Rosemont mall expansion called off, meaning theater stays put
Rosemont officials on Wednesday put an end to the long-rumored expansion of the Fashion Outlets of Chicago - which would have spelled an end to the Rosemont Theatre - and a tax increment financing district to help fuel the redevelopment.
There were a lot of factors to the decision, Mayor Brad Stephens said, not the least of which were the economic impacts brought on by the coronavirus.
"Let's be real. Now isn't the time," he said.
Stephens and top brass at Macerich, the Santa Monica, California-based operator of the Fashion Outlets, have discussed the possibility of a mall expansion off and on since at least 2015, when then-CEO Art Coppola publicly mentioned it during a quarterly earnings call.
Those early discussions led both parties to ink a real estate purchase contract and development agreement in 2018, which triggered a five-year timeline for the mall owner to market the property and gauge potential retailers' interest.
Officials characterized the deal as a letter of intent, whereby the property east of the mall - which includes the village-owned theater - would stay with the village if Macerich eventually decided against adding onto the mall.
Initial plans called for a 225,000-square-foot expansion of the existing two-story, 538,000-square-foot indoor shopping center at Balmoral Avenue and the Tri-State Tollway. The village would have built a parking garage and gave Macerich land that includes the theater and surface parking lots.
A more recent idea, Stephens said Wednesday, was to develop an open air shopping space, not unlike Old Orchard in Skokie.
But discussions in recent months - initially about the mall's reopening plans after the temporary pandemic-related closure - led to the mutual decision to drop the expansion idea, Stephens said.
Three years into the five-year agreement, Macerich had certain bench marks to meet, such as submitting building plans and signing leases with retailers.
"We were at the tipping point with what the agreement called for," Stephens said.
Rosemont officials were willing to entertain the idea in the first place because of the sales and property tax revenues the mall has provided village coffers since opening in 2013, accounting for more than half of total village sales tax revenues in most years.
At the same time, the 25-year-old, 4,200-seat theater had struggled to compete with downtown Chicago venues, with some suggestion by village leaders that it was too large of a space.
But most entertainment venues are in the same place today, amid restrictions on large gatherings, so Rosemont officials are content on keeping the theater operation as is. They're still booking shows, and recently completed renovations to the building's loading dock.
The village had already taken steps to set up its ninth tax increment financing district that would have encompassed the theater and parking lots - even going as far as holding a public hearing in October 2017. The TIF would have frozen property taxes at current levels for 23 years, and taxes collected above that would have gone to a village fund to pay for public and private improvements.
A set of ordinances that would have enacted the 6-acre TIF district were routinely continued during monthly village board meetings since 2017, until Wednesday. The ordinances were on an early version of the board's agenda Monday morning, but were then removed and did not appear on the final version released Tuesday morning.
Stephens said it's possible the village could revisit the concept in the future should a redevelopment opportunity come forward.