The problem with Charlestowne Mall in St. Charles is that it isn't the right size, a representative of a potential buyer told aldermen Monday.
But unlike the conventional opinions that it was built too small, Krausz Group thinks it is too big.
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Ÿ Opened: 1991
Ÿ Size: 850,000 square feet
Ÿ Key tenants: Carson Pirie Scott, Kohl's, JCPenney and Sears
Ÿ 2001: JCPenney closes and becomes Von Maur. Von Maur owns mall space it exists in.
Ÿ 2005: Mall falls into receivership and is owned by creditors who do little to attract and keep tenants.
Ÿ 2006: Rapid decline in number of tenants and profitability begins.
Ÿ 2010: Mall is purchased out of receivership by a California-based investment group for $12 million. Owners make promises of a new ice rink, a new Asian restaurant and several other stores that never materialize.
Ÿ 2011: Sears closes
Ÿ 2012: Rumors circulate that the mall is for sale. Owners initially deny a search for buyers.
Ÿ A city-commissioned study confirms the mall is "dying." It projects a cost of $35 million to redevelop the site. Only 12 of 120 retail spaces are occupied.
Ÿ 2013: Chicago-based Mark Goodman & Associates enters into contract to purchase property for unknown amount.
SOURCE: News reports
To fix it, The Krausz Cos. proposes to lop off the empty Sears building and a bit of the mall on the west, and to get rid of the food-court wing.
That includes getting rid of the mall's beloved double-deck carousel -- an idea that drew gasps from the audience.
"It is unusual to downsize, but what is important in a such a retail project is that it be the right size," said Charles May, project director. "This could have been a successful mall if it had been built later and smaller."
Where the Sears is, the company would put a more noticeable entrance for the Classic Cinemas movie theaters, showcasing the 18-screen complex as an anchor tenant. Other entertainment businesses and restaurants could be featured there.
The food court would be moved near the mall entrance by Carson Pirie Scott, and perhaps include an outdoor patio over the entrance.
Several stores and restaurants would be built on outlots close to Main Street, and there would be landscaping and grading changes to improve the visibility of the mall from Main, May said.
Formal plans will be brought to the plan commission in October. The firm hopes to close on the sale in November and start construction next spring,
The plan received a favorable response, although several people said they wondered about downsizing.
"I was concerned for quite some time that our mall would be bought by somebody, that it would be demolished and turned in to mixed-use and lots of residential out there, and I'm pleased that your group has decided to retain the full retail commercial aspect of it," said Alderman Jim Martin.
Asked by an audience member if the firm would try to add another anchor, May said that was investigated. It was doubtful it could land one any sooner than five to 10 years from now, he said. "This needs action now."
May said the mall was built too big from the start in 1991, by a firm that did not understand Chicago market conditions. In its best days in the 1990s, it was only 70 percent leased, he said.
The mall had small versions of anchor stores, until Carson Pirie Scott enlarged its store. Von Maur also enlarged its space when it took over a spot left by JCPenney.
Sears shut in 2011. The other anchor is Kohl's.
A 2012 study commissioned by the city blamed the mall's decline on being too big for the market area, and on poor management. The mall has changed hands several times and once went in to foreclosure. Tenants complained of not being able to reach managers, including to negotiate new leases.
The current owners bought the place in 2010 and talked of building an ice-skating rink in it and installing a sushi bar. The food court now only has three vendors, and counting the anchors, there are 11 stores and vendors, according to the mall's website. It had as many as 120 spaces, according to the 2012 study.
Executive Vice President David Pyle praised the building's condition, including the natural light.
Alderman Jo Krieger asked if the current anchors would be able to stay open during the renovation.
Yes, Pyle said. While exterior work may be major, he noted a grim fact that elicited knowing chuckles from the crowd.
"We don't have any tenants in the mall, so it is easier to do a (interior) remodel."