After Four-Year PR Battle, Caruso Concedes Defeat in Carlsbad Development Deal

In a hotly contested special election, voters in Carlsbad, Calif., rejected a retail center proposed by Caruso Affiliated, the developer of the prominent retail centers The Grove and The Americana at Brand.

According to the County of San Diego Registrar of Voters, 20,362 of Carlsbad voters, or 51.99 percent, cast “no” votes on Measure A. The ballot measure was a referendum on approving a Caruso Affiliated retail center in Carlsbad, a well-to-do community in San Diego’s North County. Supporters of the measure tallied 48.01 percent, or 18,806 votes. The special election took place on Feb. 23. The vote was called on Feb. 29. (Unofficial election results were released on Feb. 25 and published in the Feb. 26 issue of California Apparel News.)

Citizens for North County, the group that organized the campaign against the center, posted a concession statement from Rick J. Caruso, founder of the Los Angeles–headquartered Caruso Affiliated, on the group’s website (

“I have called the leadership of the citizens for North County and congratulated them on their hard-fought campaign,” Caruso said. “This was a close election with a historically strong voter turnout on both sides. Both sides share a common love for their Carlsbad community, a sentiment we share. While we had hoped for a different outcome, we are proud of our effort, our plan, the integrity of our message, and we are thankful for the great friends and supporters we have made over the past four years. We are very grateful for their support and hard work.”

The election represents a rare public setback for Caruso, who has developed some of the most popular Southern California malls of the past decade.

The stakes for the Carlsbad retail center were high. Caruso waged a four-year public-relations campaign to convince Carlsbad voters that his project was a good choice. He promised that a full-line Nordstrom department store would open on the lagoon where he owned a parcel of land. He also promised that his plan would include open space on the lagoon where visitors could go on nature walks. The plan also forecast that a section of the lagoon land would be preserved as an agricultural zone. The space was once devoted to family farms.

The vote also represents a setback for Carlsbad’s City Council. On Aug. 25, the council approved the Agua Hedionda South Shore Specific Plan, which proposed a 26.7-acre Caruso retail center. It was to be located east of the I-5 on the south shore of Agua Hedionda Lagoon in Carlsbad. On Oct. 27, opponents of the project gathered enough signatures to put the project up for a vote.

Project opponents felt that their long-held wishes to develop more open space in the lagoon area had been ignored by the City Council, said Samantha Hackett, who has lived in Carlsbad for more than a decade. She voted against Measure A. The issue had dominated the city’s life. Residents had received mailers in support of the project daily, Hackett said. There were also frequent ads in newspapers and other media.

Mall shopping is well represented in Carlsbad. It’s a mid-size town with a population of 110,997 and an average household income of more than $107,000, according to a city profile. Rouse Properties Inc. runs The Shoppes at Carlsbad retail center, which is the address to anchors Macy’s and JCPenney. Simon runs Carlsbad Premium Outlets, which is the address to outlet stores for luxury brands such as Brooks Bros. and contemporary labels such as DKNY. There’s boutique shopping at The Forum Carlsbad, which is the address for retailers such as H&M, Lululemon Athletica and a Tilly’s. The city also is the site of the Legoland California Resort amusement park.

The future of the land where the Caruso mall was to be built remains a question. Caruso could submit another plan for the area, or even the same plan, but he would start at the beginning. His plans would be required to go through the review of the California Environmental Quality Act and the California Coastal Commission, according to a city communication.

Caruso had a deal to acquire the land for the proposed retail center from landowner San Diego Gas & Electric. If Caruso terminates the deal, someone else could purchase the land.