$100 Million Asian Mall-Hotel Project in Milpitas, California is Effectively Dead
Ian Bauer | Mercury News | August 11, 2017 2:25pm
Aug. 10--Pacific Mall Silicon Valley, a planned $100-million Asian-themed mall and hotel meant to replace a portion of McCarthy Ranch Marketplace in Milpitas and reinvigorate the largely vacant shopping center site, will likely not be doing anything here anytime soon.
"The Pacific Mall project, from my understanding, is no longer an active project," Milpitas Planning Director Bradley Misner told the Post last week.
Misner also confirmed the project's site development and conditional use permits lapsed last Friday, Aug. 4 -- another sign the development has foundered.
"The entitlements have now expired and no permits associated with the project have been obtained by the developer," he said. "I do not know more of why the project did not move forward or when, or even, if the developer informed the city."
Toronto-based The Torgan Group, which purchased McCarthy Ranch Marketplace for $38 million in early 2012 with the hopes of reinventing it as a new shopping destination with an adjacent hotel, could not be reached for comment by press time.
The developer had extensive history of constructing malls in Canada. That includes developing the 270,000-square-foot Pacific Mall in Markham, Ontario, which the company touts as the largest Asian-themed mall in North America.
In 2014, The Torgan Group -- calling itself TMS McCarthy Inc. for the purposes of its Milpitas project -- received City Council approval for a conditional use permit, general plan amendments and a final environmental impact report to allow the Pacific Mall project to proceed at 11 to 111 Ranch Drive.
In authorizing TMS McCarthy to convert the 25.1-acre retail site near the intersection of McCarthy Boulevard and Ranch Drive to a mall, the council approved the demolition of shuttered buildings there from the old Borders Books and Music and northward to the Dollar Tree store.
TMS McCarthy had wanted to build 284,587 square feet of retail space for individual sellers of boutique clothing, electronic goods and other merchandise in a two-level mall, as well as a 250-room hotel and an 835-stall underground parking garage.
The project was supposed to increase floor space by a net of 304,726 square feet, including the hotel. As proposed, space was to be sold to individual owners as condominium units for small business retail and commercial uses.
Up to 450 stores -- with tenant spaces ranging in size from 143 square feet to 2,766 square feet -- would be allowed at the revamped site, which also is to feature a gaming arcade, a community performance stage and a large food court.
According to the developer, construction of Pacific Mall was supposed to be done by 2017. However, TMS McCarthy returned to the city last year asking for more time to advance the project. In February 2016, the Planning Commission voted to extend for 18 months the developer's use permits and zoning changes.
The city's one-time extension was to end Aug. 4, 2017.
At the commission's 2016 meeting, Sudhir Mandal, commission chair, asked what had happened to the mall project during the preceding two years.
"Obviously, they've been moving forward with the project," replied Leigh Prince, a developer representative. She said the developer has worked with the city on matters such as fire codes and updating existing plans, and added that the basis of the extension was to continue negotiations with existing tenants.
"(It) has been a little more complicated than anticipated," Prince said.
Mandal then queried about the project's financial situation. "Are we pretty solid there?" he asked.
"I haven't heard about any difficulties with the financing issues," Prince said. "It has been simply fitting the jigsaw puzzle pieces into the right place."
Although she did not get into specifics, Prince said those pieces included seeing who wanted to stay and who was ready to relocate.
Previously, Keyvan Irannejad, the city's chief building official, told this newspaper that at the beginning of last year TMS McCarthy had been working with Best Buy at 63 Ranch Drive and PetSmart at 175 Ranch Drive to possibly relocate those stores elsewhere near McCarthy Ranch, likely closer to Walmart at 301 Ranch Drive.
This week, Irannejad reconfirmed that the mall development had stalled.
"What I was told is that the project is on hold," he said.
Still, Irannejad said he believed plans to relocate Best Buy had at least been initially negotiated though he noted no plans for moving PetSmart had been hammered out.
On Friday, Erin Gray, a senior corporate communications manager at PetSmart's headquarters in Phoenix, would not confirm any details about the company's Milpitas store or its future in McCarthy Ranch.
"We share news of forthcoming PetSmart store locations after leases are signed," Gray said in an email to the Post.
Meanwhile, calls and emails to Best Buy went unanswered by press time.