Study says no chance of big box on Kirchoff Road

An ethnic or independent grocery would be a good “junior anchor” for the huge, and mostly vacant, Rolling Meadows Plaza on Kirchoff Road, according to a study commissioned by the city.

No single business can be expected to use more than 20,000- to 45,000-square feet of the 72,000-square-foot former Dominick's store, said the study, done by Goodman Williams Group of Chicago and Mallon and Associates of Wheaton. The 11-acre site has 132,000 square feet of retail space.

The study examined Kirchoff Road from the Plaza at Meadow Drive west almost to Route 53.

The increasing diversity of Rolling Meadows offers new opportunities to merchants, researchers say. The city's Hispanic population increased from 19 to 26 percent from 2000-2010, according to the U.S. Census, while the Asian population went up to 8 percent. The city's total population dropped by about 500 residents to 24,099, while the median income rose from $60,000 to $74,000.

The study's recommendations suggest other major users in the Plaza could be a hardware or home improvement store; lawn and garden or furniture shop; a fitness or health center.

If a major user could be found, smaller stores would follow, such as home decor and independent clothiers; cafes, ethnic restaurants, family sit-down restaurants and bars, researchers say.

“We think there's a market for certain types of retail,” said Linda Goodman, a principal with Goodman Williams, “but the current players need to get to the table. There's more activity than there was a couple of years ago on the commercial front.”

The study area stretches along Kirchoff from Rolling Meadows Plaza west to the Riverwalk, which is a mix of residential and some commercial property.

The city has been struggling to get the Plaza repopulated since the Dominick's closed in 2004. Right now AA to EE Shoes and a small office are the only tenants.

However, the maximum potential would be for about 75,000 square feet of commercial, the study authors say. They suggest demolishing the eastern end to make way for residential development, most likely townhouses and apartment-style buildings for empty nesters, seniors and young households.

The study reinforces what city officials have long known, said Mayor Ken Nelson.

“We will not get a big box,” he said, “we are trying for a lifestyle-type center. What they told us is no surprise.”

The city had a mixed-use project for the Plaza site ready to go, but it fell apart when the economy went into recession, said Nelson.

“We were within a couple documents' being signed when the market went south,” he said. “Nobody's building anything right now.”

Still, Nelson said, the city is beginning to see some interest in the Dominick's property.

Valerie Dehner, community development director, said a grocer has been looking at the property since last summer.

“They would probably be interested buying the entire site but using only part of the Dominick's store,” she added. “They would probably redevelop the site.”

It's difficult working with a property in foreclosure, and multiple parties are involved, she said.

“It's frustrating,” she acknowledged. “We are quite anxious, looking at how we can get this off dead center.”

Complicating matters, the tax increment financing district the city created in 1988 expires on April 12. That means the $750,000 expected to be in the TIF fund in 2012 would be distributed to area taxing bodies — District 15, the park district and others — rather than spent on the property.

Nelson would like to see the city get several months' extension on committing the funds.

This study, done with $27,500 in TIF funds, is not the first the city has commissioned for the area, but this one deals specifically what sort of businesses might fit and what area residents want, said Nelson.

Besides the TIF funds, the city can offer developers sales tax sharing or create special taxing areas, said Valerie Dehner, community development director. The city has commissioned a second report, not to exceed $7,500, for all applicable incentives.

Dehner said the state of the economy factored into the need for the Goodman study.

“I think one of the things that we wanted to learn in this real estate correction period is are we still looking at the same uses?” she said.

The city spent $3.2 million in TIF funds to improve the property in the late 1980s, and Dominick's was there until 2004.

The Plaza property is in receivership. Nelson said he, Dehner and Acting City Manager Barry Krumstok will meet with the receiver to find out whether people controlling it are interested in renting or selling the property.

Beside competition from Woodfield Shopping Center, downtown Arlington Heights and Rolling Meadows' own Golf and Algonquin roads, Kirchoff Road just does not have enough traffic, the Goodman study says.

It gets 12,900 vehicles a day, compared with 33,000 on Golf Road west of Algonquin and 20,900 on Northwest Highway west of Wilke Road.

Most national retailers want more than 20,000, Goodman said. Still, Kirchoff Road sites offer less expensive rent.

The city owns 1 acre of vacant land at Riverwalk on the south side of the street across from city hall. The authors suggest the city ask for proposals without specifying whether the housing should be age restricted or for rental or sale, although rental is likely to be more quickly successful.

While Kirchoff Road is attractive for housing, new home prices will be constrained by the number of condominiums priced below $200,000.

The city's Economic Development Commission did not react favorably to affordable, age-restricted housing in 2009.

The Rolling Meadows Shopping Center on the north side of the street, home to Jewel/Osco, is the bright spot in the downtown area. It is more than 90 percent leased and owners have spent millions on recent upgrades.

Nelson said there are still vacant outlot spaces, and Chase will build on one.

Public facilities — Kimball Hill Park, City Hall, Rolling Meadows Library, schools, churches and the post office — are important for bringing potential shoppers to the area, the Goodman study says. The report recommends more events in the area as well as additional physical and visual connections between the park and Kirchoff Road.

“It's important for the community,” said Nelson about redeveloping the Plaza. “It's a blight. We need to do something, but we can't wave a magic wand.”

Only five retail stores on Kirchoff Road

Notes from the study

• Downtown Rolling Meadows has only five retail stores: Jewel/Osco, Epco Paint, Dollar Tree, Hallmark, and AA-EE Shoes.

• Almost all of the nine restaurants on Kirchoff Road are fast food establishments.

• Personal service businesses and financial institutions are well represented on the corridor.

• 17 storefronts were vacant last year, mostly in Rolling Meadows Plaza.

• Rolling Meadows got just over $3 million in sales taxes in 2009, down 7 percent from 2006. That's a smaller drop than other suburbs have seen, but it doesn't include the loss of Sam's Club.

• There was no significant drop in sales taxes when the Dominick's closed in 2004, indicating shoppers shifted to other grocery stores in Rolling Meadows.

• Four multifamily developments on Kirchoff Road have 424 apartments.