10/25/2023
Update - Fall 2023
Bob's Trading Post
As many are aware, the space occupied by Bob's Trading Post has been sitting inactive for several years. At village prompting, Bob's Trading Post is having a liquidation sale through the end of November. The village is strongly encouraging the redevelopment of the storefront, along with its companion space--owned by the same person--that is currently occupied by Riverside Upholstery.
Congratulations to Jack Festen
Dundee Rotary Club member Jack Festen has been awarded the Village of West Dundee Community Service Award for 2023. Jack has invested much of his time and energy making West Dundee a better place. Congrats, Jack.
Spring Hill Mall
A lot has happened here since I last posted. In recognition of that, I am recapping updated mall FAQs. Should you have any questions about the mall area or the village's plans, please reach out to us at village hall at 847-551-3800.
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Does the village own Spring Hill Mall (SHM)?
Here is the ownership breakdown:
• Sears (anchor store): The village of West Dundee has acquired this property. Vacant.
• Macy’s (anchor store): The village of West Dundee will be acquiring this property in November 2023. Vacant.
• Carson’s (anchor store): The village of West Dundee will be acquiring this property in November 2023. Vacant.
• Kohl’s: (anchor store): Owned by Kohl’s. Remains in operation. Located in Carpentersville.
• Interior Mall: The village of West Dundee will be acquiring this property in First Quarter 2024. Remains in operation.
• Theater: The village of West Dundee will be acquiring this property in First Quarter 2024. Remains in operation. The village will seek to keep the theater operating. Located in West Dundee.
Is the mall located wholly in West Dundee?
No. The mall is located in both West Dundee (85%) and Carpentersville (15%). For the purposes of this document, “the village” will refer to West Dundee unless otherwise specified.
Will the village keep the mall operating in 2024?
The mall will continue operating at least through the 2023 holiday season.
Why would the village acquire these properties?
To clarify ownership rights, reconcile access issues, and to provide for a simpler acquisition process for future private development. The village’s primary concern is that, absent municipal intervention, the property could fall into major disrepair and disuse, creating a situation where redevelopment would be made that much more difficult.
Is SHM likely to be re-tenanted?
No. Occupancy levels are likely in the 20% range, which would imply that the mall is beyond recovery. This is due, in part, to the sea change in the retail marketplace. For starters, there are simply fewer national retailers available. Additionally, remaining national retailers are concentrating their ever-smaller store footprints in areas that have the highest density and/or greatest income concentrations. There might be some local-ish retailers the new owners might seek, but these are typically not retailers with a strong enough draw to get people to enter an enclosed mall.
What are the factors that typically impact the success of a retail establishment or a mall?
• Residential density.
• Household incomes.
• Daytime population.
• Average Daily Traffic.
What about an outlet mall?
When outlets came into vogue in the 1980s, they were genuine locations for past-season-retail (PSR) or irregular products that retailers would otherwise like to have sold in traditional retail settings.
As the outlet concept matured, however, it became what it largely is today: a place where made-for-outlet products are sold. This evolution has made many outlets just another sales channel for retailers and less of a bargain space for shoppers. Concurrently, retailers such as TJ Maxx, Ross, and Marshall’s have taken on some of the early-era-outlet qualities.
And so it is with that in mind that discussions regarding a conversion of SHM to an outlet space have perennially been tepid. Adding to the complexity was the fact that covenants signed with mall anchors (such as Macy’s) prohibited outlets in the mall itself. Such covenants remain in place, in concept, but are unlikely to be enforced by retailers that no longer have an operational presence at SHM.
Most importantly, outlets tend to be super-regional developments—meaning that you might have only one or two of them in a geographic region like Chicago (for discussion, this is defined as within 90-minute-or-so drive from Chicago proper). Using that criterion, Chicago already has a saturated outlet market, with outlet malls in the Gurnee/Kenosha area; in Rosemont; and in Aurora. This is evidenced, in part, by the failure of the outlet mall in Huntley. Moreover, the outlet mall market is dominated by Simon Properties, and they own two of the aforementioned outlet malls.
