State of Suburbs: Shoppers demand updated malls
While brick-and-mortar retailers have been concerned about the surge in online shopping, many now are moving into renovated and expanded shopping malls.
Regional malls across the suburbs are seeing a renaissance.
Spring Hill Mall in West Dundee and Carpentersville, The Quad in St. Charles, Westfield Hawthorn Mall in Vernon Hills, Randhurst Village in Mount Prospect and Woodfield Mall in Schaumburg are among those undergoing changes to meet shoppers' expectations, experts said.
The mall projects have one of two purposes -- to attract higher-end merchants or to provide more activities to complement shopping, said Naperville resident David Aron, marketing professor at the Brennan School of Business at Dominican University in River Forest.
"Now, window shopping is an online experience, price comparison is an online experience, and so much shopping is done online that the malls we grew up with are just no longer sustainable," Aron said. "The high-end stores are the tenants desired by mall developers. Low-end stores are harder pressed to generate the volume they need to survive, let alone pay the rent, in a shopping mall environment."
While some iconic malls are undergoing multimillion-dollar facelifts, others are being reviewed after suffering the loss of tenants and shoppers, including the Huntley Outlet Center.
Despite some economic woes, shoppers demand more options, experts said, and the numbers show it.
The number of shopping malls actually has increased nationwide and in Illinois, according to data gathered by New York-based International Council of Shopping Centers Inc. and Chicago-based CoStar Realty Information Inc.
Nationwide, there were 114,957 shopping centers in 2014, up from 114,711 in 2013. Illinois had 4,499 in 2014, compared to 4,489 in 2013.
In 2014, the council issued a report that said the industry remains "successful, vibrant and vital to commerce now and well into the future."
Consumers expressed desires for one-stop shopping trips, being able to "touch and feel" merchandise and buying things immediately, the report said.
Despite the challenges, bricks-and-mortar malls can continue to have a place in the market, said Phyllis Ezop, president of Ezop And Associates, a consulting firm in LaGrange Park.
"There is still a sizable pool of consumers nearby that can be attracted to the mall," Ezop said. "But malls can't sit still during these times of change. Malls must adapt to changing conditions in their markets. As a result, malls are investing in renovations and expansion efforts."
One of the nation's premier shopping malls and a tourist destination, Woodfield Mall is undergoing a $13.9 million renovation, transforming from the 1970s to 2015, General Manager David Gott said.
The reconstruction will provide better seating and access for those with special needs, offer more room for events in some areas, replace two elevators and add a third one, and update the escalators by November. New flooring and carpeting may be complete around October, Gott said.
"We're making a great mall even better," Gott said.
Gott said Woodfield stores' revenues have been good. But new mall owner Simon Property Group wanted to improve the look and provide consumers what they want, he said.
Modernization was an important factor, Gott said.
"With an asset like Woodfield, there are many layers in it and we had to digest what we had before planning what to do with it," he said.
The revitalization of Charlestowne Mall into The Quad has been a long journey for developers and St. Charles officials. The developers aim to announce new tenants by Labor Day so the mall can open in 2017, said Daniel Krausz, principal with The Krausz Companies, based in San Francisco.
"The area has a strong demographic and a lot of shoppers drive by here every day," Krausz said. "We feel this market is underserved."
The enclosed mall was bought reportedly for about $9.5 million in 2013 and broke ground last year on the projected $80 million in renovations. Some renovations include giving it a "gathering place" or town square feel, Krausz said.
He also plans to add higher-end and mid-end restaurants and retailers.
"The consumers are looking for more options for a Friday night instead of driving to Oak Brook or somewhere else," he said.
But Charlestowne had been floundering for so long, it has been more difficult to transform it into the Quad rather than starting from scratch, he said.
"If this was a new project, this would be an easy sell based on the demographics and demand here," he said. "But this mall has had a long history of decline and hasn't had new tenants in a while. That has made things more difficult for us."
Spring Hill Mall
The $37.7 million renovation plan at Spring Hill Mall includes an eight-screen, 37,000-square-foot Cinemark movie theater expected to open in spring 2017, mall owner Rouse Properties said.
