HomeMy WebLinkAbout2026-06-09; City Council; 10; Authorization to Negotiate with SteelWave LLC, Steerpoint Capital and Carlsbad 2525 LLC for the future use of the City’s Parking Lot Properties Located at The ShoppesCA Review CDS
Meeting Date:
To:
From:
Staff Contact:
Subject:
District:
June 9, 2026
Mayor and City Council
Geoff Patnoe, City Manager
Curtis M. Jackson, Real Estate Manager
curtis.jackson@carlsbadca.gov, 442-339-2836
Authorization to Negotiate with SteelWave LLC, Steerpoint Capital and
Carlsbad 2525 LLC for the future use of the City’s Parking Lot Properties
Located at The Shoppes
1
Recommended Action
Adopt a resolution identifying the city’s project team and future negotiating agents responsible
for negotiating the sale or lease of the city-owned parking lot properties located at The Shoppes
at Carlsbad with representatives of SteelWave LLC, Steerpoint Capital and Carlsbad 2525 LLC.
Executive Summary
The new owners of The Shoppes at Carlsbad regional shopping center, SteelWave LLC and
Steerpoint Capital and Carlsbad 2525 LLC (collectively, SteelWave LLC), submitted a letter to the
city on May 27, 2026, asking to negotiate the terms of either a lease or purchase of the 67.27
acres of city-owned parking lot properties that surround their shopping center. The properties
were identified to be considered for sale or transfer in in the city’s Real Estate Strategic Plan,
which was approved by the City Council in 2017.
The action before the City Council is to identify the city’s negotiating agents, who will be
responsible for exploring options for potential uses of these properties and working with
representatives of the shopping center toward the ultimate lease or sale of the properties.
Explanation & Analysis
Parking lot site
The Shoppes at Carlsbad is located south of Highway 78, north of Marron Road, east of Monroe
Street, and west of El Camino Real, including the southwest corner of El Camino Real and
Marron Road. The city-owned parking lot properties consist of numerous parcels totaling 67.27
acres.
The city’s acquisition of the parking lot properties and the use agreements with the mall date
back to 1969. Exhibit 2 provides the history of the parking lot properties acquisition history.
There are deed restrictions and an operation agreement on the property that give the mall
owners ultimate authority to make decisions on the use of the parking lot.
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Site rezoned for mixed use
The Housing Element is the element of the city’s General Plan that addresses housing needs. A
key goal of the city 2021-2029 Housing Element is to make sure the city has enough land to
meet its required share of regional housing needs. Under state law, the city must plan for 3,873
new housing units during the 2021–2029 housing cycle. There are criteria imposed by the state
when identifying property for possible housing development and the state Housing and
Community Development Department prefers that cities identify vacant, level properties with
access to public utilities for housing development.
After significant community input and public meetings, the City Council adopted the Housing
Element Rezone Program on Jan. 30, 2024. This program rezoned 16 properties across the city,
including the mall parking lot properties.
Specifically, the amendments applied a combination of Regional Commercial (R), R-23
Residential (19-23 dwelling units per acre), and R-40 Residential (37.5-40 dwelling units per
acre) General Plan designations to the affected parcels, varying by parcel, to facilitate future
mixed-use, mixed-income development. This rezone would allow a minimum of 993 housing
units across the five parking lot parcels. As part of the rezone program, the City Council also
required that at least 40% of the units on the parking lot properties be dedicated for lower
income families.
SteelWave LLC request
Throughout the last 15 years, previous mall ownership groups have proposed various land
exchanges, ground leases or purchases of the parking lot properties to revitalize the shopping
center. None of those discussions resulted in an agreement.
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Timeline
•On Jan. 20, 2023, Brookfield Properties, the then-owner of The Shoppes at Carlsbad,
submitted a letter to the city requesting to negotiate the terms of either a lease or
purchase of the parking lot properties. The City Council approved Brookfield’s request.
•SteelWave LLC, acquired The Shoppes at Carlsbad from Brookfield Properties in 2025,
becoming the successors in interest to RPI Carlsbad LP, the company that had held the
title on the property for Brookfield Properties.
•On June 24, 2025, the City Council formally classified the parking lot properties as
exempt surplus land under the California Surplus Land Act, a state law that generally
requires agencies to offer surplus public land to affordable housing developers and
other priority buyers before selling or leasing it
•On May 27, 2026, SteelWave LLC submitted its own letter to the city requesting to
negotiate a lease or purchase of the parking lot properties (Exhibit 3).
