Spring Hill owner says deal to sell mall to West Dundee is close
The New York-based company that owns Spring Hill Mall says it is close to reaching a deal to sell the shopping center to the village of West Dundee.
Kohan Retail Investment Group representatives and village officials spoke Wednesday about the potential sale. They plan to exchange terms for the deal in the next week or so.
"The conversation went well," said West Dundee Village President Chris Nelson, who was not on the conference call but was briefed about it by the village staff. "Since we last talked to them, they have embraced the idea of selling it to us."
The mall, which is in West Dundee and Carpentersville, has seen declining occupancy rates in recent years with the closure of key anchors like Macy's and Sears. West Dundee officials estimate occupancy at about 25%, while Kohan estimates it at 40% to 50%.
Earlier this year, West Dundee trustees approved purchasing the shuttered Sears store for $2 million and the Macy's store for $1.25 million. The village has not yet closed on those deals.
Trustees also created a new tax increment financing district for the mall to entice developers with property tax money that could be steered into redeveloping the mall.
Village officials said they don't expect a revival of the mall. Instead, they anticipate a mixed-use development that includes residential, retail, entertainment and other uses.
Nelson has said purchasing the mall would help untangle some roadblocks - such as multiple property owners - to redevelopment.
"I would say we're close to a deal," said Michael Kohan, founder and CEO of Kohan Retail Investment Group.
Kohan on Wednesday confirmed his company was in negotiations with only West Dundee. The company recently moved to month-to-month leases, which was a request from West Dundee, for any new tenants at the mall, Kohan said.
Neither side disclosed details of the negotiations.
Despite West Dundee's recent actions, news of a possible sale to the village took some by surprise.
"It's shocking," said Denise Richardson, who manages Spring Hill Mall and recently was appointed to the Carpentersville village board. "But I guess they know what they're doing."
Carpentersville officials have said they would not stand in the way of West Dundee's purchase of the mall. Carpentersville also is not interested in purchasing any part of it.
Though the bulk of the mall is in West Dundee, roughly 15% of the property, including the shuttered Carson Pirie Scott store and Kohl's, is in Carpentersville. If West Dundee finalizes a deal with Kohan, it would include the portion in Carpentersville.
Kohan has not amended any of its existing leases within the mall. However, as leases expire, they are being switched to month-to-month agreements, Richardson said.
National retailer Aeropostale informed mall management this week it would be closing the Spring Hill Mall store by July 26, Richardson said.