Developer Drops Plans for Glendale Retail Site

Developer Rick Caruso has abandoned plans for an elaborate outdoor shopping center in downtown Glendale, and city leaders offered dueling predictions Thursday of the effect of the move on future commercial development.

“I’ve lived here almost 65 years and I think this is the worst thing that has ever happened to the city I call home,” Councilman Dave Weaver said. “Our loss is going to be another city’s gain. I think we’ll find [Caruso] over in Burbank.”

Caruso, whose past projects include the Grove next to the Los Angeles Farmers Market, withdrew his proposal Tuesday for the Town Center, a $264-million retail and residential complex across the street from the massive Glendale Galleria, when it became clear he would be unable to obtain key zoning changes.

Because of opposition by the Galleria’s owners to the project, zoning changes necessary to build housing over retail space would probably have required the City Council’s unanimous approval -- an unlikely prospect given Mayor Frank Quintero’s opposition to the Town Center.

The mayor and two other council members also indicated Tuesday that they would oppose an alternate method to process the project by amending the city’s General Plan, prompting Caruso to walk away from four years’ and $5 million worth of work.

Quintero predicted that multiple developers would approach the city with their own plans for the site. He said he would favor a project that would be a better financial deal for the city, with less retail and more entertainment and restaurants.

“From my perspective, everyone seems happy we’re going to explore another alternative,” Quintero said.

By contrast, Caruso said in an interview Thursday that his office had been flooded with phone calls from Glendale residents upset with the way he was treated by the city. He said he also received a call from a neighboring city, which he declined to identify, that indicated “they’d welcome us with open arms.”

But Caruso said he would be willing to reconsider his position if the City Council would agree to amend Glendale’s General Plan to allow the Town Center to advance.

“The big winners out of this are the neighboring cities, in particular Pasadena and Burbank, because Glendale once again has not figured out how to be competitive and retain retail sales,” Caruso said.

Glendale’s city attorney, manager and planning staff will meet next week to draw up a list of options to present to the city’s redevelopment agency.

General Growth Properties, which owns the Galleria, has previously offered to develop the site. “We’re really looking forward to working with the city to figure out how we can accomplish the right Town Center,” said Carol Jacobs of General Growth Properties. Jacobs’ company could face challenges similar to those that drove Caruso away, including the need for zoning changes and opposition from city leaders.

“If I get a letter from [General Growth Properties], I’ll trash it,” Weaver said.

If General Growth or another developer does not quickly step in with an alternative, David Dale-Johnson, an associate professor at USC’s Lusk Center for Real Estate, said Caruso could strike a deal with a neighboring community and take some retailers with him who might have located in Glendale.

“The question becomes, if Burbank or another city and Caruso put together a good deal and leverage off the success of the Grove, it could become the retail center of choice in that set of communities,” he said.