As the successor in interest to RPI Carlsbad LP, SteelWave LLC is the party with the legal ability
to release the deed restrictions on the parking lots, making it the appropriate negotiating party
for the city.
Negotiating team
Staff recommend that the City Council identify the city staff who will be the project team and
the future negotiating agents responsible for exploring the sale or lease of the parking lot
properties and working with representatives for SteelWave LLC toward the lease or sale of the
properties.
Staff recommend a negotiation team composed of the City Attorney and/or designee(s), Deputy
City Manager, Community Services; Real Estate Manager, and the Community Development
Director.
Fiscal Analysis
There is no immediate fiscal impact to the city from this action. The potential outcomes of any
negotiations, and their potential fiscal impact, are currently unknown. The bonds the city used
to purchase the property have been paid off, so there are no longer any fiscal restrictions upon
the property.
Environmental Evaluation
This action of identifying the city’s project team and potential future negotiators does not
constitute a project within the meaning of the California Environmental Quality Act under
California Public Resources Code Section 21065 in that it has no potential to cause either a
direct physical change or a reasonably foreseeable indirect physical change in the environment.
Next Steps
Staff will begin working with SteelWave LLC on the terms of a potential lease or sale of the city-
owned parking lot properties and, when appropriate, meet with the City Council in closed
session to discuss price and terms consistent with California Government Code Section 54956.8.
Exhibits
1.City Council resolution
2.Parking lot properties history
3.SteelWave LLC letter, May 27, 2026
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Exhibit 1
RESOLUTION NO. 2026-111
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, IDENTIFYING THE CITY’S PROJECT TEAM AND
FUTURE NEGOTIATING AGENTS RESPONSIBLE FOR NEGOTIATING THE
SALE OR LEASE OF THE CITY-OWNED PARKING LOT PROPERTIES LOCATED
AT THE SHOPPES AT CARLSBAD WITH REPRESENTATIVES OF STEELWAVE
LLC, STEERPOINT CAPITAL AND CARLSBAD 2525 LLC
WHEREAS, the city-owned parking lot properties located at the Shoppes at Carlsbad are
comprised of 67.27 acres, with 56.97 acres located within the City of Carlsbad, and 10.3 acres located
within the City of Oceanside; and
WHEREAS, the city and Plaza Camino Real LP entered into a public parking lot operating
agreement in 1981 whereby Plaza Camino Real LP was required to operate and maintain the parking
lot properties; and
WHEREAS, the parking lot properties are currently being operated and maintained as a public
parking lot to serve The Shoppes at Carlsbad regional shopping center; and
WHEREAS, on Oct. 17, 2017, the City Council approved the Real Estate Strategic Plan, which
recommended that the city pursue the lease or sale of the parking lot properties; and
WHEREAS, on Jan. 20, 2023, Brookfield Properties, the then-owner of The Shoppes at Carlsbad,
submitted a letter to the city requesting to negotiate the terms of either a lease or purchase of the
parking lot properties; and on March 14, 2023, the City Council adopted Resolution No. 2023-081,
authorizing a project team and negotiating agents to explore potential uses of the parking lot
properties and to initiate compliance with the Surplus Land Act; and
WHEREAS, in August 2025, SteelWave LLC acquired The Shoppes at Carlsbad from Brookfield
Properties and thereby became the current owner of the shopping center and the successor in interest
to RPI Carlsbad LP / Brookfield Properties; and
WHEREAS, on March 13, 2025, the California Department of Housing and Community
Development (HCD) completed its review and determined that the parking lot properties qualify as
“exempt surplus land” under Government Code Section 54221, subdivision (f)(1)(J), on the basis that
June 9, 2026 Item #10 Page 4 of 9
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the deed restrictions constitute valid legal restrictions not imposed by the city that prohibit housing on
the site absent the consent of the deed restriction holder; and
WHEREAS, on June 24, 2025, the City Council adopted Resolution No. 2025-150, formally
declaring the parking lot properties as exempt surplus land under California Government Code Section
54221(f)(1)(J), consistent with the requirements of the Surplus Land Act; and
WHEREAS, because of the deed restrictions on the parking lot properties, the city may only
negotiate a lease or sale with the mall owner and the major tenants that own fee title to their stores,
or their respective successors in interest; SteelWave LLC, as the current owner and successor in interest
to RPI Carlsbad LP, is therefore the appropriate negotiating party; and
WHEREAS, on May 27, 2026, SteelWave LLC and Steerpoint Capital, as the current owners of
The Shoppes at Carlsbad and successors in interest to RPI Carlsbad LP, submitted a letter to the city
requesting to negotiate the terms of either a lease or purchase of the parking lot properties that
