Why is Sunrise Mall redevelopment taking so long to start?

By Sara Beth Williams–
With businesses closing inside Sunrise Mall and rumors circulating online about the mall’s imminent demolition, many residents and business owners have voiced concerns regarding the 20-year redevelopment timeline proposed in the Sunrise Tomorrow Specific Plan.

Former Citrus Heights Mayor Jeannie Bruins, who was an integral part of both the city’s incorporation process and the development and adoption of the Sunrise Tomorrow Specific Plan, said in a recent interview that the city needs to find a “willing developer” who has a vision similar to the city’s.

“It’s looking at this long term, not short-term fixes that put money in the pocket of the developer,” Bruins said. “I’d like to remind citizens that it took 12 years to incorporate the city.”

Citrus Heights Economic Development and Engagement Director Meghan Huber said in a recent interview there is no fixed build-out schedule, but the city has “proactively advanced” entitlement approvals, infrastructure planning, and environmental clearance.

The Specific Plan includes an estimated $86 million infrastructure cost, which is a major hurdle to overcome in making the city’s plan become a reality. Huber said this will be approached in phases to align with development, with the city also “exploring financing tools” like Community Facilities Districts (Mello-Roos taxes) and Enhanced Infrastructure Financing Districts.

According to a city staff report published April 18, the city has acquired grant funding from the Sacramento Area Council of Governments to support infrastructure planning for the site, including $338,000 in Green Means Go funding and a $450,000 Reconnecting Communities Grant, which will be allocated toward frontage improvements along Sunrise Boulevard.

The pace of redevelopment has been shaped by several factors, Huber said, including economic trends and evolving market conditions, higher construction costs, interest rate volatility, and alignment challenges between developers and property owners.

“In response, the city has facilitated direct introductions between developers and ownership,” Huber said.

In addition, addressing assertions that the city’s Specific Plan is not economically viable, Huber said the plan was crafted with “direct input” from the development community and includes tools to support feasibility, such as streamlined environmental clearance, flexible land use allowances, and phasing in infrastructure.

Real estate investor Ethan Conrad has also questioned the amount of proposed office space, particularly as it relates to a post-COVID environment where remote work dramatically increased.

Huber noted the Specific Plan was developed during the pandemic and was “intentionally designed” with built-in flexibility to respond to future market shifting.

“Tools like the Exchange of Development Allowance allow developers to substitute uses—such as replacing office with housing or hotel—while remaining consistent with the plan’s environmental clearance and vision.”

The city has also noted on its Sunrise Tomorrow website and during a council meeting presentation that the amount of office space, units of housing, hotel rooms, and retail space proposed in the Sunrise Tomorrow Specific Plan reflect “maximum units permitted,” and that actual development at the site will vary.

During a presentation to the City Council on April 23, Community Development Director Casey Kempenaar reported that, based on data from an economic and market analysis study conducted on current market demand, there is still a demand for office space, especially medical office space.

Huber also discussed the importance of office space during a presentation to the City Council on April 9, following a trip to Belmar Mall in Lakewood, Colorado.

 “In this day and age post-COVID, offices can get a lot of skepticism, but the fact of the matter is offices are important to be able to program and produce daytime populations that will shop in businesses and that will create foot traffic,” Huber said.

Following the council’s April 23 decision to decline an amendment proposal to the Specific Plan, Senior Vice President and Director of Leasing and Sales with eXp Commercial Tony Wood, who is representing the sale of Sunrise Rollerland, said many interested buyers have expressed concern over the “lack of progress” of Sunrise Mall redevelopment. Wood added that many potential buyers were particularly concerned that a proposal with “committed national tenants” had been rejected.

“The dismissive tone and lack of professionalism displayed by some city officials during the council meeting was concerning. It sent a negative signal to serious developers considering Citrus Heights, and unfortunately undermines confidence in the city’s development vision,” Wood said.

Wood agrees that the property is the “single greatest redevelopment opportunity” in the city and could become a “vibrant hub” for retail, dining, housing, mixed-use and more, but Wood echoed Conrad, stating that the Sunrise Tomorrow Plan was a “billion-dollar vision” that is “out of sync” with market realities.

“In contrast, Ethan Conrad presented a viable, phased approach grounded in market demand, and had the tenant commitments to prove it. The city’s refusal to compromise or even engage meaningfully with his team has now led to the loss of a serious developer and tenant anchor,” Wood said.

Others, like Bill Van Duker, have argued that the city should wait for a developer “who will look to the highest and best use of this property, not developers who see the opportunity for a quick financial return and then leave town.”

What progress has been made so far?
According to the city, progress is being made toward supporting the build-out of the site, including the approval of Sunrise Montessori Preschool and an electric vehicle charging station, which are both under construction.

The city also approved a Tentative Parcel Map and development agreement in June 2024 to support the development of the Sunrise Tomorrow Hotel project, with “deal-making talks” involving potential hotel brands underway, according to Huber.

Following the trip to Lakewood, Colorado, Huber said that over time, the Belmar Shopping District created 2,500 jobs and brought in 110 new businesses, but it didn’t happen immediately.

“What we learned essentially is that this was a lot of really hard work of finding the right partner, building effective public-private partnerships, and starting to dig into projects and dealmaking. And that’s resulted in what Belmar is today,” Huber said.