Did the deal fall through or did Clemenza buy it?
Neither. Part II was made instead.
It was intended that the Corleones would sell the mall (and make a huge profit) and that would be the end of the story. The producer discovered that he could make a huge profit himself if he filmed a sequel (and I'm happy he did) but no thought was given the continuity issue of the mall (it really isn't an important issue IMO).
