California Apparel News

Los Angeles shopping-center developer Rick Caruso pulled the plug on his long-stalled project to build the Shops at Santa Anita, a luxury mall in Arcadia, Calif., located 14 miles east of another one of his retail centers, the Americana at Brand in Glendale, Calif.

Caruso Affiliated had planned to start construction for the Shops at Santa Anita in 2009, but the project was held up by lawsuits from the Westfield Group, which runs the neighboring Westfield Shoppingtown Arcadia. In addition, Magna Entertainment Corp., a Caruso partner in the project, filed for bankruptcy in 2009.

Caruso announced he was cutting the Santa Anita project, which was to have been built on parking lots near the Santa Anita Park horse-racing track, during a May 12 luncheon speech at Town Hall Los Angeles at the Millennium Biltmore Hotel. The terse announcement was made during a question-and-answer period at the end of Caruso’s talk on Los Angeles politics. When asked about the retail center’s status, he told the crowd the project was not going to go forward, said Karen Diehl, a Caruso spokesperson. Caruso had no further comment on the mall during the luncheon.

The end of Caruso’s involvement in Santa Anita took some Arcadia residents by surprise, said Jeff Bowen, who has lived in Arcadia for more than 50 years. He appeared in front of the town’s city council to support the project. “I’m sure it will disappoint a lot of people,” Bowen said. “The majority of people I talked to were supportive of Caruso being here.”

Kruckeberg, Arcadia’s assistant city manager, said the project’s demise leaves the city in limbo “We are in a holding pattern until the racetrack owner decides on what it wants to do with the property,” Kruckeberg said. He hoped the abandoned Caruso project will still be developed into a commercial venture. Property owner MI Development Inc. now manages and owns the properties associated with the bankrupt Magna.

A struggling economy probably was a significant reason why Caruso cut the project, said Todd M. Russell, who served as Caruso Affiliated’s vice president of real estate from 2004 to 2009. He was involved in planning the Shops at Santa Anita and now runs the Russell Co., a retail real estate consultantcy that advises top malls such as South Coast Plaza in Costa Mesa, Calif.

“With the downturn, many companies have had to reconsider new developments, and that is across the board,” Russell said. “The focus is on redevelopment and repositioning existing assets. Banks are most comfortable with financing these projects.”

The Shops at Santa Anita was intended to be a combination of the Americana at Brand and Caruso’s popular Los Angeles retail center The Grove, Russell said. Plans called for the mall to feature contemporary retailers and up to two anchors. Mall entertainment was to have included horse-drawn-carriage rides. “Rick knows what is best for his company,” Russell said. “It is hard to question his motives. He is a very talented man.”

Caruso also is busy with other projects. He recently announced an expansion of the Americana at Brand mall, which includes moving a Nordstrom department store from the neighboring Glendale Galleria. The move will be completed in 2013. During the Town Hall luncheon, Caruso said he was considering a run for mayor of Los Angeles in 2013. —Andrew Asch