Furniture store, Vernon Hills may make a deal

When Vernon Hills Mayor Roger Byrne heard a Wisconsin company was considering the village for its introduction to Illinois, he decided to get a firsthand look.

“I got a phone call these people were interested and had done some research,” Byrne said. “It gave us high marks for a desirable location.”

The jaunt north on I-94 took Byrne to Waukesha and the 420,000-square-foot corporate center, warehouse and store for Steinhafels Inc., which describes itself as Wisconsin's largest furniture and mattress retailer.

Greeting him was company President Gary Steinhafel and other family members, a banker and design contractor, Byrne recalled.

“You aren't dealing with corporate America,” Byrne said. “It was just good chemistry from the start.”

Months later, Steinhafels is eager to finalize a deal to buy the long-vacant EXPO Design Center and invest up to $6 million to transform the building into a furniture superstore. Inventory and equipment could add another $3 million to the project.

This past week, Gary Steinhafel returned Byrne's favor, motoring to Vernon Hills to present his idea and rationale to the village board.

“We want our buildings to reflect almost a homelike appearance. We want a consumer who does not know our name to look at our place and say, ‘That's interesting, I'd like to shop there,' ” he said.

At the root is a third-generation family orientation and culture that drives decisions, including the selection of Vernon Hills as its first renovation of an existing building.

Despite the demise of other furniture multichain retailers in town, such as Wickes and Plunkett, Steinhafel believes Lake County consumers were being underserved.

“It's a destination,” Steinhafel said of the proposed Vernon Hills store. “Our goal is not to be cannibalistic but complementary.”

Can that work? The chain has locations in Milwaukee, Madison, Kenosha and Waukesha and Menomonee Falls.

“They've had some exposure, so people know who they are,” said John Melaniphy, president of Melaniphy & Associates in Chicago, which has studied the retail climate for the village in the past.

“People travel further to buy furniture,” he said, adding it might take two or three trips to make a decision. “This market segment, I think for them, fits.”

Melaniphy said Vernon Hills has been a good furniture market, despite the comings and goings of some businesses. He attributed those moves more to company decisions than location.

Steinhafel told the village board the store would create 100 new jobs and have sales of up to $30 million the first year. To make it work, the company is asking for a sales tax rebate of about $729,000.

“We currently have no debt. That will change,” he told the board. “For every dollar you give us, we're investing that and much more. Ultimately what you give you get. It's a unique opportunity a round peg in a round hole.”

The company hopes to close on the building by Jan. 1 and plan an aggressive renovation schedule to open by Labor Day.

Trustees appeared amenable to the deal, as well as the aesthetic changes that will come to a prominent building that has been vacant 18 months.

“I think it's palatable,” Byrne said, adding the village would rather not offer incentives but it has become necessary because of the economy.

“We're lucky we have buildings people can move into. We have to protect our retail core,” he said.

Vernon Hills, which has an extensive retail base, had resisted such incentives. If approved, Steinhafels will be the fifth deal to be inked in the past year. Only that for Mariano's grocery store, which is under construction, is for a new building.

“They fought it for a long time. That's what you've got to do today,” Melaniphy said. “Vernon Hills is doing a good job of filling their spaces.”

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