The upscale shopping mall Westfield Old Orchard in north suburban Skokie is about to undergo a $100 million transformation, the most far-reaching in its 66-year history. The owners plan to demolish and replace an empty Bloomingdale’s with hundreds of apartments and a new town square where residents and shoppers will attend outdoor concerts, farmers markets and other events.
Many suburban retailers saw customers return in big numbers this year, but e-commerce continues to squeeze large department stores, so it’s time for malls like Old Orchard, opened in 1956, to change with the times, according to Stephen Fluhr, senior vice president of development for owner Unibail-Rodamco-Westfield.
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“The strategy we’re rolling out here, we’re rolling out on a national basis,” he said.
The company operates 80 shopping centers and found that many traditional tenants such as Bloomingdale’s no longer need as much space, Fluhr said. He envisions filling much of Old Orchard’s vacancy by shrinking the amount devoted to stores in favor of new homes, restaurants, medical and wellness facilities and perhaps a hotel, all surrounding the new community gathering place, essentially creating a new downtown for Skokie.
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“In order to get beyond (the vacancy) and have a 24/7 environment, you have to introduce other uses to the site,” he said. “A lot of this is about building a community that people will call home.”
The challenge presented by e-commerce to bricks-and-mortar stores isn’t going away. Online sales in the third quarter of 2022 hit $265 billion, according to the U.S. Department of Commerce, 3% higher than for the second quarter and 14.1% of total sales.
And with apartment rents growing significantly over the past few years, it’s likely other suburban shoppers will see their local malls launch redevelopments similar to Fluhr’s plan for Old Orchard, according to John Melaniphy, director of economic development at village of Niles.
“None of the malls are immune,” he said. “Even Woodfield Mall in Schaumburg has two vacant department stores and is looking at adding residences. It’s always had strong occupancy and been considered one of the most highly productive malls.”
Bloomingdale’s did not abandon the 1.5 million square foot Old Orchard. After exiting its three-story, 200,000-square-foot location in 2022, last month it opened a new spot in the mall called Bloomie’s, about one-fourth the size and focused on providing customers with the most popular items.
“They have been blowing the doors off,” Fluhr said. “The store has been packed since it opened. They are doing retail in a new way, and sales are not suffering.”
Lord & Taylor also shuttered its Old Orchard location, but Fluhr said rather than demolishing it in favor of apartments, the company plans to gut and redevelop it next year into three or four smaller outlets selling luxury furniture and apparel or providing shoppers with new entertainment options.
“You won’t recognize that box when we’re done with it,” he said.
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Unibail-Rodamco-Westfield will in the coming months select a multifamily developer for Old Orchard, Fluhr added. After that, it will present to Skokie residents more detailed plans for the new apartment community. The company hopes to then secure village approval and get underway in 2024, opening about 350 apartments on the former Bloomingdale’s site by 2026, as well as debuting the town’s new public park. And that’s just phase one.
“There will be plenty more to come,” he said.
