COVER STORY, APRIL 2006

RETAILERS MAKE CHANGE
The redevelopment of existing retail properties is bringing new life to the Chicagoland retail market.
Kevin Jeselnik

The changing nature of the retail industry is both exciting and challenging. One cannot predict the ebb and flow of retail trends. This constant change creates a need for malleability in the real estate that retailers fill. A timely and creative redevelopment of an existing retail space can completely alter the retail landscape of a given market. Two unique and very different redevelopments are underway in the Chicago area that illustrate the advantages of working within existing parameters to create something fresh and new for both retailers and consumers.

10 S. State Street
Chicago

Lucien Lagrange Architects completed the redesign of 10 S. State Street in Chicago from single- to multi-tenant retail space (shown in this preliminary rendering).

Approximately 4 years ago, after purchasing the building from Toys “R” Us, which had shut its doors several years ago, owner/developer JDI Realty of Chicago (the property has since been acquired by Anglo Irish Bank for approximately $36 million) began planning a redevelopment of the property. LLA was once again enlisted to provide design services, this time to redesign a single-tenant, three-story facility into an accessible multi-tenant property with frontage for three tenants. The design process began in 2003 and construction started in the spring of last year. Two tenants, Office Depot and Urban Outfitters, have already taken space, and the third tenant, Annie Sez, is completing interior build-out and should be open by the summer.

“The interesting challenge was that there were three levels of the building — a basement, the ground level and the second floor — and we had to come up with a concept whereby the developer could have tenant space that would allow ground-floor street space of all tenants,” explains LLA’s project manager Cayl Hollis. The building originally had one entrance on the north end of State Street, with escalators and a passenger elevator located there leading to the basement and second level. Two additional passenger elevators were located in the southwest section of the building, and a freight elevator and single-berth loading dock was positioned off an alley on the south end. “You have all these core elements, if you will, loosely dispersed through the building,” Hollis says. “There was no central location through which you could easily feed 3 tenants that were looking for street frontage.”

To ready the building for multiple tenants, LLA created three separate entrances on the main level along State Street, and reworked the layout of the escalators, elevators and egress stairways. “The basic challenges were working out the egress for the tenants, because of having two tenants upstairs and one in the basement with all three on the ground floor,” Hollis explains. “We had to re-work some existing egress stairs to allow them to handle more capacity, because we reduced the number of stairways from three to two.”

Office Depot maintained Toys “R” Us’ existing north entrance and is occupying all of the basement space. The retailer has approximately 35 feet of frontage, as well as access to the freight elevator in the south alley. One set of escalators and the adjacent passenger elevator were kept in place to access Office Depot’s basement space.

Urban Outfitters took the south end of the main level along State Street, with more than 60 feet of frontage, as well as half of the second floor. The third tenant, Annie Sez, is taking the balance of the ground-floor space in the middle of the building and the remainder of the second-floor retail space. “To create [Annie Sez’s] access to the second floor, we relocated the two escalators that were originally in the store for Toys “R” Us and lead to the second floor from their existing location into the middle tenant space,” Hollis says. Also, a suspended elevator was mounted in Annie Sez’s space. The underside of the elevator pit is actually at the ceiling of Office Depot’s basement space. The suspended elevator was yet another creative way to fulfill all the transportation needs of the customers.

“The client basically wanted the new building to act as if it were three separate buildings,” he adds. “Each tenant has its own identity and entrance off the street. Because of that, the façade has been redesigned to allow for three separate identities.”

Office Depot maintained the original façade, so very little had to be re-worked on their frontage. However, the balance of the building was either significantly re-worked or removed and replaced with new materials. Urban Outfitters removed the façade and put in place a steel-and-glass storefront. The middle space, which underwent many design iterations, ended up maintaining some of the pre-cast along the top of the façade and installed a new aluminum-and-glass storefront from the first floor up to the ceiling of the second floor.

Rather than attempt to maintain a uniform look to the front of the building, the developers, designers and tenants sought to form distinction among the tenant spaces without creating a disjointed building front. According to Hollis, the goal wasn’t “to have any significant continuity of aesthetics,” but to have the three storefronts complement each other.

Hollis sees the redevelopment of older properties in Chicago as a great trend. “So much work is going on in urban areas, and doing this kind of design in an existing building was a unique challenge,” he says. “Chicago is the perfect example of an urban area were a lot of historic buildings are being adapted to new use.”

Lincoln Mall
Village of Matteson, Illinois

Dallas-based Realty America Group (Lincoln Mall) LP is underway on a $115 million redevelopment of the Lincoln Mall in the Village of Matteson, Illinois.

Lincoln Mall was completed in 1973 and last renovated in 1993. Realty America Group was actually contracted to sell the mall for the previous owner, but upon completing its due diligence, saw the great opportunity to redevelop and re-tenant the mall. Realty America Group approached the Village of Matteson for assistance and the municipality responded by awarding $45 million in tax increment funding in April 2005 to jumpstart the project.

In August of 2005, the redevelopment broke ground with the construction of a new four-lane road that will connect Cicero and Route 30, the two main arteries to the mall. Construction of the road slowed during the winter, but has since picked up with completion in sight. According to Tracy Munno, executive vice president of Freehold Management and general manager of Lincoln Mall, the new road serves two significant purposes. “As we began marketing the property to retailers, something we heard over and over again was, ‘We don’t want to be on the back side of the mall.’ So, the new road allows us to take the back off of the mall by creating traffic and visibility,” she says. “It also is allowing us to develop land that was previously undevelopable.”

The new access increased the site’s size to 114 acres. The existing space will be reduced to its new size through the demolition of the vacant Montgomery Ward anchor space and approximately 125,000 square feet of surrounding interior mall space. Currently, several tenants are being relocated to prepare for the demolition. The existing facility will also undergo an interior renovation and façade facelift, including two newly designed entrances. “There are so many behind-the-scenes elements that have to be addressed with a 30-year-old structure, from re-routing utilities, completing environmental work and, of course, making sure we can continue to operate through the redevelopment,” Munno explains. “It will be a major transformation and the changes will be evident when the project is complete at the end of 2007.”

The new, open-air space will comprise between 400,000 and 500,000 square feet of big box, specialty retailer and restaurant space. A power center will be constructed along with two freestanding big box anchors. Additional pad sites exist for multiple restaurants and banks. Outdoor seating is being put in place around the new entrances and additional aesthetic improvements are being implemented throughout the site, further establishing the mall as a part of the growing indoor-outdoor retail trend.

“I think that what’s nice about the overall plan is that it’s really allowing us to marry the best of both worlds — those that like to operate within the mall and those that prefer to be in big box, stand-along space,” Munno says. “We fortunately have the acreage to do it all, including restaurant pads, a [10- to 16-screen] theater and a power center, as well as interior mall space, which those of us in the Midwest thoroughly enjoy 6 months out of the year because of the climate-control. If you can make that selection available to your customer, you can create a retail hub, a destination for people.”

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