Is revamp in store for Charlestowne?

A "potentially major reconfiguration" of Charlestowne Mall's physical layout is in the works as part of a plan to get the struggling St. Charles shopping center back on its feet, the Daily Herald has learned.

No formal redevelopment plan has been submitted to city hall, but city officials and the mall's latest management team confirmed they are in preliminary talks about repositioning the 850,000-square-foot structure.

The discussion appears to center on whether the mall would be more lucrative as an open-air facility reminiscent of so-called "lifestyle centers" such as Geneva Commons, whose success is widely blamed for Charlestowne Mall's decline.

"The direction we've been given is it would remain a predominantly retail property," St. Charles Mayor Don DeWitte said of information he received from McKinley, the mall's Michigan-based manager.

"Whether it would remain in the same interior mall configuration is one of the redevelopment issues," he said. "They are looking at some potentially major reconfigurations of the existing structure."

Royal Caswell, McKinley's executive vice president of commercial operations, said any change would be subject to a lengthy city review process and in accordance with existing tenant leases. He would not elaborate on redevelopment plans, other than to confirm talks of repositioning the mall.

"There's no way I can reveal what we're looking at doing," he said. "We don't have any plans to put out in front of the city yet for approval."

According to DeWitte, city officials would not OK redevelopment until the mall settles outstanding ownership issues.

The mall was built in 1992. A loan company took control of it from Wilmorite Inc. last year amid financial troubles.

The overall occupancy rate isn't that bad due to the dominance of six large anchors: Carson Pirie Scott, Classic Cinemas, Kohl's, Sears, Toys "R" Us and Von Maur. But many smaller stores remain unoccupied.

Randhurst Shopping Center in Mount Prospect, which has faced similar challenges with its smaller tenants, has announced plans to convert to a lifestyle center by gutting the 80-store center area of the mall, replacing it with open-air retail and apartments.

DeWitte said McKinley, which was hired this year by the loan company to manage the site, is trying to strike a deal with an unnamed investor to take on the redevelopment as a joint venture. The mayor said he expects an announcement in mid-2008.

"There are very positive signs," he said, adding "I'm very anxious."

While the city is optimistic about McKinley's efforts, some of the firm's practices rubbed tenants the wrong way.

The firm admits it hasn't actively recruited new tenants and said it changed the way it charges rent for "a substantial amount of tenants," from a gross-sales calculation to a fixed rate.

The switch in rent was one reason Ginger Lewis packed up her gift shop, Ginger's, after five years in the mall and relocated near a Starbucks on West Main Street this year.

"It's almost like they want everybody out," she said. "It was either move or go out of business."

Bill Becker, owner of sports memorabilia store Wall of Fame, was complimentary of McKinley's initial interaction with tenants.

But he said he's disappointed the firm hasn't secured more new tenants, including one to replace the mall's shuttered coffee shop.

"A mall shouldn't be without a coffee shop," said Becker, whose lease expires early next year.

Instead of recruiting tenants, Caswell said, McKinley has been trying "to get a handle on operating the mall" and has been focusing on utility cost-saving measures expected to net $750,000 a year to reinvest in the center.

"We're going to start doing that," he said of recruiting. "We haven't started it yet. It wasn't our first concern."

Still, occupancy has risen a bit since McKinley took over, largely because of temporary shops open only for the holidays, he said. Currently, 84 percent of the square footage of the mall is occupied, up from 82 percent in August.

For Randy Pollack, general manager of Classic Cinemas, there's never been much of a problem attracting customers. In fact, Pollack said his company recently invested hundreds of thousands of dollars in two high-tech 3-D projectors, which are already proving popular.

"Fortunately for us, business has gone up since we've been here," Pollack said of the theater, which opened in 2001 and is under contract until 2021. "Obviously, we have a different clientele and different reasons why they come here. But we try to market with other stores, to look out for each other."

In a positive sign for the future, Carson Pirie Scott recently agreed to extend its lease, which was set to expire in 2008, for another eight years. That's a sure sign of the mall's viability, Caswell said.

He also offered some reassurance to independent store owners who might worry about their place in the mall's future: There is no plan to abandon them.

"We don't know where this redevelopment is going to take us," he said. "But you can't just have national retailers; it doesn't work that way."