Latest on Redlands Mall redevelopment: Lender files new deed of trust, keeping downtown site under original developer’s control
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Latest on Redlands Mall redevelopment: Lender files new deed of trust, keeping downtown site under original developer’s control
REDLANDS, Calif. — The developer behind the proposed State Street Village project has avoided foreclosure on the Redlands Mall property and signed a new loan agreement with its lender, according to public records.
Why it matters: While the future of the long-shuttered mall site remains uncertain, the filings confirm that the property has not been sold, and that the foreclosure triggered by a default on a $17 million loan has been lifted.
Details: Following months of postponed auction dates, Hankey Capital LLC, the lender, officially canceled its foreclosure action on April 29, filing a Notice of Rescission that ended the legal process to sell the 12-acre downtown site. The next day, Village Partners, Inc. signed a new Deed of Trust securing a $1.625 million loan from Hankey and using the mall property as collateral.
The new agreement, obtained through public records filed May 6, includes updated terms for repayment and reinforces the developer’s ongoing control of the site. Despite the transfer language in the deed of trust, Village Partners retains ownership of the property unless it defaults on the new loan.
The filing also includes a security agreement and assignment of rents, giving Hankey the right to collect income from the property if Village Partners defaults again.
The terms require Village Partners to maintain the property, pay taxes and insurance on time and avoid taking on new debt without Hankey’s written consent. If those conditions aren’t met, the lender reserves the right to foreclose or assume control of any income generated from the site.
What does this mean for the mall redevelopment?: The filing suggests a negotiated restructuring between Hankey and Village Partners after the project stalled due to rising interest rates, construction costs and investor uncertainty.
The original development plans—unanimously approved by the Redlands City Council and Planning Commission in May 2022—called for approximately 700 housing units and 65,000 square feet of retail, commercial and restaurant space, centered around a multi-block pedestrian plaza.
Under the conditions of approve, the developer was granted five years to break ground on the project.
In a February interview with Community Forward Redlands, Kaitlin Morris, director of development for Village Partners Inc., said the team was adjusting the project to align with current market conditions. She said minor refinements were being made to the plan, including some reductions in scale, but emphasized that the overall vision would remain intact and that updates would be shared publicly in the coming months.
No new timeline for construction has been announced, and it remains unclear whether the refinements will require further city approvals.
Community Forward Redlands has reached out to Village Partners for additional comment.
This is a developing story. Check back here for updates.
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