surround their shopping center; and
WHEREAS, the Surplus Land Act process has been completed; the parking lot properties have
been declared exempt surplus land; and the city is not required to provide Surplus Land Act notices
prior to negotiating a lease or sale of the properties; and
WHEREAS, California Government Code Section 54956.8 requires that a local agency hold an
open and public session in which it identifies its negotiators, the real property or properties which the
negotiations may concern, and the person or persons with whom its negotiators may negotiate; and
WHEREAS, staff recommend the City Council identify the city’s project team and future
negotiating agents responsible for negotiating a sale or lease of the city-owned parking lot properties
located at The Shoppes at Carlsbad with representatives for SteelWave LLC, Steerpoint Capital,
Carlsbad 2525 LLC, and any other interested property owners.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
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2.This action of identifying the city’s project team and potential future negotiators does not
constitute a project within the meaning of the California Environmental Quality Act under
California Public Resources Code Section 21065 in that it has no potential to cause either a
direct physical change or a reasonably foreseeable indirect physical change in the
environment.
3.That the City Attorney and/or designee(s); Deputy City Manager, Community Services; Real
Estate Manager; and Community Development Director, are designated as the project
team and future negotiating agents responsible for negotiating a sale or lease of the city-
owned parking lot properties located at The Shoppes at Carlsbad with representatives for
SteelWave LLC, Steerpoint Capital, Carlsbad 2525 LLC, and any other interested property
owners, subject to City Council approval of final terms.
4.That the City Manager is authorized to take all actions on behalf of the city necessary and
appropriate to carry out the purposes of this resolution, including the execution of
documents, subject to their approval as to form by the City Attorney.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the 9th day of June, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
______________________________________
KEITH BLACKBURN, Mayor
______________________________________
SHERRY FREISINGER, City Clerk
(SEAL)
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Parking Lot Properties History
Parking Lot Acquisition
The City of Carlsbad, under its responsibility as the Carlsbad Parking Authority, acquired the
parking lot properties from the developer, Plaza Camino Real LP, in two phases, the first in 1969,
when the first phase of mall was built; and the second between 1975 and 1981, when the center
was expanded to its current configuration.
•In Phase 1, the Parking Authority acquired about 30 acres on the east side of the mall and
south of Marron Road to financially assist Plaza Camino Real in developing the regional
shopping center within the city, and to operate as a public parking lot.
•During Phase 2, in 1975, the city entered into a lease agreement with an option to
purchase with the City of Oceanside for an additional 9.99 acres within the City of
Oceanside to expand the parking lot.
•In 1992, the city exercised its option to purchase the 9.99 acres from the City of Oceanside.
Of the 9.99 acres, only five acres is used as parking for the mall, with the remaining
acreage, located in the creek channel, left as open space.
•Between 1978 and 1979, the Parking Authority acquired an additional 3.26 acres south of
the mall.
•Then, in 1981, the Parking Authority acquired 23.7 acres on the west end of the mall within
the City of Carlsbad and an additional 0.31 acres within the City of Oceanside.
With these purchases, the City of Carlsbad and the Parking Authority owned the combined 67.27
acres surrounding the regional shopping center: 56.97 acres in the City of Carlsbad and 10.3 acres
in the City of Oceanside.
During Phase 2, the Parking Authority entered into a lease agreement with the city under which
the city would have control over the Parking Authority’s parking lot properties and repay the
bonds the Parking Authority used to acquire the properties. The city and the Parking Authority
subsequently entered into an agreement with Plaza Camino Real in 1981 that required Plaza
Camino Real to operate and maintain all 67.27 acres of the city’s parking lot properties. The
agreement also mandated that the properties could only be used for public parking for the
adjacent regional shopping center, and contained a reciprocal requirement that established that if
any uses other than public parking were desired, both parties would have to provide their
permission for the requested alternate use.
The city dissolved the Parking Authority (Resolution No. 96-294), leaving the city and Plaza Camino
Real as the sole parties to the agreement. Thereafter, in 1997, the Parking Authority transferred its
interest in a majority of the parking lot properties to the city.
