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Can 'demalling' salvage Orland Park Place?

The new owner of a mall that "should never have been built" is making a last-ditch effort to save it -- by demalling it. After nearly 20 years of losing money, Orland (Ill.) Park Place is being redeveloped into a 750,000-square-foot open-air project by developer Hiffman Shaffer Associates (HSA).

"Conceptually, we are eliminating the mall concept of having common interior walkways to access stores. It will be a completely reconfigured open-air promotional power center," said Tim Blum, senior vice president and project manager for Chicago-based HSA.

Orland Park Place is located across from the 1.2 million-square-foot Orland Square, owned by Indianapolis-based Simon Property Group, and anchored by Marshall Field, Carson Pirie Scott, JC Penney and Sears.

Opened in 1980, "Orland Park Place simply never should have been built, because with Orland Square across the street, there was no need," said George Capper, vice president of retail properties with the Oak Brook, Ill., office of real estate broker CB Richard Ellis. "At the time it opened, the joke was, 'There's going to be a grand closing.'"

Orland Park Place was originally built with the idea of getting retailers into the area that could not get space in the much larger and already established Orland Square mall, which opened in 1976, Capper said.

"It quickly succumbed to competition from Orland Square; it was losing customers and then its tenants," said Capper.

The center changed hands several times, and for the past few years -- except for anchors Montgomery Ward, Kohl's and Sportmart -- has been almost 90% vacant. Last year, Chicago-based HSA bought the mall, including 750,000 square feet of property, and recruited Homewood, Ill.-based builder Graycor to begin a $32 million redevelopment project. The center is expected to re-open in November.

By opening day, the redeveloped Orland Park Place will be 70% leased, with leases ranging from 10 to 15 years. Sportmart, which was the first tenant to open in July, moved from its former 35,000-square-foot space to a new 45,000-square-foot location within the new complex. Kohl's, which currently occupies 75,000 square feet, will add an additional 32,000 square feet; Montgomery Ward will retain its 150,000-square-foot space.

The redeveloped mall will offer a tenant mix that will "complement, rather than compete" with the super-regional mall," said Blum.

New tenants will include Old Navy, which will occupy 28,000 square feet; Barnes & Noble, with 24,000 square feet; and Bed, Bath & Beyond, with 55,000 square feet. Other retailers with signed leases include: Cost Plus, Wickes Furniture, DSW Shoe Warehouse, Gateway Computer and Hallmark.

Two of seven available outparcels have been leased to an Italian restaurant, Buca DiBeppo, and furniture store Walter E. Smith. Other outparcels are slated for entertainment components.

The project is being partially financed through tax-increment financing (TIF), a financial tool in which a portion of property taxes are put into a fund to pay for infrastructure costs in that particular community. (See related story, page 1.)

Tenants will have individualized signage in the two-level center, with glass-enclosed entryways. The new configuration will allow second-level stores to have their own first-level entrances.

"Basically, if you could envision a typical mall which is a long building with a common area, we tore the side off the building; filled in all the openings on the upper floor," said John Onufrock, construction manager for Graycor. "Then we put an addition on the side we tore open and added to that side. That became the front for the various new tenants. Each store will have an exterior entry."

Orland Park Place will serve a population of 146,000 people, which will expand to 153,000 by 2002, according to HSA. The 1997 estimate for households in the area is 60,284, expected to grow to 73,213 by 2002. The 1997 estimated per capita income is $32,273, and the estimated average household income is $81,217.

"The developers for Orland Park simply took an old dog and made it into a different animal," said Capper. "Since Orland Park first opened, the population has exploded. Now there's a market for both centers."