Charlestowne Mall buyers may force decision on new taxes
City expects Charlestowne buyers to ask for help with revamp
The slow demise of Charlestowne Mall has been arguably the greatest source of frustration for St. Charles officials in recent years. Much of that consternation has centered on a series of unfulfilled promises, and potential, generated when a California-based investment group purchased the mall in 2010.
When the new owners didn't even show up for the grand reopening ceremony, it was a preview of a total lack of communication between mall ownership and city officials hoping the mall could become the economic driver they'd always dreamed for the city's east side. Now, new owners are on the verge of coming to town, and hopes may abound once again.
Mark Goodman, president of Chicago-based Mark Goodman & Associates, confirmed Wednesday his company and a group of investors are under contract to purchase the mall. The company's website displays a portfolio that shows a history of projects involving downtown Chicago office space, high-rise condominiums and a fitness center in Skokie. City documents show the group put down $500,000 of earnest money on Charlestowne Mall and might close on the property as soon as mid-September. That falls in line with Goodman's pledge to deliver a full presentation to the city on its plans for the mall property within the next 30 to 45 days.
Goodman said his group "absolutely" intends to keep the mall property as some form of a shopping center.
"That is my sense that people do want to see it be that," Goodman said. "It's like the adage, give the lady what she wants. Our goal is to provide something the community will be excited about again."
Goodman did not want to get too deeply into the specifics of his vision until the community presentation. However, city documents indicate Goodman's group met with Mayor Ray Rogina and several aldermen in May. At that time, he discussed a concept that involved building outlots on the site for additional stores and restaurants. The plan would also redo the existing food court. And, most significantly, the plan involves demolishing the former Sears space to create room for growth.
That vision fits in with a mall study city officials commissioned last year that said the available store space in the mall is too small by modern standards to attract new big-name tenants, such as Macy's or Bloomingdale's. The study suggested a similar demolition of the old Sears wing of the mall to draw a large tenant. However, the study also said that task would need financial assistance from the city. Goodman did not say if he would ask for such assistance, but city documents show officials fully expect such a request. The assistance may come in the form of a new business district on the east side of town. The district would be fueled by the creation of one or two new taxes (a new sales tax and hotel tax) that would be imposed only on properties within the business district. Those taxes would be capped at 1 percent and could be implemented and raised only a quarter point at a time. The city's study estimated the cost of redeveloping the mall site could reach $35 million depending on the plan.
Just because the business idea exists doesn't mean it will happen. There are already concerns about creating a new taxes.
Alderman Jim Martin told his colleagues at a recent city council retreat that he will oppose the creation of any new taxes. He wants city officials to poll the existing businesses in the potential new district to see what they would support.
Dennis Alf, the owner of St. Charles Toyota, has already told city officials he strongly opposes the business district and new taxes. Alf could not be immediately reached for comment, but city documents show Alf has suggested any money for the mall should come in the form of a sales-tax rebate on the mall's own profits while leaving other businesses untouched.
Aldermen also agreed at that retreat to table any talk of creating the business district for six months. That would keep the discussion dormant through the end of the year, which would also allow ongoing construction on East Main Street to finish.
Rogina said Friday he has "no desire to engage in any conversation on incentivization yet." He wants to see the full plan first.
"We've been down this road before with new owners," he said. "I have to be enthusiastic about that fact that somebody is in the process of purchasing the property, but let's see what comes next first. What comes next is their plan."
Rogina said the business district, tax increment financing and/or sales tax rebates will all be on the table if appropriate. He acknowledged the new taxes of a business district may be the hardest sell.
"I'll be honest with you," Rogina said. "There were a few merchants along East Main Street who did email me and some members of the city council suggesting their disdain for such a concept. However, that does not represent, necessarily, the entire group. So let's go one step at time. First this ownership group has to close on and actually buy the property."
• Opened: 1991
• Size: 850,000 square feet
• Key tenants: Carson Pirie Scott, Kohl's, JCPenney and Sears
• 2001: JCPenney closes and becomes Von Maur. Von Maur owns mall space it exists in.
• 2005: Mall falls into receivership and is owned by creditors who do little to attract and keep tenants.
• 2006: Rapid decline in number of tenants and profitability begins.
• 2010: Mall is purchased out of receivership by a California-based investment group for $12 million. Owners make promises of a new ice rink, a new Asian restaurant and several other stores that never materialize.
• 2011: Sears closes.
• 2012: Rumors circulate that the mall is for sale. Owners initially deny a search for buyers.
• A city-commissioned study confirms the mall is "dying." It projects a cost of $35 million to redevelop the site. Only 12 of 120 retail spaces are occupied.
• 2013: Chicago-based Mark Goodman & Associates enters into contract to purchase property for unknown amount.