Woodfield Village Green Schaumburg Illinois

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VOLUME 25 NUMBER 3 JANUARY-MARCH 1995

RETAIL WOODFIELD VILLAGE GREEN SCHAUMBURG, ILLINOIS

PROJECT TYPE

A 623,000-square-foot power retail center featuring value-oriented retailers, including 11 anchor tenants and 64,000 square feet of smaller shops. Located just north of Woodfield Mall, Woodfield Village Green features brick exteriors, canopies, and traditional architecture to create an attractive, villagelike shopping experience.

SPECIAL FEATURES

Big-box retailers Pedestrian amenities Brick exteriors Extensive landscaping

DEVELOPER

Homart Community Centers A Division of Homart 55 West Monroe Street, Suite 2700 Chicago, Illinois 60603-5060 312-551-5100

ARCHITECTS

Solomon, Cordwell, Buenz & Associates, Inc. 57 West Grand Avenue, Suite 800 Chicago, Illinois 60610 312-245-5250

Norman A. Koglin & Associates 30 West Monroe Street, Suite 610 Chicago, Illinois 60603 312-782-6853

MANAGEMENT

Sigma Commercial Realty, Inc. 1320 Tower Road Schaumburg, Illinois 60173 708-885-5674 GENERAL DESCRIPTION

Woodfield Village Green is a power retail center with a creative and successful approach to this new form of retail development. With a total of 11 anchor tenants and 64,000 square feet of small tenant space, it is typical of a new breed of strip shopping center that is made up largely of major anchor tenants, with only about 8 to 12 percent of gross leasable area (GLA) reserved for smaller tenants.

Woodfield Village Green has a total of 623,000 square feet of gross leasable area on a 62.8-acre site in Schaumburg, Illinois, an affluent Chicago suburb. The developers carefully selected tenants to offer shoppers a broad mix of stores within a value-oriented center. The shopping center introduced three retailers—Today's Man, Strouds, and Nordstrom Rack—to the Chicago market. It also set a strong precedent for power center design, successfully incorporating these large stores into a design concept that avoids the long, blank, and often unattractive walls and expanses of dead storefront space often associated with these projects.

THE SITE AND DEVELOPMENT PROCESS

Woodfield Village Green is owned by Homart and was developed by Homart Community Centers, the community shopping center development and management division of Homart. Established in 1989 to design and construct community centers nationwide, Homart Community Centers has developed, currently owns and manages, or has under construction more than 7.7 million square feet of community and power center space. Its goal is to own and develop institutional-quality community centers and power centers—of approximately 300,000 square feet or larger—in large diversified markets throughout the United States. These centers incorporate premier elements such as high visibility, strong location, top tenants, and high-quality architecture, and are expected to be dominant within their trade area. Woodfield Village Green was the eleventh power center started by Homart and is the second largest the company has undertaken to date.

Woodfield Village Green is located on a flat site at the intersection of Golf Road and Meacham Road, just north of the entrance to Woodfield Mall, a regional shopping center anchored by Marshall Field, JC Penney, Nordstrom, Sears, and Lord & Taylor. On the east side, the site is bordered by mid-rise office structures, on the west side are office and industrial uses, and to the north are office and research uses. The site is considered a premier retail location, and the developer paid top dollar to acquire it.

The previous owner of the site was Unocal, which had master planned a total of 180 acres in this area of Schaumburg for residential, office, and retail uses. To develop the power center, Homart not only had to change the land use from B-3 (office) and B-5 (planned regional center) to retail, but also had to accept many of the obligations that were part of Unocals original annexation agreement. "

For example, Homart had to provide stormwater retention for its own site and several adjacent parcels, provide right-of-way improvements to Central Park Boulevard on the east edge of the site, pay a traffic impact fee as well as impact fees for village services such as police, pay an exaction for off-site widening of the Golf and Meacham Road intersection, and provide funding for part of a possible Illinois tollway interchange at Meacham Road.

