The tale of the ghost mall in Elk Grove

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This week: a ghost story, about a deceased shopping mall. It’s a 15-year odyssey of big dreams and tragic failure with maybe a bit of betrayal sprinkled in, set in Elk Grove, California. The players include Howard Hughes’ namesake real estate development company, some Miwok tribe descendants and members of local government who remain optimistic even after 15 years of disappointment. On March 9, the final act of this drama began with a second, or maybe third, groundbreaking on 64 acres of once-again empty land on the city’s outskirts.

And what is the final act of this story of light and dark that at one time promised to transform the entire city of Elk Grove?

A casino, one that’s about the same distance from San Francisco as Cache Creek and River Rock.

Elk Grove is a bedroom community of 200,000 located in the Central Valley, south of Sacramento. The biggest employer in town is Apple, whose local campus provides 5,000 jobs. There is no downtown Elk Grove, no retail core. The Lent Ranch Mall project, which broke ground in 2007, was supposed to change this.

They weren’t going to build a New Urbanist downtown; it was definitely going to be a mall, the centerpiece of a comprehensive plan designed to cover 295 acres and nine separate districts. When complete, the new neighborhood would feature retail, office and commercial space, entertainment and dining districts and housing, including 16 acres of multi-family development. It wasn’t necessarily transit-oriented, but it was adjacent to Highway 99, which could whisk you into Sacramento in 20 minutes. The mall was the first domino; once that was complete, everything else would fall into place.

But development has a way of going sideways.

No one factor doomed the Lent Ranch Mall. Instead, a series of mishaps and reversals led to its demise, starting with the 2008 recession, which drove the half-complete project’s original developer, General Growth Properties, into bankruptcy.

Enter the Howard Hughes Corporation, which received the mall, now called the Elk Grove Promenade, in what was then the country’s largest-ever bankruptcy proceedings. Hughes planned a “regional outlet center” with “multiple open green spaces, outdoor dining and a children’s play area,” and then did…nothing. They didn’t move forward with the project (save for some nifty drawings), didn’t return the mayor’s phone calls and said they’d commence construction only after 50 percent of the mall’s 400,000 square feet of retail space had been leased.

They never even came close. Hughes’ development agreement lapsed in November 2019, leaving in its wake an untouched ghost mall and a decade of non-activity for Elk Grove’s big project. The mall was an eerie, confusing monument, a motley collection of skeletal buildings surrounded by empty farmland.

By then, half of the land (and mall buildings) had been purchased by Boyd Gaming of Las Vegas — on behalf of Wilton Rancheria, a tribe looking to establish economic self-sustainability via casino construction. They’d supply the capitol and Boyd would run the show. The mall was demolished in late 2019 and this year, on March 9, Wilton Rancheria broke ground for the Sky River Casino, which they say will bring 485 jobs when it’s completed in 2022.

The question for Elk Grove now is: Can a casino function as the centerpiece of an ambitious development plan, or should they scale back (or abandon) their hopes after 15 years of driving past what they’d hoped would be a game-changing development but instead turned out to be their own depressing Christo art installation? If and when the Sky River Casino is built, will they come?

Unfortunately, the track record for casinos as transformative economic engines isn’t great. Casinos do create jobs, but, as David Frum wrote in the Atlantic Monthly in 2014, they don’t encourage adjacent development. “A casino is not like a movie theater or a sports stadium,” Frum said. “It is designed to be an all-absorbing environment that does not release its customers until they have exhausted their money.” The future of Elk Grove’s would-be megadistrict, Frum seems to be saying, is a casino surrounded by farmland.

Of course if you’ve got an entire city of casinos, like in Las Vegas, it can work; hotels, restaurants, convention centers and spas will grow up around the casinos. Sky River promises these things — a 12-story resort hotel with restaurants, a convention center, a spa — but they’ll be (literally) alone in their field.

At one time, the plan was for big box stores to follow the Hughes outlet mall; will they come for a casino? Will office and commercial space, residential development, entertainment and restaurants come? Honestly, it doesn’t seem likely, which puts Elk Grove not back at square one again but more like square one-and-a-half. It’s not a terrible outcome for the ghost of the Lent Ranch Mall, but nor is it a hoped-for outcome for the transformative project that has haunted the dreams of Elk Grove boosters since 2007.

Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.

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