Bloomingdale mayor leads effort to go big in remaking Stratford Square
Frustrated by years of inaction by the owners of Stratford Square Mall, Bloomingdale has spent more than $5.6 million to buy former department store buildings and open space near the mostly deserted shopping center.
Now the village is trying to use its powers of eminent domain to take over the core of the mall itself. Bloomingdale has filed a condemnation lawsuit aimed at acquiring the property. Village President Franco Coladipietro called it an “act of last resort.”
“I think that there's a lot of opportunity here, but doing nothing is simply not an option,” Coladipietro said.
Mall owners are fighting the lawsuit in DuPage County court. Their attorney did not return requests for comment, and attempts to reach mall representatives were unsuccessful.
Bloomingdale has been buying mall real estate to facilitate a full-scale redevelopment of Stratford Square. The village paid $2.4 million for the vacant Carson's department store, $2.15 million for the former Burlington building and $1.1 million for a vacant parcel east of the mall, between townhouses to the north and medical offices to the south.
“A redevelopment of a property this size - this could be a 10-year type of a plan,” Coladipietro said.
Opened in 1981, Stratford Square sits in the center of a 275-acre block about the size of 24 Soldier Fields. Namdar Realty Group, a New York-based commercial real estate firm, acquired the interior portion of the mall in October 2019. Only one anchor store remains - Kohl's.
“Bloomingdale has just lost patience with the owner, and they want to undertake their own initiative to try to enhance and initiate and be the catalyst for redevelopment,” said John C. Melaniphy, president of the Chicago-based retail consulting firm Melaniphy & Associates. “It's visionary, but it's also fraught with a lot of risks.”
Coladipietro acknowledges it's not a simple undertaking.
“You have the potential of a brighter future. I understand that there's risk. We look at it as a calculated risk,” he said. “And we've done the due diligence prior to engaging in the purchase of the properties.”
'Too much' retail
Bloomingdale trustees hired consultant Teska Associates in May 2021 to re-imagine the mall site. The firm drafted conceptual plans that show residential, commercial and recreational development in place of the mall's former retail buildings and parking lots.
Officials also have been actively pursuing potential developers to gauge their interest in Stratford Square, Village Administrator Pietro Scalera said.
“In order for us to really hit the ground running with that, we have to assemble the properties because you really can't begin anything until you have the entire site under one ownership group,” Scalera said.
To that end, the village opened a line of credit, or short-term loan, to pay for the purchase of the Carson's, Burlington and undeveloped properties. The village also filed condemnation lawsuits targeting Kohl's and the vacant Sears store to “keep everything on the same track,” Coladipietro said.
“We just figured during the pendency of the lawsuits we could just continue to engage in talks with them to try to come to terms, and we were able to do that with Sears,” he said.
The village anticipates reaching a purchase agreement with Sears in the coming month, Scalera said. Bloomingdale wants to keep Kohl's as part of future development.
“I still think that there's an opportunity for additional retail in here because of how the entire project could be developed,” Coladipietro said. “But it's just simply too much.”
In the era of online shopping, suburban malls have sought to adapt to the changing retail landscape by carving out space for housing, entertainment and restaurants. Stratford Square has been limping along, drawing YouTubers who film “dead mall” videos in the largely empty corridors.
“We're not going to see a lot of those small specialty stores coming back,” Melaniphy said.
'A ghost town'
Bloomingdale isn't the only town gaining ownership of mall land. West Dundee trustees have moved to purchase the former Sears and Macy's stores at Spring Hill Mall.
“Almost uniformly, every developer with whom we spoke stated that the site has too many complications - too many owners, too many covenants, too many uncertainties,” West Dundee Village President Chris Nelson said in announcing the Macy's deal last month. “The village's aim is to bring simplicity to the process.”
About a 40-minute drive away from Spring Hill, Stratford Square also has a tangled ownership history. Separate entities controlled the anchor properties. Namdar owns the interior portion of the mall and the JCPenney box.
“Ultimately, our vision is to work with city leadership to transform the mall into a premier regional destination and flourishing center of community life, where residents and visitors shop, work, live and play,” Elliot Nassim, president of Mason Asset Management, a partner firm, said in March 2020.
Since then, the mall has continued to lose tenants. Burlington has moved across the street to Stratford Crossing.
After walking through the mall in December 2021, village officials came to the “reasonable conclusion that Namdar is not going to make a good-faith effort to redevelop the property,” Coladipietro wrote in a letter to the realty group.
“Simply put, the property is practically a 'ghost town,'” he wrote. “The continued dilapidation of the property ... leads the village to conclude that, while Namdar may possess the financial ability to manage the property, Namdar does not possess the character to make the necessary investment to rebrand the property.”
The village is moving ahead with plans to make Stratford Square attractive for redevelopment. Bloomingdale created a tax-increment financing district that encompasses the mall area - with the exception of the Woodman's stand-alone grocery store, which replaced the old Macy's.
Inside the upper level of the mall, on a recent weekday afternoon, there's no rustle of shopping bags. Foot traffic is sparse. A directory sign lists dozens of stores, but many of those spaces are barren.
“I think that there's tremendous future that's to be had here and really a new beginning for the next generation, but I can't do it with this,” Coladipietro said. “And I can't do it without willing partners.”