The project was built on a fast track, in part to accommodate an aggressive opening schedule for those anchor retailers entering the Chicago market. Planning and leasing started in June 1992; the site was purchased, approvals were obtained, and construction started in May 1993. Approximately one-third of the center (250,000 square feet in Phase 1a) opened in November 1993, with another 250,000 square feet in Phase 1b opening in June 1994. The center has one outparcel of 2,000 square feet and one pad of 106,238 square feet still for lease. A Pace warehouse club was planned for the latter site, but the retailer pulled out of the Chicago market, the store was not constructed, and the lease was terminated. Since the center is profitable, Homart is content to wait for just the right tenants. PLANNING AND DESIGN

The village of Schaumburg wanted Homart to create an open-air shopping center with the pedestrian feel of an older Midwestern village downtown. As a result, the center has a more villagelike appearance than most power centers. The slate and brick masonry structure features several different brick colors, a variety of different arch elements and facade designs, varied setbacks, and a carefully articulated roofline to create a look that is inviting and attractive. A 60-foot-high clock tower is the focal point.

The developers and designers arranged the center to encourage shoppers to visit numerous stores in one trip. Smaller shops have been carefully grouped next to anchors they can benefit from, and the walkway along the front of the center has been designed to entice shoppers to explore this frontage. The center features lush landscaping, covered walkways, benches, and attractive architecture to provide interesting walking paths and pedestrian experiences that encourage crossover shopping.

The center is built in a roughly L-shaped configuration with frontages on two main thoroughfares. The main frontage for the center is along Golf Road, and seven of the current anchors face this road in a linear fashion; Builders Square, Today's Man, and a remaining vacant pad face Meacham Road. Four outparcel structures sit along the Golf Road frontage, containing the California Pizza Kitchen restaurant and a Circuit City store each in freestanding structures, with Schlotzsky's Deli, Ben and Jerry's Ice Cream, Starbucks Coffee, and Strouds (linens) in one grouping and Jewelry 3, Performance Bikes, Doc Martens, Funcoland, and Casual Male in the other.

Access to the center is excellent, with two entrances off Golf Road and two off Meacham Road (and a third planned off Meacham). Parking spaces total 3,082, which is a ratio of five spaces per 1,000 square feet of GLA.

MANAGEMENT AND MARKETING

Founded in 1959, Homart Development Co. is the commercial real estate development arm of Sears Roebuck and Co., with more than 87 million square feet of retail, office, and multiuse space nationwide. Since its founding, Homart has built 70 regional malls and still has an ownership interest in 30 regional malls.

For each community center that it develops, Homart assembles a project management team: a development director, who is responsible for overall project management, budgeting, construction, leasing, acquisition, and development; a director of design and construction, who is responsible for hiring and managing architects, engineers, consultants, and contractors and overseeing construction and tenant coordination; and a leasing representative, who is responsible for leasing, lease negotiation, and project marketing. In addition, each team has the support of other Homart personnel who provide internal finance, legal, and asset management expertise exclusively to community center projects.

Although Homart financed both land purchase and construction primarily from internal corporate sources, it will not proceed with a project unless 80 percent of the tenant space is preleased and the entitlements are in hand.

The market for the center includes over 315,000 people within a five-mile radius of Woodfield Village Green with an average household income of nearly $59,000. On the supply side, the Chicago market has witnessed tremendous growth in big-box power retailers, creating many new development opportunities in the power center sector; a total of 27 new retail projects—shopping centers as well as freestanding stores—either opened or were under construction in 1994.

Leasing took 18 months, in part because Homart was looking for just the right tenant mix. Moreover, managing the leasing process was time consuming because most of the anchor tenants had special lease requirements that needed to be met. From a property management standpoint, the phasing program presented a challenge, requiring the owner to segregate the construction from the shopping center traffic after one-third of the center already had opened. Homart contracts out its property management services to one outside firm that understands Homart's development and management philosophy.

