Gurnee Mills celebrated 25 years of growth

Originally considered an outlet mall with cheaply priced goods and a silo signifying a rural area, Gurnee Mills has grown with the village it has helped to transform into a retail powerhouse.

Gone are dusty discounters such as Waccamaw Pottery and Filene's Basement.

They've been replaced by the likes of Bass Pro Shops Outdoor World and Macy's, major draws in the 1.9-million-square-foot mall with 200 stores that celebrates its 25th anniversary this morning.

Gurnee Economic Development Director Ellen Dean said she's confident the mall has what it takes to go another 25 years because of its willingness to change with the times, such as by shifting to a model that now mixes full-line, value and outlet stores with several dining and entertainment options. She said she wouldn't be so bullish on Gurnee Mills' future had it not veered from purely outlet offerings.

"It would have been a downward trajectory," Dean said. "And instead, they've infused life and new thinking and new concepts."

Still, the threat of online shopping and businesses preferring to run virtual stores means Gurnee Mills' future cannot be etched in stone, according to a Chicago-area retail analyst.

"The struggle malls face today is staying relevant," said David Aron, who analyzes the retail sector as a marketing professor for the Brennan School of Business at Dominican University in River Forest. "Retail is changing so fast, with online and brick-and-mortar transitions, that any long-term investment is risky and expensive. Add to that how expensive mall space can be, especially compared to online and pop-up options."

Business evolution

Gurnee Mills, off the Tri-State Tollway and Grand Avenue, made a huge splash when it opened Aug. 8, 1991. With the big silo reflecting Gurnee's rural feel and serving as a beacon for tollway travelers, it was billed as the country's largest off-price outlet mall.

Waccamaw Pottery, Filene's Basement and Phar-Mor were big names and part of a mix of about 200 stores that covered 1.7 million square feet when Gurnee Mills debuted. Those stores attracted tour buses in the early days - roughly 3,000 buses dropped off shoppers in 1995, reflecting how about 60 percent of visitors at the time came from beyond a 40-mile radius.

But today's silver anniversary celebration at 9 a.m. outside Entry B will happen without the silo, the scores of out-of-town tour buses and the exclusive reliance on outlet stores. The mall that has drawn an estimated 500 million visitors has evolved in an effort to stay competitive. That evolution has included the addition of the full-line Macy's in 2013 and popular restaurants Portillo's and Buffalo Wild Wings in 2015, in stand-alone buildings just outside the main mall.

Industry trends and consumer demand led original owner Mills Corp. to start tweaking the mall as far back as 2002, when a Spiegel Outlet Store was torn down to make way for a regular Kohl's. The early 2000s also saw the mall add more food and drink options, a refreshed decor and trendier stores, including outlets for Abercrombie & Fitch and Hollister Co.

The silo's removal five or so years ago - part of $4.8 million in renovations that erased the agricultural theme at entrances - was symbolic of a community that grew with the changing mall.

"I think when the mall was originally built, the architecture certainly was to sort of reflect the homeland and the farmland and that type of community," said Gurnee Mills director of marketing and business development Elizabeth Striegel.

Striegel said the growth of Gurnee and other Lake County towns, coupled with similar big malls that popped up over time, also signaled a change in the distance customers were traveling to shop. Today, there is competition from the 3-year-old Fashion Outlets of Chicago in Rosemont and Chicago Premium Outlets in Aurora, which opened in 2005, among others.

As a result, just a smattering of tour buses now bring in customers because most of Gurnee Mills' business comes from a roughly 15-mile radius, not the 40 miles in the early years, according to an independent study commissioned a few months ago by mall owner Simon Property Group.

"Originally when Gurnee Mills opened, it really was a destination," Striegel said. "It really was a tourism center. There were no other malls like it of its kind in the Chicagoland area. It became a destination."

Protecting tax base

Gurnee's population has doubled to about 30,000 since the mall opened in 1991. In that time, Gurnee Mills is credited with being the magnet that attracted automobile dealerships, restaurants, supermarkets and more for what became the bustling Grand Avenue-Hunt Club Road retail corridor.

In part due to the mall, Gurnee dropped its property tax and created a local sales tax in 2000, a move officials said was meant to benefit village residents.

Roughly 65 percent of the village's $38.3 million in projected general fund revenue will come from the 1 percent sales tax, according to Gurnee's 2016-17 budget.

Dominican University's Aron said there will be challenges for Gurnee's prime economic engine to continue to lure shoppers. For example, some malls and retailers now have to spend so much more on price promotion, there's not always enough leftover dollars to create a pleasant atmosphere in the buildings.

However, he said, foot traffic is the goal of malls, and some are gaining tenants, such as medical offices, that better accommodate day-to-day living. A Floor and Decor discounter specializing in tile, wood and stone is expected to open at Gurnee Mills by year's end.

"Visiting a mall is seen as more work now, and the payoff, in terms of selection and variety and even luxury, is less than it was during the heyday of the shopping mall," Aron said.

Gurnee Mayor Kristina Kovarik said officials realize the importance of the mall to village finances, which is why they stay in close contact with Simon Property Group executives regarding possible opportunities or concerns. She said an example of the cooperation can be seen in an online survey the village and Simon launched last week to learn the shopping habits of Gurnee residents.

"This survey is going to help us find out - to make sure we're viable for the next 25 years - what does our community want in Gurnee Mills. What do they want to see? What will bring them in? And that's where we'll focus our energy."