The Roseland, NJ-based retail REIT has options to buy land for its 430,000-sf, says Aurora Economic Development Commission Executive Director Sherman L. Jenkins, and expects to close on a purchase soon. However, the REIT also will hold meetings with homeowners living near the site, and the US Army Corps of Engineers will need to review plans involving the nearby Indian Creek watershed area, says Bill Catching, assistant chief of staff for Aurora. "The only problem I could foresee would be the Army Corps of Engineers," Catching says.

"The site presents some major challenges," says Mark Silvestri, director of development for Chelsea Property Group. "We feel, however, that we can create a first-class shopping environment while also providing significant flood control benefits to the immediate area."

The proposed Premium Outlet Center will include approximately 100 stores representative of the REIT's lineup, but vice president of marketing Michele Rothstein declined to name specific stores that have pre-leased space in Aurora, or the number of retailers making a commitment. However, Jenkins says there will be no duplication of outlets with Urban Shopping Centers, Inc.'s 1.44-million-sf Fox Valley Shopping Center in Aurora, anchored by a Sears, JC Penney, Carson Pirie Scott and Marshall Fields.

"(Chelsea) certainly will tap into the Naperville-Aurora market," says Chicago-based retail consultant John Melaniphy III. "But the success of the development will be determined by the ultimate tenant mix."

Jenkins says approximately 800 jobs will be created by the outlet center, which also will generate $2.5 million dollars a year in sales tax revenue to the city. That figure translates to $581 psf, 73% higher than the REIT's overall average.

"We selected Aurora because we felt there was a synergy in the type of upscale centers we build and the sophisticated, brand-conscious and quality-minded consumers who live in and around this growing market," Rothstein says. "Shoppers who seek the finest brands at outlet prices and desire a more upscale shopping atmosphere will appreciate the difference in what we will be bringing to Aurora."

While Aurora and eastern neighbor Naperville have seen significant growth push their populations over 100,000 each, Melaniphy notes I-88 kind of dies past Aurora. That's why "nothing like this has developed out there. They're kind of swimming upstream."

The REIT has an interest in 27 outlet malls with 8.1 million sf, with their Lighthouse Place Premium Outlet in Michigan City, IN its closest property to Chicago. Other outlet malls in the market include Huntley Prime Outlet Mall in Huntley, IL, though the tenant mix does not match the upscale lineups at Chelsea Premium Outlet Centers.

"To me, that's a good ways away," Catching says. "When you look at the huge residential growth here, there's a micro-regional market here for them."

Discussions with Chelsea Property Group have been on-going for three-and-a-half years, Jenkins says, as the REIT negotiated option and sales terms with the landowner. "Farnsworth worked because of access--a full interchange, Farnsworth Avenue serving as a major north-south thoroughfare and the visibility that thesite offers to travelers on the East-West Tollway (I-88)," he says.

Instant Insights /

Chelsea Property Group Proposes $80-Mil Upscale Outlet Mall At I-88 Interchange

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