EXPERIENCE GAINED

In power centers, it is important to cluster smaller tenants between anchor tenants with complementary product lines to encourage walk-by traffic and crossover shopping. Power centers should not be simply a collection of big-box retailers with nothing between them. A prime site is critical to the success of power center projects, and it is worth waiting to acquire the right high-profile site. This one element allows the developer to attract the best tenants and to get top sales from all of the tenants. The length of time required to negotiate leases is proportional to the number of anchor tenants. Each of the anchor tenants typically has its own corporate specifications and lease forms that must be accommodated. PROJECT DATA

LAND USE INFORMATION

Site Area: 62.8 acres Gross Leasable Area Planned (GLA): 623,000 square feet Gross Leasable Area Completed (GLA): 514,700 square feet Floor/Area Ratio (FAR): 0.24 Number of Levels: 11

LAND USE PLAN Acres Percent of Site

Buildings 15.1 24.0%

Paved areas (surface parking and roads) 32.0 51.0

Landscaped areas 15.7 25.0

Total 62.8 100.0%

DEVELOPMENT COST INFORMATION (TO DATE)

Total Development Cost: $60,000,000 Total Development Cost per Gross Square Foot (Phase 1a/1b): $116.57

ANNUAL OPERATING EXPENSES (1994) Taxes $2,580,000

Insurance 90,000

Services, maintenance, 315,000 janitorial

Utilities 56,000

Management 134,000

Total $3,175,000

RETAIL INFORMATION Total GLA Number Percent Percent Classification (Square of Stores of Total of GLA Feet)

General 1 3.6% 50,000 8.0% merchandise

Food 5 17.9 16,600 2.7

Clothing and 8 28.6 140,000 22.5 accessories

Shoes 3 10.7 7,000 1.1

Home appliances/ 2 7.1 35,300 5.7 music Building materials/ 1 3.6 109,800 17.6 hardware

Hobby/special 5 17.9 96,000 15.4 interest

Jewelry 1 3.6 5,000 0.8

Gifts/specialty 1 3.6 30,000 4.8

Other retail 1 3.6 25,000 4.0

Vacant pad sites 2 - 108,238 17.4

Phase 1a/1b total 28 100.0% 514,700 100.0%

Annual Rents: $20 to $32 per square foot (shops); $12 to $18 per square foot (anchor tenants) Average Length of Lease: 5 to 10 years (shops); 15 to 20 years (anchor tenants) Typical Lease Provisions: No kickout; no exclusive; no co-tenancy Average Annual Sales: $200+ per square foot

ANCHOR TENANTS Builders Square 109,800 square feet

Service Merchandise 51,320 square feet

Sports Authority 41,968 square feet

Marshalls 40,000 square feet

Nordstrom Rack 40,000 square feet

Circuit City 33,350 square feet

Borders Books 30,000 square feet

Today's Man 30,000 square feet

PartiGiant 25,000 square feet

Office Max 23,500 square feet

Strouds 15,000 square feet

Total 439,938 square feet

Note:

1Approximately 1.5 percent of the center is devoted to a second level at Borders Books.

DEVELOPMENT SCHEDULE

Planning Started: June 1992 Site Purchased: May 1993 Approvals Obtained: May 1993 Construction Started: May 1993 Leasing Started: June 1992 Phase 1a Completed: November 1993 Phase 1b Completed: June 1994

DIRECTIONS From O'Hare International Airport: Take Interstate 90 west to Route 53/355 south, and proceed to the Golf-Higgins exit. Turn west on Woodfield Road, and follow it to Meacham Road. Turn north on Meacham, and follow it to Golf Road. The center is on the northeast corner of the intersection of Golf and Meacham roads.

Driving Time: 15 minutes in nonpeak traffic.

The Project Reference File is intended as a resource tool for use by the subscribers in improving the quality of future projects. Data contained herein were made available by the Development team and constitute a report on, not an endorsement of, the project by ULI - The Urban Land Institute.