Item Number: 9
City Council / Board of Directors
Consent Calendar
Meeting of: July 21, 2026
Submitted By:
Asdghik Keyvanian, Finance Director / City Treasurer
Subject:
Macerich Assistance Payment Year 13 - Mall of Victor Valley Development Agreement Recommendation:
That your Honorable City Council authorize the assistance payment as provided for in the Development Agreement with Macerich Victor Valley LLC in the amount of $264,457 for Calendar Year (CY) 2025.
Fiscal Impact:
This item has a fiscal impact of $264,457 out of the General Fund. There are sufficient funds in the FY 2025-2026 budget for this expense in the account below:
Strategic Plan Goal:
This item aligns with Goal C, Strategy 7: Community and economic development, attracting new businesses to the community and working to retain existing businesses.
By working in partnership with the Mall of Victor Valley, this agreement will assist them in meeting performance measures to attract new businesses.
Background:
At the City Council meeting of July 17, 2012, the City Council adopted Ordinance 2291 approving a Development Agreement with Macerich Victor Valley LLC, owners of the Mall of Victor Valley (the Mall). The Development Agreement was approved resulting from Council’s recognition that the Mall had experienced declining gross sales since 2007 which directly correlated with a reduction in sales tax generated to the City and available to fund its essential public services, including police and fire. The analysis at that time had shown that gross sales at the Mall decreased from $175 million in 2006 to $106 Account Description Available Budget
1000010-52300-97029 General Fund Contract Services - Macerich $400,000.00 4 7
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million in 2010. To encourage reinvestment in the Mall and stimulate increased sales tax generation, the Development Agreement included City assistance payments contingent upon the Mall’s completion of specified redevelopment performance measures.
Upon approving the subject Development Agreement, the City required, as a condition to its assistance, that the Mall perform redevelopment that would reposition the Mall to becoming a destination for the diverse shopping demographics of the valley and keeping it fresh and attractive for future tenants of the Mall. Among the required performance measures, the Mall was required, pursuant to Article 5 of the Development Agreement to:
(1) Successfully relocate into expanded space and cause for the public opening of a reformatted JC Penney;
(2) Successfully cause for the opening of a new Macy’s as a fashion retail anchor; (3) Complete the remodel of all exterior entry ways; and (4) Sign leases for up to 25,000 square feet of space (that was the former JC Penney anchor pad) with planned occupancy within 9 months from the date of the signed lease.
To assist in offsetting certain costs associated with these requirements, once those performance measures were achieved, the City agreed to provide assistance payments in annual amounts equal to the sales tax received by the City that is in excess of a baseline amount retained by the City of $1 million. Pursuant to the Development Agreement, the Mall is permitted to receive the tier one maximum amount until an aggregate collection of up to $18,886,644.00 in payment assistance or for a period of 28 years, whichever occurs first. If the maximum of $18,886,644.00 is not reached by the end of the 28 years, the City of Victorville will have reached the conclusion of the assistance agreement, and no additional payments will be made. The performance measures were satisfied by the Mall in calendar year 2013, therefore, 2013 became the measurement year where City assistance was to be commenced. Notably, the Mall added Dick’s Sporting Goods to satisfy performance measure #4 and has exceeded the space requirement of the Development Agreement.
Discussion:
City staff contracts with HDL Companies to conduct sales tax analysis for all tenants at the Mall, including its anchor tenants. In the aggregate, that analysis is represented with the following:
Calendar Year 2025
Sales Tax Generated at Mall of Victor Valley $1,268,457 Sales Tax Threshold ($1,000,000)
Assistance Payments Due (Gross) $268,457
Ex C-10 Contract Maintenance Fee ($ 2,000)
Ex C-11 Sales Tax Analysis Fee ($ 2,000)
Due to the Mall of Victor Valley $ 264,457
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Attachment A shows the charts provided for in the original agreement which reflect a predicted erosion in sales tax as well as the Sales Tax Increment Sharing proposal by Macerich Victor Valley LLC. Attachment B shows actual sales tax payments since the start of this development agreement. If approved, this payment will bring the total payments to $3,834,178 of the $18.89 million threshold. The sales tax generated at the Mall of Victor Valley in calendar year 2025 reflects a continued moderation from the post- pandemic peak experienced in 2021. Economic factors such as elevated interest rates, inflationary pressures, and changing consumer spending habits have continued to impact retail activity. In addition, the ongoing growth of e-commerce continues to influence traditional brick-and-mortar retail sales. Despite these challenges, the Mall remains an important regional retail destination and continues to generate sales tax revenues above the threshold established in the Development Agreement. Staff remains available for any questions the Council may have.
Prepared By:
Amber Campbell, Finance Analyst
Attachments: A. Macerich Development Agreement Original Charts B. Payments Distributed to Macerich to Date