Wednesday, November 9, 2011 – 09:30 a.m.

In February 2011, the City of San Bernardino celebrated it’s foreclosure and taxpayer ownership of the mostly-empty Carousel Mall.

Now, just nine months later, sources report the city’s Economic Development Agency (EDA) is struggling to manage $16.5 million it borrowed on a “line of credit” through Citizens Business Bank.

Money borrowed to acquire the mall note from Center Bank and foreclose on the mall owner.

The EDA, needing to pay off the current note, attempted to convert to a standard real estate loan. However any loan would be considered non-performing due to the fact the mall doesn’t generate any income needed to pay the loan payments.

Thus the idea isn’t feasible.

Between its EDA and Redevelopment Agency (RDA), the city has pretty much tapped out its financing and has encumbered or mortgaged most, if not all, city-owned property.

Sources also tell InlandPolitics that the situation is serious and that the EDA is looking at alternatives.

All of this doesn’t even include the fact the city is involved in litigation with the mall’s previous owner.

It should be noted that the EDA and RDA utilize the same legal counsel as the San Bernardino International Airport Authority (SBIAA) and Inland Valley Development Agency (IVDA).

The law firm being Lewis Brisbois Bisgaard and Smith.

The U.S. Department of Justice is currently investigating activities at the airport, which is located with the IVDA project area.

The IVDA is also the sole funding source for the airport.

There’s definitely a fire burning here that may also attract the attention of federal agencies, who at last count, are involved in at least five active investigations within the county.