Plaza Camino Real has since sold its interests in the mall to Westfield, LLC, who sold its interest to
RPI Carlsbad in 2015. Brookfield Properties owns RPI Carlsbad. In August 2025, SteelWave LLC
acquired The Shoppes at Carlsbad and became the current owners of the shopping center and the
successor in interest to RPI Carlsbad / Brookfield Properties.
Exhibit 2
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Parking Lot Properties History
The city-owned parking lot properties have been used as parking lots for the regional shopping
center since the city acquired them.
On March 14, 2023, the City Council adopted Resolution No. 2023-081, identifying the city's
project team and future negotiating agents in connection with a request from Brookfield
Properties to negotiate a lease or purchase of the parking lot properties. That resolution
authorized the City Attorney; Deputy City Manager, Community Services; Real Estate Manager;
Community Development Director; and outside counsel (Procopio, Cory, Hargreaves & Savitch LLP)
as the city's project team and negotiating agents and directed staff to initiate compliance with the
Surplus Land Act.
On June 9, 2023, Brookfield Properties (through RPI Carlsbad) submitted a letter to the City
Attorney clarifying its position that only the original parties to the deed restrictions (RPI Carlsbad
and certain major tenants holding fee title to their stores) have the legal authority to release the
use restrictions on the parking lots, and that RPI Carlsbad was unwilling to release those
restrictions unless the city negotiated a sale or lease directly with it.
Following adoption of Resolution No. 2023-081, staff pursued the Surplus Land Act exemption
process. City staff submitted an exemption request to the California Department of Housing and
Community Development (HCD) on May 13, 2024. On March 13, 2025, HCD concluded that the
parking lots qualify as "exempt surplus land" under Government Code Section 54221, subdivision
(f)(1)(J).
Thereafter, on June 24, 2025, the City Council formally adopted a resolution declaring the parking
lot properties as exempt surplus land, consistent with the Surplus Land Act. Brookfield Properties
did not ultimately complete a transaction with the city. SteelWave LLC subsequently acquired The
Shoppes at Carlsbad in August 2025 and submitted their own request to negotiate on May 27,
2026.
Parking Lot Deed Restriction
All of the grant deeds for the parking lot acquisition deeds contained a restrictive covenant under
which the land was to be dedicated perpetually to public use as a municipal parking lot.
Additionally, the grant deeds contained a reversionary interest clause that would automatically
and immediately revert the properties back to SteelWave LLC or its successors if the city did not
maintain the lots as a municipal parking lot. The reversionary interest was preserved by a recorded
notice and is enforceable through 2038; SteelWave LLC has the ability to record a further notice to
extend enforceability through 2068. In 1978, Plaza Camino Real LP and the city entered into a
parking easement agreement granting Plaza Camino Real LP and the shopping center's major
tenants easements for vehicle parking over the portions of the parking lots adjacent to those
major tenants' stores.
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3335 Susan Street, Costa Mesa, CA 92626 | PH 949-863-0390 | WEB SteelWaveLLC.com
May 27, 2026
Geoff Patnoe
City Manager
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Dear Mr. Patnoe,
On behalf of SteelWave LLC and Steerpoint Capital, I am pleased to share that we officially acquired The
Shoppes at Carlsbad. We are excited about the opportunity to reinvigorate the mall and restore it as a
premier destination for Carlsbad residents and visitors. We believe in the enduring role of retail as a catalyst
for community engagement and a cornerstone of local economic vitality.
The property is uniquely positioned; surrounded by approximately 60 acres of city owned parking lots. For
decades, multiple ownership groups have contemplated working with the City to develop the parking lots in
various capacities. With the City’s recent inclusion of the parking lots in its most recent Housing Needs
Assessment, there is now a clearer framework to guide future planning efforts.
As the new mall owners, we are eager to engage with you and your team to explore the potential acquisition
or ground lease of the parking areas. We see a meaningful opportunity to collaborate with the City and the
community to advance a shared version – one that thoughtfully integrates much needed housing while
unlocking the highest and best use of this land in a creative and impactful way.
We welcome the chance to begin discussions at your earliest convenience. We view initiating conversations
regarding the parking lots as a critical first step in the process. Please feel free to reach out anytime with
comments or questions. I look forward to working with the city on this transformative opportunity.
Sincerely,
Jonathan Hastanan
Managing Director, Acquisitions & Development
Steelwave LLC
Cc: Jeff Murphy, Assistant City Manager
Exhibit 3
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