Evanston’s Dempster Dodge Shopping Center is expected to gain a new clothing store this summer.
Steve & Barry’s, a national clothing retailer with a dozen stores in the Chicago area, is planning to lease a 38,000-square-foot space once occupied by the Frank’s Nursery chain.
The city’s Economic Development Committee Wednesday approved an agreement to let the shopping center owner, the Joseph Freed Company, recoup $760,000 it plans to spend to prepare the space for the new tenant from a share of city sales tax revenue to be earned by the development over the next 22 years.
That agreement extends an existing sales tax sharing agreement with Freed established in 2000 that was scheduled to expire in 2020.
The Evanston Plaza development has long been plagued by high vacancy rates, and the arrival of Steve & Barry’s would cut the amount of vacant space by more than half, Michael Zukerman, a development manager for Freed, told city officials in a letter.
Steve & Barry’s, which recently operated a store in the now demolished Saks Fifth Avenue building at Old Orchard, negotiated deeply discounted rent at the plaza from Freed, in addition to the agreement to have the developer pickup up the cost of renovating the space.
Freed officials told the committee that A.J.Wright, an existing clothing retailer in the plaza, doesn’t object to the new competition, saying the two stores have co-existed successfully at other shopping centers in the region.
A provision in Wright’s lease would give it the option to leave the center given the high current vacancy rate there.
After viewing photos of the Steve & Barry’s design shown the committee, Alderman Ann Rainey, 8th Ward, said, “It looks like a fabulous store.”
Tax giveaway to lure a bankrupt company?
Today the Sun Times is reporting that Steve and Barry’s have retained bankruptcy attorneys and are planning on shutting 100 stores. The
Wall Street Journal reports that the company is going to file for bankruptcy this week.
How is this going to effect the agreement with Freed? Given the fact that Steve and Barry’s have long had a questionable financial outlook, why did the city extend the tax giveaway to the real estate developer based on them bringing a bankrupt store to the city?
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