The city of Glendale signed off on a plan on Monday to spend $37 million to help redevelop the struggling Bayshore Town Center in exchange for clearing a decade-old debt on the property.
The New York-based developer AIG Global Real Estate Services has put forward a proposal that calls for greatly reducing the mall’s retail space, replacing it instead with apartments, offices or other uses, all steps meant to position the property for success even as many big-box stores fail. AIG specifically plans to tear down an old part of the property and a building that had once housed a Boston Store. When that store closed in August, the mall’s retail space was reduced by more than a third.
A consultant hired by AIG has estimated that a full overhaul of Bayshore, which has more than 50 vacant tenant spaces, could cost $75 million.
Under a plan approved by the Glendale Common Council on Monday, the city would provide AIG $37 million worth of financing for the proposed redevelopment. The developer would pay off $57 million that’s still owed on the property, debt the city took on in 2006 to build the $300 million mall. The mall is now worth about $65 million, and because the property is generating almost no property-tax growth, city officials estimate they won’t be able to pay off their existing debt on the mall by a deadline set for 2029.
Glendale officials expect overhauling the property will increase its value by $200 million.