ST. CHARLES – After 23 years, Charlestowne Mall is headed for a new beginning.
The Krausz Companies Inc. bought the mall in November for more than $9.5 million. The company plans to redevelop the site into The Quad St. Charles. The mall, which is about 27 miles from downtown DeKalb, has been in decline since its heyday in the 1990s.
The mall’s new owners hope to reverse that trend and attract more customers from communities including DeKalb and Sycamore by giving the shopping center a new look and new options.
Work starts slow
Demolition and reconstruction work could begin as early as July, St. Charles officials said. No firm groundbreaking date has been set since the passing of an initial April target date.
The first phase of the mall redevelopment will focus on completing exterior work to the mall building. The developer also is actively recruiting new tenants and finalizing architectural designs, said Russell Colby, St. Charles’ planning division manager.
Retailers look at infrastructure differently than before, said Jay Krigsman, Krausz Companies executive vice president. This means Krausz has to revamp the mall facility, which originally opened in 1991, to meet the needs of modern businesses.
“I think our plan rendering does a good job of solving those problems,” Krigsman said.
That plan includes demolishing the former Sears anchor store in the westernmost part of mall, which has been empty since 2011. Another part of the mall headed for demolition is the food court, located in the central north area on the upper level.
The mall’s Charlestowne 18 movie theater will have new entrances created by the removal of the former Sears space.
Initial renderings for open areas in the mall show cozy seating areas and fireplaces.
Parts of the mall property will be regraded from the current mix of slopes and inclines. This will involve construction work out in the mall’s parking lots, according to the city.
The regrading will allow for the option of standalone businesses in outlots around the mall property, Colby said.
Hunt for new tenants
From May 18 to 20, Krausz attended the International Council of Shopping Centers RECon in Las Vegas, a global retail real-estate convention.
“All of the landlords of any substance and tenants show up at this convention,” Krigsman said. “You have the ability to get your property in front of many people at one time.”
Tenant recruiting is critical to make the mall a regional draw. In DeKalb County, shoppers have more local options for shoes, clothing, electronics, and other shopping-mall staples than they did in the 1990s, and the emphasis on shopping local has grown. If shoppers decide to leave the area, they also have options in the nearby Geneva Commons, as well as Rockford, Aurora, and elsewhere.
The Quad could benefit from having a destination business such as the Apple Store, said Kim Malay, president of the Near-West Neighborhood Association in St. Charles.
Malay said the Commons and The Quad St. Charles could benefit each other by providing a broad range of stores. The shopping centers are about 5.5 miles apart.
“I do think that unique shopping experience has to happen there to be successful,” Malay said of the mall. “If they do that right, I think [customers] would come in from all directions.”
Revenue sharing plan
St. Charles needed to provide incentives to launch the mall redevelopment, officials said.
Krausz and the city will have a 50-50 split of the future sales tax revenue when the mall relaunches in 2015. Revenue sharing would start at the grand opening and last for 20 years, or until Krausz receives $20 million in reimbursements, whichever comes first.
The $20 million agreement will allow Krausz to make costly updates needed for the redevelopment. There are $12 million in construction costs to regrade, demolish and update the mall, according to the city’s executive summary of the agreement.
The developer also estimates the cost of attracting and retaining tenants will be $10 million.
The investment required to truly redevelop the mall property would not be justified by the rent that can be collected, especially when The Quad debuts, Krigsman said.
Some residents were pleased with the city’s willingness to work with the mall owners, said St. Charles Alderwoman Rita Payleitner.
“When I took office, the No. 1 question I would get was, ‘What is the city going to do to help the mall?’ “ Payleitner wrote in an email. “I’m delighted to have an answer [the tax-sharing agreement] that is so well received.”