FEATURE ARTICLE, MAY 2004

CHANGING SIDES
Top Chicago retail broker David Bossy switches gears to the development business.
Randall Shearin

If anyone can make the transition from broker to developer, David Bossy can. After all, development is nothing new to the long-time Chicago retail broker. For more than 20 years, Bossy has been affiliated with Mid-America Real Estate Corporation and is one of Chicago’s top retail brokers. What is not as well known is that he has been a developer for nearly as long.

David Bossy

Bossy announced last year that he was stepping down from his role as president of Mid-America Real Estate Corporation to be a developer on a full-time basis. Shortly thereafter, he formed a new venture, Mid-America Investment & Development Company (MIDCO), with partner Mike Firsel, a real estate attorney turned developer.

It is a departure for Bossy, but it is something he has expected to do for a long time, he says. At Mid-America, Bossy helped introduce Chicago to the retail tenant representation business. In the mid-1980s, no other firm was doing retail tenant representation in Chicago. The company started representing six retailers, which quickly became 12, then 50, then 100.

In the 1990s, Bossy began to create partnerships with developers by creating development opportunities for them and investing with them as well. Searching for sites with a retailer in a suburb, for example, Bossy might hear the retailer say, “It would be great if we could locate at this intersection.” He would find out who owned the land and take the deal to a developer. His contribution was that he would continue to lease the property and receive a stake as a venture partner. Then, together with the developer, they would handle the entitlements, construction and financing of the center.

“It was a great partnership because we understood the demand side of the equation,” Bossy says. “We understood where the retailers wanted to be and what site configuration they wanted. We could design an efficient site plan, and we had our finger on the pulse of available sites. We quickly created many power centers and small strip developments.”

Why switch gears into full-time development?

“It was a natural evolution for me to grow up in the brokerage business and evolve in partnership with outside developers while attracting incredibly capable, intelligent talent at Mid-America, and move on to become a developer,” Bossy says. “I see this as an extension of my longstanding philosophy to use my expertise and creative energy to serve the retailers and communities I work with. I should also admit that the business consumes me. I love the people, the challenges and the opportunities.”

Firsel’s story is much the same as Bossy’s, except instead of being on the leasing side, Firsel was a real estate attorney for more than 20 years when he decided that development was also for him. During his career, he represented countless developers and municipalities in their development efforts. A few years ago, Firsel left his position as founder and principal at a law firm and joined The Fogelsen Companies to continue his education in the business. Firsel also gained tremendous experience on the public side by serving as a planning commission member in Arlington Heights, Illinois, for 8 years, and as chairman for 5 years.

In Wheeling, Illinois, MIDCO is developing the 400-room Westin North Shore at the corner of Lake Cook Road and Milwaukee Avenue.

Bossy and Firsel first met when their respective companies joint ventured the redevelopment of downtown LaGrange, Illinois. Anchored by Borders Books & Music, Trader Joe’s and Walgreens, the project also has residential condominiums. Around the same time, Bossy was developing a 180,000-square-foot shopping center in Plainfield, Illinois, anchored by Barnes & Noble and Target. Bossy also participated with Terraco on the redevelopment of Lincoln Village in Chicago.

With Firsel’s expertise in entitlements, transactional work, financing and municipal experience, the main elements of a strong retail development team were in place.

“Having individuals with different skill sets that complement each other is a great combination,” Bossy says. “It is resulting in a lot of new, exciting projects.”

Adding their skills to the MIDCO equation are Vice President Michael Nortman, Vice President Andy Robbins, and a team of brokers, sales associates and support staff.

Today, because of Bossy’s active site selection during the years and his joint ventures with other developers, the new company has more than 25 projects in active phases of development. Some of the projects are in joint ventures with Scott Gendell at Terraco, a venture that has successfully completed 28 projects during the last 13 years, while others are in partnership with Mid-Northern Equities, The Daly Group, Inland Real Estate Development Corporation and others.

With Mid-Northern, MIDCO is developing Mundelein Crossing in Mundelein, Illinois. The 500,000-square-foot center is anchored by SuperTarget, T.J. Maxx & More and The Home Depot.

In Homewood, Illinois, MIDCO is the talk of the town. At one intersection, the team has redeveloped three 95 percent vacant shopping centers during the last 5 years, and it has plans to purchase a fourth.

In Wheeling, Illinois, MIDCO is developing the 400-room Westin North Shore at the corner of Lake Cook Road and Milwaukee Avenue.

Bossy became involved in Homewood when he purchased the defunct 350,000-square-foot Washington Square Mall that was vacant. Bossy recruited The Home Depot to locate on 13 acres of the 26-acre site. In partnership with Mid-Northern Equities and Terraco, Bossy built Washington Square shopping center on the remaining 13 acres anchored by a new Jewel/Osco, OfficeMax and 25,000 square feet of shops. Across the street from that project, Bossy purchased a former Goldblatt’s-anchored shopping center, scrapped it, and developed a new Target store. He did the same to a nearby vacant Builder’s Square store, selling the location to Kohl’s. MIDCO is currently under a joint venture contract with Infinity Property Management and Mid-Northern Equities to purchase Washington Park Plaza (located across from Washington Square) and has plans to redevelop the vacant Jewel/Osco and Venture-anchored center with a number of junior anchors and national retailers.