What about a large entertainment venue like Navy Pier or Great America?
This is unlikely. For Navy Pier, it is adjacent to a city of 2 million people and bordering Lake Michigan. Renovating the space into what we see today cost developers in the early 1990s upwards of $300 million in current dollars and was backstopped by taxpayers. That’s a tall order with no guarantee of financial success—for the developer or for the taxpayers who would likely be supporting it. Similarly, Great America is a substantial draw on its own, and would be a very difficult concept with which to compete. Locally, there is also Santa’s Village in East Dundee.
What about a water park?
Like the concepts mentioned above, water parks require substantial investments without a guaranteed return on investment for developers. Water parks in Rockford and Arlington Heights failed within the past decade. A water park had long been proposed for Hoffman Estates, but ultimately failed to materialize. Gurnee has a recently renovated water park, but the community also has the added attraction of Great America nearby that likely contributes to the park’s viability. Locally, again, there is also Santa’s Village in East Dundee.
What about an Apple Store?
The area lacks the income levels and residential density required by Apple to deploy an Apple Store.
Somebody should put (insert concept here) there. Why hasn’t it happened?
Every store, restaurant, or attraction costs money to deploy. (For example, just opening a small Jimmy John’s can cost upwards of $250,000—and that figure does not include the cost of rent.) And every time a new concept is opened, someone is risking real money in the hopes that the concept works in a given area. If a concept isn’t opened in a specific area, it is likely that the demography of that area fails to meet the criteria a developer/store operator/restauranteur/franchise has established so that a person can reasonably expect a profitable return.
What happened with the redevelopment project from 2016?
The village negotiated with then-owner Rouse Properties to invest over $30 million in the mall in hopes of revitalizing the space. Much of the renovations focused on the west end of the mall, resulting in the removal of the former JC Penney’s anchor store and the nearby food court. In their place, a new wing was constructed that featured a movie theater (Cinemark) and new retail spaces (originally occupied by H+M and Victoria’s Secret).
The improvements did appear to impact the longevity of some stores, with many remaining at least an additional 24 months in the hopes of improved activity in the mall. Ultimately, the investment did not yield hoped-for results, especially during an overall downturn in the retail sector.
What did the village spend on the 2016 improvement project?
Nothing. The incentives offered by the village required the mall to generate revenues in excess of those received prior to the implementation of the improvements mentioned above. The changes did not elicit the expected revenues, so the village did not rebate any funds back to the developer. With the recent sale of the property to a new owner, the incentive deal will likely be eliminated entirely. As a result, all of the costs of the improvements made to the mall in 2016 were borne by Brookfield.
So, what should the future hold?
The mall at Spring Hill is in decline. Without functional anchors or strong national retailers in the interior, the decline will be precipitous and irreversible. More globally, the enclosed-mall concept is struggling, with only those malls in dense, income-rich areas seeing gains.
From a village perspective, redevelopment of SHM into a mixed-use site (featuring housing, office, retail, and commercial structures) is the only path forward. The village has and will continue to advocate for that with mall ownership---past, present, and future.
The process of redeveloping the area will likely take a minimum of 5 to 10 years. Private development costs would likely exceed $150 million.
Will the village accept incremental or interim uses?
No. Warehouses, data centers, truck depots, exotic vehicle storage, sports complexes---the village will not accept these. The reason stems from the fact that the mall is located in the center of the community, and any use akin to the ones mentioned would be detrimental to the overall culture of West Dundee. These uses are allowed elsewhere in the community, so developers interested in deploying such concepts in the area have other locations from which to choose.
What can the village do to help redevelop the mall?
• Continue to sharpen the redevelopment concept plan adopted by the village board in 2018.
• Acquire key parcels to ensure appropriate, positive, and timely redevelopment.
• Encourage residential and office developments in and around the SHM area.
• Collaborate with Carpentersville on a uniform development process.
• Curate a roster of respected and sophisticated developers to contact once ownership issues are resolved.
• Establish financial incentive mechanisms (i.e., and enterprise zone or a TIF district) to support positive development.
• Make clear to prospective developers the types of uses that will be considered and those that will not.