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Developer Declares Albany Mall Plan Dead

By Richard Brenneman
Friday July 21, 2006

Though an angry Rick Caruso said early Tuesday that he’s pulled the plug on his plans for a $300 million Albany waterfront mall, project foes say they expect him back. 

“Well, you don’t have to worry about me screwing up your waterfront,” Caruso told a political opponent at the end of a volatile Albany City Council meeting that shortly before 1 a.m. Tuesday. 

“It was pretty painful in the end,” he said to a supporter. 

Albany City Administrator Beth Pollard emailed councilmembers Tuesday afternoon that Matt Middelbrook, the former Los Angeles Deputy Mayor who has been running the developer’s campaign to win over Albany residents, had called to say “Caruso will not be moving forward with an application.” 

Councilmember Robert Lieber said Wednesday that he doubts Caruso is really withdrawing, and Mayor Alan Maris said he plans to call Caruso and ask him to reapply. 

“I’m hoping for it,” Maris said Wednesday. “I would like to see the opportunity for him to go through the normal application process.” 

Caruso staged a similar, much-publicized walkout two years ago in Glendale before the city council there agreed to his terms for a downtown mall. He had already spent $5 million on the project, according to an account in the Glendale News-Press. Three days later, he announced he’d reconsider given public and City Council support. 

Five months later, he defeated a referendum brought by opponents. 

Caruso and the city broke ground for the $324 million mall last month. 

A Santa Monica lawyer who represented Glendale and Caruso in a lawsuit filed by another mall owner was hired by Albany officials to handle legal work. He appeared at Monday night’s council meeting as an advisor to the council. 

The Albany council also voted unanimously Monday to approve placing an initiative on the November ballot after its proponents—environmentalists and other mall foes—secured the signatures of a fourth of the city’s electorate. 

That measure still faces a legal challenge which could keep it off the ballot (see related article).  


Developer demand 

Caruso insisted that the city commit to giving his project a full environmental impact review (EIR) even before it had seen a project application-- that led to Monday night’s showdown. 

His demand would have meant the city couldn’t reject his proposal out of hand, regardless of whether it violated city codes, plans or zoning, until it had gone through the extensive EIR process. 

City staff and fellow councilmembers weren’t ready to pass the resolution introduced by Councilmember Jewel Oakachi, both because they hadn’t had time to study it and because it was drafted by Caruso’s own attorneys. 

In a joint report, Pollard, City Attorney Robert Zweben and Community Development Director Ann Chaney declined to endorse it. 

“I do not recommend passage of a resolution drafted by Mr. Caruso,” said Zweben. 

If the council wanted to endorse the intent of the resolution, he said, staff should prepare their own version. 

When Okawachi moved approval, the attempt died for lack of a second. 

Councilmember Robert Good then moved that the council take no action on the proposal, pending submission of an application that presented Caruso’s plans in detail. Lieber offered a second, but the motion died on an three-two vote. 

Farid Javandel then moved that the staff prepare a resolution “that reassures the applicant that we would accept and process his application like any other.” Joined by Lieber and Good, that resolution carried the day against opposition from Okawachi and the mayor. 

The five-hour meeting ended moments later. 

Both votes had been preceded by long public comment periods, featuring sometimes heated remarks. 

Albany Unified School District board member David Farrell blasted what he called “the takeover initiative ... which threatens to rob the school district of badly needed funds and for the exclusion of the school board” from representation on the task force that will charter a future for the shoreline. 

That panel will consist of one member appointed by each of the city’s five councilmembers and one representative each from four environmental groups: Citizens for the Albany Shoreline, Sustainable Albany, the Sierra Club and Citizens for East Shore Parks. 

Project proponents hailed the mall plans as an economic stimulus for a cash strapped city increasingly forced to rely on bond measures to maintain basic services. Escape from increased property taxes was repeatedly invoked. 

Foes cited the potnetial threat to merchants on Solano and San Pablo avenues and the need to protect an environmentally sensitive waterfront. 


The project 

By Tuesday morning, rumors were already flying that had Caruso looking for new sites in Berkeley and Richmond. 

Middlebrook confirmed late Thursday that his firm is talking with officials in other cities, and said the firm is a eager to find another location in the East Bay. 

He declined to identify the specific cities. 

“We’ve had a number of calls in the last couple of days about potential opportunities,” he said. 

Caruso Affiliated Holdings had teamed with track owners Magna Entertainment to propose a $300 million mall on the track’s northwestern parking lot, complete with shops and major retailers—the Nordstrom name was bandied about and talk of apartments overhead. 

Shoreline renovations, a new park and public beach access were assured. 

The plan was paired with another joint effort at Magna’s Santa Anita race track in Southern California. 

Caruso and Magna waged a long detailed campaign to win over voters, holding innumerable “coffees” and other meetings where tax benefits were stressed, often by Caruso himself. 

Aiding the effort has been the public relations firm of Dion Aroner, former state Assembly member and a close political ally of her successor, Loni Hancock, and Berkeley Mayor Tom Bates, a former holder of the assembly seat and Hancock’s spouse. 

Caruso, a Southern California developer—a well-connected Republican and Bush donor who told another supporter he’d recently met with Karl Rove—has built his father’s rental car fortune into a shopping center empire. 

One mall, The Grove in the Los Angeles Fairfax District, even outdraws its next door neighbor, the famed Farmers Market, once the state’s most popular tourist attraction. 

Caruso builds historically themed open air shopping “experiences,” with broad, scenic expanses and designs architectural critics either love or hate. City governments usually love them for the sales taxes they bring.