200 and 1,600 construction and permanent jobs, respectively, according to Carson officials.
But in 2020, the developer filed a lawsuit against the city and the Carson Reclamation Authority, accusing them of negligence and financial mismanagement in their remediation efforts. Carson filed a countersuit.
The project, though, received new life in October 2022, when Cam-Carson and the city agreed to pause their lawsuits. As part of that deal, Cam-Carson agreed to take on the remaining remediation work.
Then, six months ago, the Carson City Council approved an economic development benefit agreement with Cam-Carson. That deal provided $26 million in city money to help redevelop the land, which officials said at the time was intended to both continue efforts to settle the paused litigation and incentivize the work to continue.
All seemed well.
Compact crumbling
But Cam-Carson is still performing its due diligence to see if the outlet mall project is feasible, company officials said. The city, meanwhile, has been paying what’s known as carry costs, which are operational and management expenses related to holding on to the land, according to John Raymond, executive director for the Carson Reclamation Authority.
Those twin facts essentially sowed the latest dispute.
The impetus for pulling out of the project, according to Cam-Carson’s letter to the city, was the latter requiring the former to pay certain operational and management costs beginning in mid-March, even though the developer was still doing its due diligence. Cam-Carson, the letter said, would resume its litigation.
But the official due diligence period, Carson officials said, ended on May 15 after multiple extensions.
Mark Silvestri, Simon Property Company’s president of development, accused Carson and its CRA of “continually failing to meet their obligations.”
“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,” he wrote, “and wasted well over $100 million of its taxpayers’ money.”
Cam-Carson has also invested more than $80 million into the outlet mall project, said Rob Ellison, an attorney representing the developer.
Carson and the CRA have indeed spent nearly $100 million, Raymond said in a Thursday, June 6, interview. But none of that money was wasted, he added, and city officials are hopeful the environmental remediation and the lessons they’ve learned will pay off for the mall and for other developers.
Davis-Holmes, meanwhile, described Simon’s move as “negotiation tactics.” Carson and the CRA, the mayor said, have negotiated in good faith over the past 20 months and there has been no default or broken promises.
“We’re sincere in our efforts on this project,” Davis-Holmes said on Thursday. “Our city and community has been waiting patiently and despite that, Simon’s recent actions have undermined the project.”
Despite being in the works for years, the project is still in its infancy. Not a single wall has gone up.
But that’s because of the complexity of preparing the landfill site for construction – though that work is nearly complete.
Groundwater and gas extraction systems, which carry potential toxins away from the site, need to be installed. All but one of the 25 needed for the Cam-Carson site are in place, Raymond said.
Load-bearing, 95-foot piles need to be driven into the ground past any contaminated soil. Figuring out how to do that took 51 days, Raymond said. At last, all 2,238 are in place.
And even the bulk of the remediation is done.
Despite that progress, Cam-Carson does not yet seem assured that the project will succeed, according to its letter.
“We have been consistent in our position that is is completely inappropriate for (Cam-Carson) to resume payment of the CRA’s carry costs during the pendency of the litigation unless and until we have reached a mutually satisfactory path forward and (Cam-Carson’s) conclusion of its due diligence.”
The CRA, for its part, has been paying the carry costs – about $110,000 per month – since 2019, Raymond said, indicating the agency is more than willing to shore up a fair share of the financial burden.
But on March 15, when the due diligence period expired, CRA told the developer it would have to pay the carry costs moving forward, Raymond said.
“They failed to pay $12.5 million of (carry costs),” said Carson city attorney Sunny Soltani, “and breached the agreement.”
Of that, $2.9 million were from 2019, a year in which the city also had an outstanding invoice of $8 million for piles and concrete slabs, which was the crux of the city’s countersuit a year later.
“In the spirit of cooperation,” Raymond said, “we weren’t going to ask them to pay for that.”
Cam-Carson representatives, though, denied the company owes carry costs, calling it “a false narrative.”
“(The City and CRA) concocted this narrative to try to somehow shift blame for the project’s failure to Cam-Carson,” Ellison said in a statement. “Cam-Carson does not owe carry costs.”
There are other issues at play as well, such as a planned road, Leonardo Drive, that would travel through the project site.
Ellis, Cam-Carson’s attorney, accused the city of failing to enter into a construction agreement, finish the design or do what it needed to get Lenardo Drive built on the required schedule.
But CRA has spent $5 million of the $26 million subsidy on designing and engineering the road, Raymond said. And because of that project’s complexity, he added, CRA thought it best to send it out to bid.
Either way, the two sides appear at an impasse.
And now Cam-Carson and the city are poised to resume their legal battle.
A status conference about the dual lawsuits is scheduled for next week, Soltani said. The city, she said, will try to persuade Cam-Carson to resume negotiations. Whether they will agree is not yet clear; after all, Cam-Carson, in its Monday letter to the city, described the company’s officials as being “frustrated and disappointed.”
One thing, however, is clear: Carson’s dream of a luxury outlet mall is once again in doubt.