Tales of retail demise are exaggerated, and that's good for Vernon Hills, consultant says

The predicted demise of brick and mortar stores has been exaggerated, and that bodes well for the continued strength of retail sales in Vernon Hills, according to a study commissioned for the village.

Retail consultant John Melaniphy of Melaniphy & Associates said Vernon Hills had more than $1.5 billion in retail sales last year, and he predicted its dominance as a regional marketplace should continue. Sales in the Chicago area increased 3.5 percent in last year over the previous year, he added.

Thousands of stores have closed nationally and the market is in the midst of unprecedented changes, Melaniphy acknowledged, but sales figures don't support the contention retail is dying.

That confidence is based largely on a massive planned redevelopment of the 1970s-era Hawthorn Mall to include entertainment, homes and new retail offerings that are resistant to e-commerce, he said.

“The mall redevelopment is key,” Melaniphy said. “We really have to give them a reason to travel to the mall. It's going to take a more comprehensive approach.”

Melaniphy has done similar studies for Vernon Hills over the years, and knowing the mall plan was in the works, he again was commissioned. He has presented draft findings to the village board and a final version is expected to be posted soon on the village website.

Melaniphy's last study for Vernon Hills was in 2009 during unprecedented economic times after the Great Recession. Dozens of national retail bankruptcies were occurring and vacancies in Vernon Hills mounting.

At the time, Melaniphy suggested potential replacements such as Mariano's, Aldi and Whole Foods, as well as Steinhafel's furniture, Maggiano's Little Italy restaurant and Dick's Sporting Goods and REI, among others, which since have opened in town.

To keep the big boxes filled and new business interested, the village for the first time began offering economic incentives for big projects. Among them was $13 million in sales tax rebates toward a $50 million renovation of Hawthorn Mall completed in 2015 that brought AMC Hawthorn 12 theaters, Dave & Buster's arcade and others.

Dallas-based Centennial Real Estate bought the mall property in late 2015 and later acquired the vacant Sears and Carson's anchor spots.

At 1.4 million square feet, Hawthorn remains the “crown jewel” and foundation of the village's retail base, Melaniphy said. However, the landscape has changed and malls are adjusting to become more like town centers.

While sales of general merchandise have declined in Vernon Hills, there still is a market for more stores in the eating and drinking category, and specialty retail and grocers, he said. Excess parking can be converted to more productive uses, he said.

“It's going to require a much more intense redevelopment,” Melaniphy said.

“What mall developers are trying to do today is bring in more entertainment and more experiential retail that people are going to want to get off their couch come out and shop and spend some time with things they can't get on the internet,” he said.

Specific potential tenants have not been discussed by Centennial but the Crayola Experience and Legoland Discovery Center and a children's museum are among the ideas suggested by posters on a community Facebook page.

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