The Huntley Outlet Center is back in the news this month. At least some of the new developments are continued bad news for the struggling factory sales facility.
First, an area real estate asset management firm has suggested several hypothetical reuses of the 75-acre outlet mall site. One of them involves a potential limited-service or extended stay hotel.
Second, the Village of Huntley says it is weary of receiving no responses to its repeated attempts to contact Simon Properties, owner of the mall structure, regarding maintenance problems at the center. It has taken the owner to court. The Village has formally cited Simon for violating village ordinances, specifically for inadequate maintenance and care of the property. An initial hearing was scheduled in a McHenry County court on March 21.
According to Huntley Village manager Dave Johnson, another recent incident of mall deterioration precipitated the legal action.
“One of the light standards on the south side of the center’s parking lot near the tollway rusted out and fell over recently,” he said. “No one was injured and there was no other damage, but it was kind of the last straw for us to get some action from the owners. We sent one of [the Sun Day’s] recent articles about injures there to bolster our case in court.”
The mall has been for sale for several months. Johnson said he doesn’t have any definite information about the sale progress, but it appears that no sale deal is imminent.
“We retained Gruen Gruen and Associates, an area real estate research firm, to give us some preliminary ideas about alternative reuses of the site,” Johnson said. “The intent is to discipline the consideration of potential reuse or redevelopment options by identifying the likely feasibility of typical development options.”
In a 21-page report to the village, Gruen Gruen said, “One developer has already approached the village indicating potential interest in acquiring the site, demolishing the existing improvements, and creating “pad sites” to re-sell to developers for the development of industrial, commercial, and hotel uses.”
The 75-acre center site is located on Freeman Road, between the Huntley auto mall and RV Industries on the west and north, the new 750,000-square-foot Weber distribution center on the east, and the Jane Adams tollway on the south. The mall has the capacity for about 70 retail facilities, but less than 30 are occupied. Two Sun City women were injured when they tripped and fell on uneven sidewalks in the center in the last two years. Only three new stores have signed leases in the last five years.
Repeated attempts by both the Sun Day and village to contact Simon Properties for comment or information on the center’s situation have been ignored.
Gruen Gruen’s report does not recommend or suggest that hotel, industrial or commercial uses are definitely feasible, either short or long-term.
“We asked developers and real estate experts how much could a prospective developer/investor pay for land, develop the identified prototypical use options, and earn a rate of return commensurate with the risk,” Gruen’s report said.
Regarding a hotel, the firm said, “Interviews with developers and brokers, and the proximity of the site to Interstate 90 and the four-way interchange, suggest that a limited-service hotel use may be a feasible candidate for redevelopment. Our initial real estate economic analysis of a prototypical 120-room hotel on two acres of land is consistent with that hypothesis. We estimate that this type and scale of use may be able to support a land value (cost) of about $9 per square foot, assuming a market deep enough to generate room night demand needed to sustain a new hotel. Such a hotel requires only a few acres of land.”
In the last decade, the Village of Huntley has prospered in this area, with many foreign companies and local enterprises locating facilitie4s near the tollway, along the Route 47 corridor, and in the town square area At the same time, the outlet center has gone in the other direction, even though several stores in the mall have said their business activity has been positive.
