In the world of brownfields, one man’s trash is another man’s development site.

Or at least that’s how it’s working out for Newport Beach retail developer Hopkins Real Estate Group and its capital partner LNR Property Corp. of Miami.

The duo plans to build a 1.23 million-square-foot outdoor retail complex with 1,550 apartments and condos, and 300 hotel rooms, all on a 168-acre site in a densely populated area of Carson.

The proposed Boulevards at South Bay mall sounds like it has all the elements it needs to be a success – except that 157 acres of the property is a closed landfill.

For nine years, starting in 1959, tons of trash were disposed of at the property, called the Cal Compact Landfill. That included 250,000 cubic yards of hazardous sludge that has left the site contaminated with poisons ranging from arsenic and DDT to industrial-grade solvents.

It’s been enough to scare off an assortment of developers, but that’s left an opportunity for LNR and Hopkins, which has developed and redeveloped major malls such as the South Bay Pavilion right in Carson.

“Over the last 30 years, the site has been looked at for development by most regional development companies, but because of the environmental nature of the site, it adds a lot of complexity and costs,” said Lang Cottrell, vice president of LNR. “That’s why you have 157 acres in L.A. that have not been developed.”

But it’s not as though other developers didn’t try. The site is centrally located at the corner of East Del Amo Boulevard and the San Diego (405) Freeway with easy freeway access.

In the early 1990s, developer Carson Realty Projects, a joint venture that included a union pension fund and real estate investment trust, bought the site and got entitlements for a large enclosed regional mall. But before the venture could get moving on the plans, the pension fund went bankrupt and the property was repossessed by the lender.

Hopkins and LNR saw an opportunity and bought the property from the lender in 2006 for $30 million and shortly thereafter received modified entitlements to allow for an outdoor mall. However, cleanup costs are pegged at $140 million. That’s a lot of money even for a financial partner as big as LNR, a commercial real estate financier backed by investors that include private-equity firms Oaktree Capital Management of downtown Los Angeles and Cerberus Capital Management of New York.

As a result, the project needed critical public financial assistance before the venture would move forward. That came in the form of $105 million from the Carson Community Redevelopment Agency, which itself had received money from the state Environmental Protection Agency to help pay for such cleanups. About $75 million will go toward cleanup and $20 million will finance a new freeway access ramp to the project.

Still, that means the venture will have to cough up some $65 million of its own money on remediation.

The cleanup plan, approved by the state Department of Toxic Substance Control, includes creating an impermeable landfill cap made of thick plastic and three to six feet of top soil. The cap will help to contain the materials and intercept any water or vapors from moving above or below. The plan also includes extraction wells for water, a venting system for vapors and a monitoring system that will screen for escaping contaminants for years.

Cleanup is expected to be completed late next year on the mall footprint, allowing construction to start immediately on the retail element. Meanwhile, cleanup on the hotel and residential sites will continue, with a 400-unit apartment complex slated next for construction.

Cottrell said the project has required lots of patience as it has slowly progressed over the years, and it still has years to go. The construction of the mall alone will take five or six years – two years longer than usual – since the foundations must be built on pilings driven through the compacted trash and deep into the Earth.

Then, the partners will proceed with the hotel and 1,150 condos only as the market permits. Cottrell said patience and some funding from public sources were critical for the project, which the partners are largely financing through equity.

“The very key to these types of project is a public-private partnership in the financing,” he said. “It’s a long-term commitment.”