Concordia Realty completed a major redevelopment of Cermak Plaza located at the Southeast Corner of Harlem Avenue (IL Route 43) & Cermak Road (22nd Street) in Berwyn Illinois between 2010 to 2016.
The redevelopment included the following: a new award winning facade featuring LED lighting and prominent towers; re-tenanting or expanding existing tenants within more than 75% of the shopping center; demolition and new construction for 40% of the property; removal of 14 underground storage tanks (some leaking); removal of all the asbestos containing materials from the property; reconstruction of the parking lot and rear delivery drives; adding underground water detention; adding landscaped islands for beauty, improved traffic flow and water retention; new lighting and light poles throughout the parking area and new building feature lighting; adding 12 wind turbines that offset CAM electrical demand and reduce electric expenses.
The work was paid for with three (3) tranches of debt financing plus a sales tax rebate from the City of Berwyn to accomplish the work.
Cermak Plaza’s website can be found here: http://cermakplaza.com
The details of how this was all acheive are below:
The early 2000’s were a rough spot for Cermak Plaza. One of the main tenants, Service Merchandise (60,000 sf) went into bankruptcy. Because of the way Cook County collects its real estate taxes this particular location was one of the last to be freed from extensive litigation over amounts due. Circuit City was liquidated in bankruptcy a few years later. This left a large vacancy in the middle of the shopping center for a few years and a 33,000 square foot vacancy along Cermak Road.
The center was also looking tired. It had a renovation in 1994 – 1996 however the design used was straight out of the 1980s so did not age well. Again, the location was outstanding however the property began to face intense competition in its trade area with new centers being developed to the east in Cicero, Illinois and west in Broadview, Illinois.
In 2007, Concordia Realty began preparations for a total revitalization of the the shopping center that would bring new occupants back to this local landmark. Ethos Workshop, Ltd. was commissioned to design a dramatic new façade. The commission was to conceptualize an architectural design that paid homage to the original 1950’s Mid-Century Modern design and history of pop art displayed at Cermak Plaza. The redevelopment included a complete façade upgrade including a series of structural steel wings that are illuminated at night with Lumenpulse RGB fixtures LED fixtures that give a nightly light show above the storefronts. The façade now has an artistic design aesthetic with modern, energy saving clean technology, as well as long product life and low maintenance costs.
Once the design drawings were approved, Town Builder Studios was tasked to design the site work for the project. To offset the angles and compliment the unique facade design, a circular theme was implemented with landscape planters, colored accents in the concrete sidewalk, ADA transition mats, attractive spheres for delineating the parking drive lane from sidewalk and even groups of painted circles for the crosswalks (Cermak Plaza has been known for innovative, artistic crosswalks http://cermakplaza.com/art/ ).
The solution also takes the greener element of LEDs a step further; Cermak Plaza powers the RGB fixtures and common area lighting with twelve (12) wind turbines that cultivate wind energy from the edge of the Cermak Plaza’s parking lot. In combination with the energy efficient lighting, the 35 foot tall turbines are also an artistic feature that conveys a memory of the kinetic art that formerly decorated the property. The turbines generate 1,500 to 2,500 kilowatt hours of electricity each year.
Concordia started Cermak Plaza’s turnaround by moving Walgreen’s to a never developed out-parcel, backfilling that space with K&G Menswear, expanding an already outstanding Marshalls to 33,000 square feet and replacing a vacant Circuit City with Office Depot and Dollar Tree.
In 2011 one third of the shopping center was demolished and a new pad prepared for a 93,000 square for Meijer Marketplace ground lease. Meijer opened in 2012 and the existing retro 1950’s neon pylon signs were completely refurbished to their former glory.
As a part of the redevelopment the front and east side parking areas were also redesigned with additional landscaped islands to improve traffic safety and beautify the center curb appeal. In addition, a StormTrap underground detention system was installed under the east parking area to divert stormwater from the MWRD system.
The redevelopment has also included removing all of the known asbestos containing material from the property, removing more than 14 underground oil storage tanks and remediating soil contaminated with petroleum and perchloroethylene products.
In addition to the new Walgreens out parcel, Longhorn was built on vacant parking lot along with McDonalds being expanded and rebuilt. The newly created and expanded outparcels have increased base rental income by $317,186 per year which does not include the increased common area maintenance payments also now collected.
The final phase included demolishing 26,000 square feet of existing shopping center on the east end of the property to build a 27,000 square foot Ross Dress for Less and expanding a 4000 square foot end cap for an Avenue store. The new Ross store opened in 2015 and Avenue opened in 2016.
The redevelopment has created a beautiful, landmark property that is safer, cleaner, more functional and sparked a revitalization of the surrounding business district. The investment has paid off with a 312% increase in Net Operating Income (NOI) and Cermak Plaza is currently 100% leased.
Below are some of the redevelopment highlights and the team members that helped Concordia complete the redevelopment:
- Secured life company financing with the assistance of Matt Schoenfeldt and Jay Marshall of HFF in 2009 with 35% vacancy !!!!!!
- Ground leased 93,000 square foot pad to Meijer for the 1st new ground up Meijer Market and 1st ground lease in Meijer Co. history – lease transaction attorney David M. Barry (a 20+ year relationship)
- relocation of tenants
- demolition of existing buildings – contracted to long-term partner Robinette Demolition
- environmental remediation and State of Illinois compliance – long-term partners Pioneer Environmental and Eleni Kouimelis
- Engaged OZ Engineering for geotech related to stabilizing poor soils and delivering specified loads for pad
- Engaged SPACECO, Inc. to complete civil engineering for utilities and common area upgrades
- Worked with City of Berwyn on zoning, permitting and sales tax rebate to Meijer for their construction costs
- Relocated Walgreens to 16,500 square foot outparcel
- Expanding Marshalls into vacated Walgreens to create a 33,500 square foot store for TJX
- Leased remainder of vacated Walgreens to K&G Fashion Superstore a division of The Men’s Wearhouse
- Demised a 33,000 square foot vacant Circuit City into 2 spaces:
- Back-filled Dollar Tree space with Gap Outlet store
- Obtained approvals from McDonalds and anchor tenants to add additional outparcel
- Expanded McDonalds parcel and extended their lease term with additional rent. McDonalds completed a tear-down redevelopment of their restaurant.
- Ground lease final out parcel land (it had been vacant parking lot for close 60 years) to Longhorn Steakhouse (Darden Restaurants, Inc.)
- Completed a 27,000 square foot lease with Ross which required the delivery of a “warm shell”.
- Worked with HFF and lender to secure additional $4 million financing to complete project.
- Engaged PFDA Architects, Inc. to design shell. PFDA had worked extensively with Ross and knew their requirements and approval processes cutting time for delivery.
- Awarded contract to BuilTech, LLC general contractors. The project ran into several major problems from unsuitable soils to underground water detention system – BuilTech delivered ON TIME. Great contractors!
- Negotiated a Tax Increment Financing agreement with the City of Berwyn for an additional $1 million to make the project work.
The architectural design, lighting combination and parking lot improvements has created a new landmark in Berwyn Illinois. In 2016 Cermak Plaza was recognized by the Chicago Board of Realtors with their Award. The redevelopment has paid off for Cermak Plaza investors and it has been a catalyst for a broader renewal in the adjacent areas of the City of Berwyn.
Site Plan before Redevelopment
Site Plan after Redevelopment
Pictures After Redevelopment
Pictures Before Redevelopment