$8.5-Million Loan to Mall Owners on Carson Agenda

In a meeting that holds profound revenue implications for cash-strapped Carson, the city’s Redevelopment Agency will convene Monday on a proposal to lend $8.5 million to the owners of Carson Mall for a sweeping renovation of the center.

Carson Mall Partners, owner of the 18-year-old center, says the loan is necessary to complete the $30-million project. The face lift also is a key issue in negotiations to lure home furnishings giant Ikea to Carson.

Meanwhile, Ikea, under a self-imposed deadline, says it will open its planned South Bay store elsewhere if the city does not act soon. Its agreement to open a store at the mall next year--contingent upon the renovation--expired Friday.

Ikea would replace the Broadway anchor store and pay for renovating the building at an estimated cost of $20 million. In addition to lending Carson Mall Partners money toward the renovation, the Redevelopment Agency plans to provide Ikea $7 million over the next 20 years toward the cost of refurbishing the Broadway site.

The Swedish-based chain is rapidly expanding its U.S. operations. Ikea’s Burbank store, spokeswoman Cynthia Nieman said, opened last November and posted sales 10% higher than projections in its first year of operation. The store, she said, averages 30,000 shoppers a week.

The Redevelopment Agency, made up of the five City Council members, two weeks ago approved new design plans for the mall. Now it is reviewing what the ownership group calls its final request before meeting at 7 a.m. Monday in City Hall.

Sharron King, a mall spokeswoman, said: “I would look at Monday as an opportunity for all of us to cross a certain threshold. It can go either way, obviously.”

Carson Mall Partners contends that the center’s future hinges on the Ikea deal. The 963,000-square-foot center has historically struggled to remain profitable and has unsuccessfully attempted to obtain private financing for the Ikea project. But if the Ikea project is approved, King said, the city could receive up to $20 million in revenue over the next 30 years.

However, critics say the revenue projections are overly optimistic. Additionally, they say, the mall proposal is a losing proposition for the city because the property tax increment revenue that the agency would receive from the project would be used instead to repay the loan.

“The Redevelopment Agency is putting the city in jeopardy,” said James Whitmore, treasurer of the Del Amo Homeowners Assn. “The city is taking all of the risk in this and the mall owners have very little at stake. What if these rosy projections do not occur?”

Others say that the mall renovation is less risky than doing nothing at all. They note that without financing for the mall’s improvements, there will be no increase in tax increment revenue.

Mayor Michael I. Mitoma, who also serves as Redevelopment Agency chairman, said it is the agency’s mandate to redevelop blighted areas of the city.

“We’ve got a chance now to not only attract a major retailer, but also renovate the mall,” Mitoma said. “My greatest fear is that if the mall folds, the impression is that Carson is folding also and that’s not the case.”

City Administrator Larry Olson said the agency might give conceptual approval to the project Monday, but that a final decision will not be made before a public hearing on the issue Dec. 5.