Caruso Readies $264M Project

GLENDALE, CA-Developer Rick Caruso has declared victory in the long-running battle between his Los Angeles-based Caruso Affiliated Holdings and General Growth Properties now that the REIT has dropped a lawsuit that aimed to stop Caruso’s $264 million Americana at Brand development. Caruso says he is preparing to raze last remaining structures on the site of the Americana at Brand mixed-use development, which is across the street from Chicago-based General Growth’s Glendale Galleria.

General Growth dropped its suit this week when it filed a petition for dismissal with the California Court of Appeal, which had ruled against the Chicago-based shopping center REIT in November. With the dismissal of the General Growth suit, Caruso Affiliated “will move quickly forward with the demolition of the remaining structures and site grading in order to set the stage for full project construction early next year,” says Rick Moses, SVP at Caruso Affiliated.

The petition by General Growth this week was the latest in a long string of legal and political maneuvering in which General Growth sought to stop Caruso from building the 475,000-sf Americana at Brand. General Growth officials declined to comment on the latest development in the company’s battle against the Caruso project.

The Americana at Brand is planned for retail, dining and entertainment uses with 338 housing units on 15.5 acres across from the Glendale Galleria regional mall, which is owned by General Growth. In addition to the court fight, the two development firms have fought against each other in other arenas for several years, including a fiercely contested city election in which Caruso asked voters to support his project and General Growth asked them to stop it.

Caruso called General Growth’s legal battle against his project an attempt to stop fair competition by “systematically attempting to sidetrack” his new mixed-use development. The Glendale City Council approved Caruso’s project in April 2004, after which General Growth supported a referendum for a city-wide election on the project.

After the voters sided with Caruso, General Growth filed a Los Angeles Superior Court suit challenging the Caruso project. General Growth lost in the county court and also on appeal in the state court.

The end of the General Growth suit leaves the two companies locked in another legal battle. Caruso has filed a $40 million antitrust and anticompetitive lawsuit against General Growth Properties.

Caruso’s suit claims that during the two companies’ campaigns on the referendum, General Growth intimidated tenants that were exploring leasing at the Americana at Brand, interfered with Caruso’s business and employed unfair business practices. Depositions are being taken in that suit, which is expected to go to trial early next year.