Simi Might Negotiate With Mall Builder

It has been a long time coming, but tonight the Simi Valley City Council will decide whether to negotiate with an Ohio-based developer to build a long-sought regional mall.

The latest plan to lure a developer comes after the last deal to develop the property fell through almost five years ago during the recession.

Since then, the city has worked to find a developer interested in the property, located north of the Simi Valley Freeway near 1st Street. In 1993, the city purchased an adjacent 32-acre parcel for $3.5 million to attract interest and sweeten the deal.

This year, the city signed an option to buy another 80 acres valued at about $9 million on which the mall would be built. Simi Valley leaders hope the city’s involvement will set this proposal apart from its failed predecessor, Mayor Greg Stratton said.

“We’re being much more aggressive,” Stratton said. “And that lessens the risk for the developer. It gives him confidence and tells him that he has the support of the community and the council.”

Although the city will have to pay about $2,000 for the first six months of the option agreement with Lagomarsino Orton / Eadington Properties, the present landowners, city leaders hope the developer will take over the option. If that happens, the city will not have to actually purchase the property, said Assistant City Manager Don Penman.

“There is really no financial risk for the city here,” Penman said.

The 18-month option agreement includes an additional payment of $50,000 for the second six-month period, and $100,000 for the third six months. But Penman said he expects that if the project is economically feasible, the developer will take over the purchase option by October.

Tonight, the council will vote on whether to sign an exclusive negotiating agreement with Forest City Development of Cleveland.

The agreement would ensure that for up to 18 months, while Forest City planners study the economic viability of the mall, the city will not negotiate selling the land with any other developer, Penman said.

Melvin Simon & Associates, which developed the nation’s largest mall in Minneapolis, was the last developer interested in the site. They put the project on hold in 1990 because the recession scared off potential tenants.

The city had approved preliminary plans and environmental reviews for the 1-million-square-foot mall. Construction was expected to cost more than $1 million dollars, but Simon & Associates pulled out of the deal, citing the poor economy.

This year, Simi Valley contacted Simon and 18 other development companies to gauge interest in resurrecting the mall project. Simon was not among the three companies that responded. Forest City Developers was picked by the city staff as the best of the lot, Penman said.

Forest City will be able to work from those earlier plans, saving the money it would cost to complete an environmental review, Stratton said. The relative affluence of the area and its projected growth are also attractive incentives to build the mall, he said.

On top of that, there are signs of an economic turnaround, he said.

“We are seeing signs of life,” Stratton said. “You don’t want to wait too long because it takes time to get things done. If you start the process now, you might have the mall on line for Christmas, 1998.”