Mr. Hayner said this is a Public Hearing regarding the redevelopment of the Circuit City building by demolishing the existing building and constructing a new facility. He said construction of the new building will start in Spring of 2012 and should be completed in 2013. He said they are requesting the issuance of Midwestern Disaster Area Bonds to assist in the redevelopment and construction of a Macy’s Department Store at Gurnee Mills Mall.
Mr. Bill Hammer introduced himself to the Board representing Simon Property Group and then asked Randy Ebertowski the General Manager of Gurnee Mills to briefly update the Board on current projects underway at the mall.
Mr. Ebertowski briefly explained Gurnee Mills is currently on schedule to complete phase two of a three year plan to update entrances to the mall, restrooms in the mall and resurface the parking lot around the mall.
Mr. Hammer gave a brief presentation to the Board stating he is very excited about Macy’s bringing a 130,000 square foot store to Gurnee Mills. He explained to the Board that Macy’s will attract other types of stores that might not otherwise consider Gurnee Mills as a possible location. He said the store will also bring in many new employment opportunities and will increase sales tax revenue.
Trustee Park asked what the estimated sales per square foot Macy’s will bring in.
Mr. Hammer said approximately $300 per square foot. He said this store will be smaller than a traditional Macy’s store but will be more efficient by not holding as much inventory on site.
Trustee Park asked if Macy’s will tailor the merchandise to the demographics.
Mr. Hammer said he has not talked with them about that but the expectation is this will be a full line top end store.
Trustee Park asked if they plan on adding square footage to the mall.
Mr. Hammer said square footage in the mail is not changing but there will be a substantial different look with renovation and upgrading.
Trustee Park asked what percentage of the mail will have the new look.
Mr. Hammer said he doesn’t have that information.
Trustee Schwarz asked how many different projects Macy’s is working on.
Mr. Hammer said 6-8 projects nationally.
Trustee Garner asked when construction will start.
Mr. Hammer said the first phase of the project is the removal of the former Circuit City building. He said once it is removed we would like to turn over the pad to Macy’s in April 2012 and they will begin construction immediately.
Trustee Garner stated the $10 million bond is needed to kick off the project and asked what the total cost of the project is estimated to be.
Mr. Hammer said the total project will cost $20 million and explained.
Trustee Garner asked if we approve this how soon the project will start.
Mr. Hammer said immediately.
Trustee Garner said he visited the site and it looks like they have already started.
Mr. Hammer explained that some demolition has already started.
Trustee Garner said Simon must be pretty confident this Bond will pass.
Mr. Hammer said yes.
Trustee Garner said it seems Simon must then be prepared to take on the $20 million itself.
Mr. Hammer said no, Simon would not be able to afford this project without Village assistance.
Trustee Garner asked if Macy’s would then be lost.
Mr. Hammer said yes.
Trustee Garner asked if Mr. Hammer understood his confusion since work has started then they must already have the $20 million for the project.
Mr. Hammer explained he would not be here tonight if it was not critical to have Village assistance. He said we cannot go forward without Village participation and demolition will stop.
Trustee Garner asked what would happen if the Village takes out a $10 million dollar bond and store is not completed.
Mr. Hammer said once the Village commits to the bond Macy’s will sign a 25 year lease which obligates them to build and operate at the location.
Mr. Hayner briefly explained how bonds work, stating payment would not be made to Simon until the work has been completed and costs justified.
Mr. Hammer said he has been involved in over 400 projects and doesn’t recall any failures. He said Macy’s is a credit worthy company.
Trustee Morris asked how large the Vernon Hills store is.
Mr. Hammer said that store is a former Marshall Field’s and he believes the store is about 180,000 square feet.
Trustee Morris said Vernon Hills is only about a half hour drive away and asked how this store will be different from that location.
Mr. Hammer said they will probably be very similar adding they would not build another location if sales only transferred. He said this area is considered a different trade region than Vernon Hills.
Trustee Morris asked what the payback time is for the bond.
Mr. Hayner said 33 years if it is straight out and explained.