Howard Hughes Calls it Quits, Throws in Towel on Elk Grove's Ghost Mall and Will Demolish Structure



UPDATED 3:30 a.m. January 16 |

As widely expected by several people who have observed it for years was made official today - the unfinished shopping now known as the Outlet Collection at Elk Grove will never be built.

More specifically the owners of the mall that has sat unfinished for 10 years on the city's south side at Highway 99 and Kammerer Road will be demolished. The Howard Hughes Corporation (HHC) has notified the city of Elk Grove of its intentions today.

Construction on the unfinished shopping center stopped in July 2008 during the international credit crisis that hamstrung the original owner, General Growth Properties. The Ghost Mall as it has become derisively called was named the Elk Grove Promenade in 2008 and Lent Ranch Mall before that.

After GGP lost the property in what was then the country's largest real estate bankruptcy, it was awarded to HHC in bankruptcy proceedings. HHC continually promised to complete the facility even though they were uncommunicative to the point Elk Grove Mayor Steve Ly admitted they would not return his calls.

”The City did everything within its power to move the project forward, but all decisions on the development of the mall ultimately rest with HHC,” Elk Grove Economic Development Director Darrell Doan said. “While we are disappointed that HHC was not able to complete the project, we are excited for the opportunity to potentially partner with a new developer who shares the City’s vision for the site and its potential as a regional destination.”

Some of those efforts from the city included regularly sending Doan and his predecessor, Randy Starbuck to Las Vegas conventions to hawk leases. In their occasional announcements, HHC said construction would start once 50-percent of the leases of the 400,000 square foot shopping facility was secured.

Although HHC let its development agreement lapse in November, development of many adjoining commercial parcels hinged on completion of the mall. In an email sent by Elk Grove resident Connie Conley, the city's public information officer Kristyn Laurence was asked "Does this also mean that the surrounding landowners that had to wait until the mall was built and a percentage occupied are also released from their contractual agreement?"

In response, Laurence told Conley "I would need to check in with legal on your question about the other agreement because, unfortunately, I am not familiar with its details. "

The last significant development at the site came two years ago next month when Las Vegas-based Boyd Gaming purchased 36-acres, about half of the site, on behalf of the Wilton Rancheria for their proposed $500 million gaming facility. Even though the Wilton Rancheria had the land placed into federal trust for their casino and claim construction on their acreage will start this year, that too might be unrealistic.

Included in their purchase from HHC was about half of the existing unfinished structure. At the time Wilton Rancherias officials said their portion of the structure would be demolished for the casino, although that has not yet occurred.

In spite of an aggressive schedule, the casino project faces a series of challenges including a lawsuit from gambling watchdog Stand Up For California in U.S. District Court in Washington DC. That lawsuit is still in the district court, and even if Judge Trevor McFadden rules in favor of the Wilton Rancheria, SUFC has indicated an appeal will be made to First United States Court of Appeals, also in Washinton DC.

Interestingly, when the Elk Grove City Council approved the memorandum of understanding between the city and the Wilton Rancheria, they justified the agreement on the basis that the casino would help jump-start completion of the shopping center.  With the uncertainty of when the construction of the casino might start, barring its purchase from the Wilton Rancheria, the parcel continues to face an uncertain future.

Notwithstanding the legal challenges, Boyd Gaming, who purchased the property for the Wilton Rancheria, announced in October 2018 they would provide management for the casino once it opens, but would not be financing the project. The Wilton Rancheria has not announced who will provide the financing for the project.

In their press release on the demolition of the structure, the city indicated a willingness to change the use of the property saying it "could be rezoned, allowing for other uses." Many longtime observers in the community speculate should the Wilton Rancheria overcome their legal and financing hurdles they could purchase the rest of the site from HHC.

One longtime observer of the mall proceedings from its earliest incarnation is Elk Grove resident Lynn Wheat. A longtime fixture at city council and planning commission meetings, Wheat, who advocates for environmentally friendly smart planning, has long decried what she has characterized as poor practices at city hall and questioned the economic viability of the doomed project.

"This news comes as no surprise to me. Before the city approved the mall, many residents, including myself approached the City Council and questioned the economic feasibility of such a mall because the developer had no signed tenants," Wheat said. "Fourteen years later, apparently nothing has changed." 

Below are some of the 16 videos taken of the Ghost Mall over the years including rare footage of construction activity in 2008 before construction came to an abrupt halt. 






 






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1 comment

D.J. Blutarsky said...

Let's look at the positive side-with the mall being demolished, it will now give the auto mall more room to store their unsold inventory. Throw up a movie screen or two and it will look like a drive-in!

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