(For more retail coverage, click GlobeSt.com/RETAIL.)
OAK BROOK, IL-What was once a 25-year-old office park with 30% occupancy will soon become the 185,000-sf retail center known as the Oak Brook Promenade. The $50-million open-air center will sit at the southwest quadrant of Butterfield and Meyers roads.
The development was the idea of Dennis Hiffman, chairman and CEO of locally based NAI Hiffman Commercial Real Estate Services. According to Hiffman, the answer to the struggling office market was to demolish the three-building former Waste Management headquarters, replacing it with 19 acres of retail tenants.
In response to Hiffman's proposal, the Village of Oak Brook reviewed the office park and determined the existing site was underutilized and obsolete for the marketplace. With a vacancy rate of 70%, the site was significantly higher in vacancy than the office buildings along the 22nd Street/Butterfield Corridor. Oak Brook Trustees then approved the use of tax increment financing to support the development, making it the Village's first use of a TIF.
NAI is breaking ground on the development this week. When complete in fall of 2006, the retail center will showcase four restaurants, including McCormick & Schmick's and Kona Grill, as well as specialty stores Hiffman says will be new to the area. Neighboring tenants include PF Chang's, Champps, Galyan's, Weber Grill and Ethan Allen. The center will also be located between two major malls, Oakbrook Center in Oak Brook and Yorktown Center in Lombard.
NAI execs say that there are 3,000 households within a one-mile radius of the retail development. Within a three-mile span, there are 35,027 households, and within five miles, there are 104,986 households. The estimated average household income is $93,684 within one mile, and 51% of the nearby customer base has achieved a bachelor- or graduate-level education.
While the population as of 2004 was 6,368 people within one mile, NAI says the population is expected to jump to 6,889 by 2009, and to 7,485 by 2014. Within five miles, census numbers show a 2004 population of 266,608. That number is expected to increase to 272,372 by 2009, and 278,330 by 2014.
According to the village, 20% of the sales taxes generated through redevelopment of the property will be used to pay down the debt. If all goes as planned, the village says it will begin receiving sales tax proceeds from the new retail stores and restaurants by the end of 2006 or early 2007. This project is expected to increase the village's tax revenues by about $1.25 million, or an additional 8% to 10% of the village's current sales tax revenues.
NAI senior vice president Jim Farrey, along with vice president Claire Bitautas and associate Anthony Turano are working on the project. The team also includes development managers Denny Hiffman, Ken Erickson and Mike Van Zandt.
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