Why building owner is marketing former Uncle Julio’s space for office use in Vernon Hills

Vernon Hills officials agree the northwest corner of Milwaukee Avenue and Route 60 near Hawthorn mall is a valuable location in the retail-heavy village, but are split on whether medical offices are a good use for the site.

Although a retail use for the space is preferred — and encouraged — by the village, building owner Elliot Bay Capital has been granted a conversion certificate for 850 Milwaukee Ave.

The conversion certificate allows Elliott Bay to convert and market the space once occupied by Uncle Julio's restaurant to office tenants.

Approved by a 4-3 vote, with Mayor Thom Koch breaking the tie, the decision illustrates the impact of the “Hawthorn 2.0” mall transformation project that continues to add residents to the area.

Supporters of the change contend there aren’t a lack of retail options in the area — the other three corners at Milwaukee Avenue and Route 60 are packed with commercial uses.

Because Hawthorn 2.0 is being advertised as an urban living environment, with residential buildings mixed with retail uses, services like urgent care and medical specialties nearby would be appealing, said village Trustee Nancy Forster.

“If that entire Hawthorn area wasn't what it is right now, I would have a different opinion,” she added.

Health care-related tenants already comprise 64% of the building space, with Northwestern Medicine accounting for about half the total. T-Mobile is the only retail user in the building.

Office-heavy uses predate a village rule enacted in 2010 requiring 80% of first floor uses in that zoning district be retail.

“We've been like this for years now so I would rather see activity on that corner than vacancies,” Forster said.

Trustee Michael Schenk and Craig Takaoka agreed.

“When that (building) was built there was no vision for Hawthorn mall at that point,” Schenk noted.

Opponents on the board argued it is a key location that should feature retail uses rather than medical offices.

But Elliot Bay contends the local restaurant market is becoming saturated. The goal is to transform the building into a “cohesive, dedicated health care service facility” and expand on the strength of Northwestern Medicine, according to the company.

Uncle Julio's opened in 2016 and closed in April. The restaurant had been a “persistent challenge” and “source of disruption for neighboring tenants,” such as odors, parking and noise, according to information presented by Elliot Bay.

“Attracting retail there is a challenge,” said CEO Christian Whipple, adding that the company has spent about $600,000 improving the building since Uncle Julio’s closed.

“I don’t think we’ve necessarily completely ruled out retail,” said Christina Conyers, Elliott’s director of real estate asset management. “I think the issue is restaurant (use).”

Village officials said there have been a handful of other conversion certificates in recent years but all had identified tenants when the request was made.