The outdated shopping center at 111th Street and Cicero Avenue that was once the subject of a years-long court battle took a giant step closer to redevelopment.
Oak Lawn trustees approved a memorandum of understanding between the village and the developer chosen to redevelop the 1976-era shopping center, during Tuesday’s board meeting.
The memorandum is the first step toward a formal lease agreement with Itasca-based Hamilton Partners, a firm that specializes in investment, development and management of commercial properties.
Oak Lawn settled its litigation with Sears Holdings Company, which had sued the village when the property was included in a TIF district in 2006. Sears leased the Kmart parcel from J.C. Penney, which owned the land.
The village purchased most of 29-acre land parcel from J.C. Penney on May 2011. Since then, village has since assembled the smaller outparcels along Cicreo Avenue, including the former Harley Davidson store that has a date with the wrecking ball.
“We’ve acquired the parcels required to the development,” Village Manager Larry Deetjen said. “We’re still working with a couple of owners."
The village will continue to own the land, while Hamilton Partners will assume the costs to redevelop the property from the ground up, under the guidance and approval by the village of the project’s aesthetics and design.
Hamilton plans to redevelop the parcel with an upscale grocery store, national “mid-box” retailers, restaurants and other small shops, and a corner park and water feature.
The developer sports an impressive portfolio of 30 retail properties that it has built around the Chicago region and Salt Lake City, UT.
The village and developer would jointly share in the return on investment. Oak Lawn will also get a portion of the rent income and property tax revenue, and all of the sales tax revenue.
“TIF monies are being used for land acquisition and infrastructure improvements,” Deetjen said. “Hamilton will internally and conventionally provide equity and bank financing to build the buildings and related improvements.”
The debt will be paid with revenues over and above TIF debt going back to the general fund, and other taxing bodies upon projection completion and all expenses paid, Deetjen said.
Because Oak Lawn owns the property, the village has flexibility to sell the retail development to Hamilton, or share in the profits selling it to third party when market rates improve.
“We structured the deal very methodically and avoided eminent domain,” the village manager said. “Everyone has been treated fairly and was given options.”
Deetjen said that historically the village board was financially involved in the original development that included the Kmart and a Dominicks supermarket. In 1976, the village rerouted Stony Creek and permitted the wetland to be asphalted over.
“A portion of what is asphalted will be replaced with small park and water features, with restaurant tenants around the water,” Deetjen said.
Propsective upscale retailers and restaurants have breezed through village hall to view the propsective site.
"Residents can expect summer 2013 to start seeing construction on some shops but not all" on the corner, Deetjen said.
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