Old Orchard Owner Adds New Stores, Considers Residential Development

Skokie IL

13 April, 2022

1:18 PM

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SKOKIE, IL — Village staff and the owners of Old Orchard Mall both emphasized their commitment to upgrading the shopping center — regardless of whether it gets sold. Meanwhile, village staff said representatives of the Paris-based real estate investment trust that has owned the mall for the past three years have begun to explore the possibility of residential development at the mall. The discussion of adding homes to the shopping center follows the Skokie Village Board's creation of a new business district and development plan to reimburse property owners for shopping center improvements with the proceeds from a new 1 percent tax. Unibail-Rodamco-Westfield executives have told investors they plan to unload virtually all their U.S. mall holdings by 2024. Dominic Lowe, the company's U.S. chief operating officer, said transformative improvements at Old Orchard will be announced before the end of 2022. "Westfield and the Village of Skokie have jointly developed a plan to secure a thriving future for the shopping center and we are fully committed to bringing new uses and diverse offerings, as well as enhancing the customer experience to create the best-in-class destination in the Chicagoland area," Lowe said in a statement provided by village officials. "In the coming months, we will announce new first-to-market retail and entertainment destinations that will transform the future of the center and the local community," he said. Two new businesses opened at Old Orchard in February — fast casual pizza restaurant Pie Five and premium casual clothing store Marine Layer — and six more are due to open by the end of the year, according to a mall spokesperson. They include Alo Yoga, Theraboyd, Tory Burch, Molly's Cupcakes, The Capital Grille and Bar Siena, which is due to open in a restaurant space created out of two former retail spaces. Mall representatives declined to disclose the shopping center's vacancy rate. Old Orchard General Manager Serge Khalimsky said he was thrilled to welcome the new businesses, which he said were key to engage loyal customers. "The center is reinvesting in customer amenities, overall ambiance, and upgrades to infrastructure," Khalimsky said in a statement. "As a result, the shopping center will outpace the competition, welcome a whole new generation of customers, and continue to deliver the jobs and revenues Skokie needs to thrive." Skokie receives about $850,000 of the $14 million in property taxes paid by the mall owners, according to village staff. The vast majority of the rest of that property tax bill goes to local public school districts. Staff said the village also receives between $5 million and $6 million in annual sales tax revenue from the center between its municipal and home rule taxes. Village Manager John Lockerby said Old Orchard has had many different owners over the years, and the new business district will not be affected by a change in mall ownership. "The Village carefully crafted the new Business District agreement so that all obligations transfer to any possible new ownership and no tax money is transferred until actual improvements are completed. The Village and Westfield — or Westfield's successor — will continue to work together to ensure the mall's transformation, achieving an even stronger flagship property status," Lockerby said in a statement. "On a national level, the mall industry is evolving to respond to e-commerce competition and the ongoing impact of changing pandemic conditions," he added. "The commitment to ensure Old Orchard's relevance remains a top priority." Related: Old Orchard Parent Plans To Sell Off American Mall PortfolioWestfield Old Orchard Declared 'Blighted' As Sales Taxes Hiked 1%Old Orchard Owner Sold In Megamall Merger