Hawthorn Mall redevelopment nearing milestone

The plan for a $250 million makeover of Hawthorn Mall in Vernon Hills is taking shape, with the end of October a target for village leaders to decide whether to designate most of the property as a special financing district as an incentive to its owner.

Discussions of how Dallas-based Centennial Real Estate can reinvent the vintage mall at Townline Road and Milwaukee Avenue - and how the village will help make that happen - have continued for months.

The next step is an Aug. 13 hearing for representatives from the various entities that receive mall property taxes to review a proposed tax increment financing district around the property. This joint review board is tasked with making a recommendation to the village within 30 days and issuing a written report.

That will be followed by a public hearing on the proposal Oct. 6. Both are required by state law and represent a milestone for a project considered essential to the village's future.

If all goes as planned, the village board would vote on the TIF designation and redevelopment plan Oct. 27.

"It's significant in the fact the timeline has been established," Village Manager Mark Fleischhauer said of the two meetings. "I think everyone in the community realizes the importance of this project."

A TIF district is an economic development incentive in which property tax disbursements to schools, libraries and other local governments are frozen at current levels. Any additional tax revenue generated by rising property values goes into a special fund to pay for improvements within the district.

It has been more than a year since Centennial executives hosted a town hall meeting in the vacant Carson's anchor space to outline their vision for the outdated mall, which opened in 1973. Company officials since have reiterated they are committed to a long-term investment in Hawthorn, despite questions about the future of malls.

"Yes, we are continuing to move forward with our plans for redevelopment," said Jon Meshel, senior vice president for Centennial. "It's important to note, however, that COVID-19 has provided a real (wakeup) call for shopping centers nationwide."

People want a retail destination like Hawthorn to be a gathering place where they can spend time and enjoy new experiences, he added.

But a financial incentive will be needed, Centennial has emphasized. How much that will be is to be determined.

"That's still one of the items under consideration,' Fleischhauer said. "That will be part of the redevelopment agreement."

In March, the village hired a consultant. to analyze whether the mall area would qualify for a TIF district under state law. The results, posted two weeks ago on the village website, say it does.

The study also says private investment in the mall without a TIF district is unlikely. The 63-acre study area covers most of the shopping mall, including the vacant Sears and Carson's anchors, which closed two years ago.

Macy's and JCPenney, which are not owned by Centennial, are not included.

Sears and Penney account for 26% percent of the space in the 1.27 million square foot mall. Other vacancies bring the amount of empty space to 36%. Altogether, 45% of the mall is either vacant or subject to short term, temporary lease agreements, the consultant found.

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