MIDCO’s redevelopment efforts have helped the city — not only with redevelopment but with the tax revenue that comes with it — that for the last 2 years, the mayor of Homewood has appointed Bossy the grand marshal of the Fourth of July parade.

The story is similar in Oak Lawn, Illinois. There, Bossy shared the vision with the late Mayor Kolb of totally redeveloping the city’s downtown district. MIDCO now has six projects in the village. The first was an old Kmart store and an Oldsmobile dealership that was converted to The Home Depot and Portillo’s Restaurant. The most recent project is a Holiday Inn that MIDCO plans to tear down and then build a large discount retail store in its place. MIDCO has also acquired a former Heilig-Meyer store in the village, which it is redeveloping into an Outback Steakhouse and bank; and an office building, which has been razed to build a small strip center anchored by Panera Bread and a Washington Mutual bank branch. The Village of Oak Lawn hired MIDCO to develop an urban transit center along the Metra commuter rail line. The project will involve ground-floor retail, parking (for Metra commuters) and mid-rise luxury condominiums.

“New Urbanism (mixing retail with residential uses) is providing excellent opportunities for the redevelopment of suburban downtowns all across America,” Bossy says. “To me, it’s really where the development industry is evolving.”

Bossy developed Kensington Center, a 180,000-square-foot retail center in Plainfield, Illinois, with Terraco.

Bossy’s relationships with retailers help hasten his development speed. Often, he knows where the retailers want to go before they get there. Because of his 28-year brokerage career in Chicago, he knows the market cold. He also knows the infill areas, and which retailers are abandoning what projects and which buildings will soon be on the market.

MIDCO was recently approved to build a 250,000-square-foot entertainment-based shopping center in Naperville, Illinois, called Naperville Crossings, anchored by a 16-screen, 3,100-seat Kerasotes theater. A senior housing project is also planned for this site. Deals are also pending at the center for six restaurants: Champps, Macaroni Grill, Eli’s Pancake House, Home Run Inn, Panera Bread and Starbucks Coffee, as well as Bank of America and Fifth Third Bank.

MIDCO has also developed a program to build six 10,000-square-foot strip centers per year all over Chicago and northwest Indiana. MIDCO is working with a select number of smaller retailers interested in the opportunities. MIDCO has also created a land division that is assembling large parcels of land for future development. Currently, it has 700 acres in Joliet, Illinois, and 300 acres in Yorkville, Illinois, for future development of multifamily and single-family housing.

While Bossy has traditionally concentrated on retail, he is also pursuing senior housing development with ground-level retail. MIDCO has four projects on the drawing board that are all located in suburban downtowns.

“These are small scale projects,” Bossy says. “They’re specifically sized for the central business districts of upscale suburban downtowns to provide communities for people who have to scale back their living quarters in later years, but who want to stay close to where they have lived for the past 20 to 30 years.”

The winning prospect of locating senior housing in suburban downtowns, Bossy says, is that the projects are in close proximity to churches, libraries, banks and other services.

The company is also active in hotel development. It is developing two Westin hotels, one each in Lombard and Wheeling, Illinois. In Wheeling, the company will develop the 400-room Westin North Shore at the corner of Lake Cook Road and Milwaukee Avenue, while in Lombard it will be developing a 500-room hotel with a 50,000-square-foot convention facility on the ring road of Yorktown Mall. Both projects will have signature restaurants. MIDCO is partnering with Peter Dumon of The Harp Group to develop the hotel projects. Restaurant leases for the hotels have been executed with famed Chicago steakhouse Gibson’s in Lombard and with Hugo’s Frog Bar in Wheeling.

“There hasn’t been a four-star hotel developed in the North Shore market or Oak Brook corridor in the last 20 years,” Bossy says. “There is a unique opportunity to create a state-of-the art flagship hotel with fine dining in both of these markets.”

While many developers stick to just one type of development — such as grocery-anchored retail — Bossy describes himself as a creative thinker who sees opportunity everywhere.

“I learned the positive use of leverage early in my career, and we have specific people dedicated to specific tasks,” he says. “If we do not have expertise in a specific area, we are quick to recognize it and we seek out a strategic partner in order to execute the assignment.”

With everything from 10,000-square-foot strip centers to hotels, entertainment centers and mixed-use projects, MIDCO has a wide range of commercial development currently underway.

“There is no question we’ve got a full plate,” Bossy says of his new venture. “It is a constant barrage of activity, but there is no other way I would have it. I see a prolific amount of activity, and it is difficult to turn away good opportunities. It’s the curse of being an active broker — and developer.”

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