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updated: 4/20/2012 7:05 PM

Westfield wants $7.5M in breaks from Vernon Hills for mall expansion

Vernon Hills hires expert to evaluate offer

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  • A fitness center is one of the possible new elements of a proposed expansion and renovation at Westfield Hawthorn mall in Vernon Hills.

      A fitness center is one of the possible new elements of a proposed expansion and renovation at Westfield Hawthorn mall in Vernon Hills.
    Courtesy of the Village of Vernon Hills

 
 

Deflated more than once by fizzled plans to improve Westfield Hawthorn mall, Vernon Hills officials remain wary of a new proposal to upgrade and add zip to the village's signature commercial resident.


But they also are impatient and excited to see Westfield LLC invest in what is regarded as the economic centerpiece of the village. Because of its extensive retail base, Vernon Hills is a perennial sales tax leader in Lake County and doesn't levy a municipal property tax.

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"Let's get this thing going -- it's only been nine years," Mayor Roger Byrne said this week after an overview of the $40 million to $50 million plan designed to revitalize the shopping center and expand its trade area with new offerings.

And as it has since 2003 when it first approached Westfield about expanding, the village is willing to help financially.

"We'll probably all come out ahead. We definitely wouldn't lose anything," Trustee Thom Koch said. "Anything to improve that place is a serious plus."

The company wants village help to invigorate the center with new elements to draw shoppers, such as a fitness center, cinema and restaurants.

The initial request is for $7.5 million in sales and entertainment tax rebates over 20 years. While the village has used similar types of incentives in recent years to fill vacant big boxes, arriving at a fair package in this case provides a logistical challenge that will require outside help.

As the village reviews technical aspects of the proposal, such as engineering plans, dimensions and designs of buildings, GMX Real Estate Group LLC of Northbrook will work on details of an incentive package. The village board authorized a contract with GMX for $250 an hour not to exceed $20,000.

"We have multiple businesses that are going to be affected. We want GMX's expertise to validate the assumptions and projections Westfield is putting forth," explained John Kalmar, assistant to the village manager. Hawthorn covers about 1.3 million square feet with 167 stores.

One key aspect will be a so-called "gap" analysis, he said.

"It's the difference between what the mall feels it can pay for the project and what it actually costs. What they're asking us to do is pay for the gap," Kalmar said.

Westfield, one of the largest retail property groups in the world, this week announced it is selling eight U.S. shopping centers, including Chicago Ridge and Louis Joliet malls in the Chicago area, for more than $1.1 billion.

The proceeds will be used to pay down debt and for improvements at other properties, the company said. Vernon Hills officials are optimistic.

"We feel they're finally going to move forward with this," Kalmar said.

The Hawthorn proposal includes a new entrance between Sears and JCPenney to house new restaurants beneath a 12-screen theater above.

The three other mall entrances would be upgraded and adjacent spaces filled with restaurants and other uses, possibly to include a fitness center.

The idea is to enhance the shopping center with "new, inviting improvements and incentivizing customers to stay longer," and visit more often, according to the proposal.

Hawthorn: Westfield looking to sell eight malls across the U.S.

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