The Evanston Plaza shopping center has been sold for a reported $39 million to A2Z Real Estate Inc. based in Johnstown, Pennsylvania.
The selling price is nearly 2.5 times the $16 million the seller, Azzurri of Evanston, owned by the family that runs the Valli Produce supermarket in the center, paid for the center at Dempster Street and Dodge Avenue in 2014.
That price, in turn, was nearly double the $8.1 million Bonnie Management had paid to acquire the property in late 2011, only to see the former supermarket tenant, Dominick’s, close in 2013, leaving the plaza largely vacant.
A former owner, Joseph Freed & Associates LLC had lost the property in a foreclosure auction in May 2011, not long after the center’s second-largest tenant, an AJ Wright store, closed as the TJX companies shuttered that chain nationwide.
Bonnie attracted Valli to take over the Dominick’s space, and buy the plaza, but had little luck in filling other vacant stores.
In the meantime the City of Evanston created a tax increment finance district to support revitalization of the plaza and provided a $2 million, 10-year forgivable loan to help fund the remodeling of the former Dominick’s store for Valli’s use.
At Thursday evening’s 2nd Ward meeting, where the shopping center sale was discussed, some residents asked whether the city would be getting that money back.
Alderman Peter Braithwaite, 2nd Ward, said that’s not how the agreement was structured — only if Valli had shuttered the store within 10 years would a portion of the money have had to be returned.
He added that Valli has signed a 60-year lease with the new owners of the plaza — indicating their strong desire to keep the store open.
Paul Zalmezak, the city’s economic development manager, said he’s been told Valli will use the funds from the sale of the center to reduce mortgages on their other grocery stores in the region.
Valli has been paying more than $1 million a year in property taxes on the plaza in recent years with the property assessed as having a market value of $17.7 million.
Zalmezak said that, with the latest sale, the city can expect to see the property tax revenue increase substantially.
During its ownership of the property Valli also managed to fill most of the vacant stores in the plaza with new tenants.
A new leasing brochure from A2Z indicates only three small storefronts are still vacant in the center.
Zalmezak says he believes the increasing occupancy levels at the center have led to a substantial increase in sales tax revenue for the city in recent years, but he said detailed information about that was not immediately available.