Auction canceled for Redlands Mall property after lender withdraws foreclosure

REDLANDS, Calif. — The planned May 1 public auction for the Redlands Mall property has been canceled after the lender withdrew its foreclosure action, according to public records.

On April 28, Chicago Title Co., acting as trustee, filed a notice of rescission, formally canceling the notice of default and election to sell that had been recorded last September.

Why it matters: This action effectively ends the foreclosure process and halts the auction on the 12-acre downtown property, which was approved in 2022 for a large mixed-use redevelopment called State Street Village. Despite the cancellation of the foreclosure auction, uncertainty over the site’s future remains.

Details: Earlier this year, Community Forward Redlands reported that the auction was originally scheduled for Jan. 23, 2025, and postponed multiple times — to Feb. 13, Feb. 20, March 20, April 4, and most recently May 1 — at the lender’s request.

The rescission does not erase the underlying obligations of the loan but removes the immediate threat of a trustee’s sale.

It is unclear whether the cancellation means VPV State Street Village LLC and lender Hankey Capital LLC have reached a resolution on the defaulted $17 million loan.

Community Forward Redlands has reached out to Village Partners for comment but has not yet received a response at the time of publishing.

What they’re saying: Kaitlin Morris, director of development for Village Partners Inc., said earlier this year the team was working with its lender to adjust the project to current market conditions. “Redlands needs housing. It needs walkable housing. That’s our priority, and that’s our focus,” she said in February.

Background: The State Street Village project was approved by the Redlands City Council in May 2022, with plans for 700 housing units and roughly 65,000 square feet of commercial space, including a multi-block pedestrian plaza.

Originally expected to break ground in late 2023, the project stalled amid high interest rates, rising construction costs, and shifting investor dynamics — challenges affecting many large-scale developments across Southern California.

What’s next: Village Partners has previously indicated that project refinements are underway and will be announced in the coming months. It remains unclear whether these changes will require further city approvals or adjustments to the timeline.

Community Forward Redlands will continue to track updates as they become available.