Texas-based Cinemark Holdings Inc. will provide digital projection, surround sound and reclining leather seats. The theater will open up to a pavilion that also will have destination shopping, restaurants and an outdoor plaza, Rouse said.
The redevelopment will turn 25,000 square feet of current enclosed mall space into outward-facing retail space. The redevelopment is set to begin later this year.
The changes would allow for one-stop shopping, Rouse Properties President and CEO Andrew Silberfein said.
"We believe applying our highly productive redevelopment formula at Spring Hill will serve as a catalyst for attracting new-to-market, high-profile brands and will further strengthen its dominant position in the market," Silberfein said.
Most of Spring Hill Mall is in West Dundee, but parts extend into Carpentersville. Rouse has been in talks with both villages regarding the redevelopment plans.
"The village is very excited to be working with Rouse in terms of this significant reinvestment in Spring Hill Mall," West Dundee Village Manager Joe Cavallaro said in June. "We hope that it is a first step in putting the mall back as a major commercial development."
Westfield Hawthorn Mall
A $50 million renovation at Westfield Hawthorn includes a 1,200-seat AMC theater, a major part of the project that began in 2013.
The expansion also involves three mall entrances and a fourth for the AMC, new restaurants including Smashburger and Maggiano's Little Italy, a revamped food court, a Dave & Buster's and other features.
Westfield aims to rebrand the 1970s-era mall as a dining-and-entertainment destination that features shopping at major retailers.
Tarrytown, N.Y.-based DLC Management Corp. acquired Mount Prospect-based Randhurst Village in June, aiming to expand and revitalize the center with more retail, dining and entertainment options.
DLC likely will need some time to evaluate what sort of upgrades it would do. This could be the mall's second major renovation in about three years.
The legendary shopping mall underwent a $200 million renovation in 2012 to boost consumer interest. But then it was put up for sale.
Randhurst will become one of the largest development projects for DLC, which also has worked with Wing Park Shopping Center in Elgin, The Oaks of Oak Brook, and others.
The mall is 92 percent leased. It features a Carson Pirie Scott, Bed Bath & Beyond, TJ Maxx, Sports Authority and several more stores, restaurants and bank branches. The property includes an AMC 12 theater complex and a Hampton Inn.
Oakbrook Center in Oak Brook. an outdoor mall for more than 50 years, already underwent a $30 million renovation in 2013 and 2014, including a spiraling fountain near the center of the mall, and the new Village Green with an open lawn area for seasonal entertainment and events.
On the west side, an enclosed glass pavilion provides shoppers with soft seating, tables and a fireplace. Other smaller fountains have been installed.
In addition, stores and restaurants were added. The lower level near Neiman Marcus was converted into a Perry's Steakhouse, and the former Bloomingdale's site features six individual retailers.
Around the outlets
• The Chicago Premium Outlets in Aurora is adding 20 stores along with its major expansion. The 10-year-old Aurora mall began construction on a $110 million addition last year and officials said it will show a "complete transformation." Plans call for new artwork, seating and lighting, a pond and fire pits. Owners are enhancing landscaping, paving sidewalks, improving lounge areas and upgrading food options. The east side of the mall also will have 2,200 new parking spaces.
• The Huntley Outlet Center in Huntley marks its 21st year and remains about 50 percent vacant with many prominent stores leaving in recent years. Its sales tax receipts also have declined, a major concern for village officials since half that revenue goes to the village. So village officials are eyeing the property for redevelopment. The village board in June hired the real estate consulting firm of Gruen Gruen and Associates to help evaluate reuse or redevelopment options for the mall, which was acquired by Indianapolis-based Simon Property Group Inc. Simon also owns the Chicago Premium Outlets in Aurora and Gurnee Mills.
• While Huntley struggles, the Fashion Outlets of Chicago in Rosemont, which opened in July 2013, could be expanding. Mall owner Macerich, based in Santa Monica, California, and Rosemont Mayor Brad Stephens said they have been crunching square-footage numbers this year to see what is viable. Even during an earnings call by Macerich executives with Wall Street analysts, the expansion came up as something "in our future." Macerich already has been expanding its other properties nationwide.