Mall expansion deal could mean demise of Rosemont Theatre
Rosemont officials Wednesday inked a deal with the owner of the Fashion Outlets of Chicago for a potential mall expansion that could mean demolition of the nearby Rosemont Theatre.
The real estate purchase contract and development agreement, approved by the village board Wednesday, comes three years after a possible expansion was first suggested by Art Coppola, CEO of mall owner Macerich, in a quarterly earnings call with Wall Street analysts.
But Mayor Brad Stephens on Wednesday said the mall expansion is anything but a done deal, characterizing the agreement as a letter of intent that allows the Santa Monica, California-based mall owner to go out and market the property and gauge potential retailers' interest.
"A lot of things have to happen before a shovel goes in the ground," Stephens said.
Preliminary plans call for a 225,000-square-foot expansion of the existing two-story, 538,000-square-foot indoor mall at Balmoral Avenue and the Tri-State Tollway. The village would build and pay for a parking garage and give Macerich the land to the east of the existing mall - currently the site of the village-owned theater and surface parking lots.
The deal gives Macerich five years to decide to expand or not; if there's no demand in the market, the property stays with the village.
If and when Macerich does want to expand, construction could not begin for at least a year due to show bookings at the theater, the agreement says.
For now, theater operations are status quo and bookings for future shows will continue, Stephens said.
He's willing to make the deal with Macerich because of the sales and property tax revenues the mall has provided village coffers since opening in 2013.
Fashion Outlets accounted for more than half the $16 million in sales tax revenues the village received last year, officials said.
The mall generated $810 in sales per square foot as of March, up from $771 the year before, according to the company's most recent filing with the Securities and Exchange Commission.
"Based on the economics, a good year at the theater would be a mediocre year at the mall," the mayor said.
If the 23-year-old, 4,200-seat theater does face the wrecking ball, Stephens said a smaller venue could be built in another part of town, or a new one may not be built at all.
A Macerich spokesman Wednesday didn't respond to a request for comment.