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Article updated: 6/5/2013 5:28 PM

Vernon Hills OKs $13 million for mall expansion

Plans for a $50 million renovation and expansion at Westfield Hawthorn shopping center in Vernon Hills are proceeding.

Plans for a $50 million renovation and expansion at Westfield Hawthorn shopping center in Vernon Hills are proceeding.

 

Steve Lundy | Staff Photographer

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Details of a key incentive for a transformative $50 million makeover at the Westfield Hawthorn shopping center in Vernon Hills have been approved by village officials, paving the way for long-sought improvements.

Most of the other needed approvals for the project, which is expected to enhance the food and entertainment options and the appearance of the `70s-era center, have been in place. But the financial incentive, which the company says it needs to proceed, has been months in negotiations.

That ended Tuesday with the 5-0 village board approval of a 10-year agreement, with opportunities for extensions, that could amount to a sales tax rebate of nearly $13 million. Essentially, Westfield will receive $10 million in rebates over the life of the agreement, with an annual "developer interest rate" of 6 percent that will make the total payout $12.9 million. Sales tax from the mall's four main anchor stores would not be included because they are not owned by Westfield.

The village and Westfield expect the payout to occur in just over nine years but there are provisions for an automatic three-year extension. Two more years are possible, at village discretion, if the sales tax revenue generated by the additions doesn't meet expectations.

There was some debate on the terms of the extension and possible replacement stores if the two main new tenants planned as the backbone of the project close. However, an incentive package has always been envisioned as part of this plan for the 1.4 million-square foot mall at Milwaukee Avenue and Route 60.

A 1,200-seat, $6 million AMC theater to be built as a new entrance between Sears and JCPenney, with space for new restaurants below, is a centerpiece of the project. The new theater is expected to open in fall 2014. A Dave & Buster's arcade/restaurant, with as many as 200 electronic devices to be built in renovated space inside the mall, is the other key part of the plan. Westfield also envisions several other new users, but leases have not been signed and no names have surfaced.

Other elements of the plan include the renovation of the existing three mall entrances and upgraded lighting and signage. Building permits for the entrances are under review and work is expected to begin in about 45 days. The only outstanding issue is the size of two entry signs. Westfield wanted 48-foot signs with electronic display panels, but the village board had questions on the height and content of what will be displayed.

The village has been after Westfield to improve the aging mall for years as a $110 million proposal in 2005 to expand the mall didn't materialize.

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