The city of Glendale would kick in $36.7 million for an overhaul of the struggling Bayshore Town Center in a deal that could clear the city of debt it took on a decade ago to develop the property.
The plan, put forward last fall by the mall owner, the New York-based AIG Global Real Estate Services, would greatly reduce the mall’s retail space and find new uses for existing buildings, perhaps by opening a hotel, apartments, restaurants or a medical complex. The plan still needs approval from Glendale’s city council.
Like big-box retailers, the mall has struggled in recent years amid competition from Amazon and other online sellers. The property now has more than 50 tenant spaces which are vacant.
AIG acquired the mall in 2017 and quickly announced plans to redevelop it. The mall lost Boston Store in 2018, greatly reducing its retail space, and other large retailers such as Sports Authority and Sears in recent years.
A revised redevelopment plan released by the city this week calls for AIG to pay upfront for an overhaul of the property and for the city to offer tax incentives after the work is completed. A consultant AIG hired to oversee the project, Cypress Equities Managed Services, of Dallas, has estimated that redeveloping Bayshore Town Center would cost about $75 million.
The plan considered Tuesday would have the city cover some of those costs by taking any additional property taxes generated as a result of the overhaul and providing the money to the developer.
City officials expect the redeveloped property to increase the value of the mall to $200 million. The city would then pay the developer as much as $2.8 million a year until 2033.
The city still has about $56.6 million in outstanding debt that it took on in 2006 to build the $300 million Bayshore Town Center. This latest proposed deal with AIG would have the developer pay off Glendale’s outstanding debt. The city estimates the value of the mall at $65 million.
Without the deal, Glendale officials estimate that the city won’t be able to pay off the debt it incurred to support the mall’s initial development by a deadline set for 2029. The property is currently generating “almost no” growth in the city’s tax base, according to city documents.Follow @natebeck9