"Chelsea's done a great job of becoming the dominant provider of space in that sector, and they are very selective about the projects they pursue," says Simon Property Group president and chief operating officer Richard S. Sokolov in a recent earnings conference call. "They only pursue projects where they have demand for their manufacturers in that market."
A similar project co-developed by Chelsea and Simon in Orlando opened 100% leased, Sokolov notes. "The leasing that we're expecting is very rewarding," he adds.
Although Chelsea Property Group and Simon Property Group, Inc. are paying the estimated $96 million cost of the 435,000-sf Chicago Premium Outlets up front, the city will eventually reimburse the co-developers 25% of the cost. The money will come through tax increment financing and reimbursement of the city's share of sales tax revenue generated by the new outlet mall, set to open in the second quarter of 2004.
"More than $2.5 million in annual sales tax revenue will be realized by the city of Aurora once the obligation of the TIF is realized," says Aurora Economic Development Commission executive director Sherman L. Jenkins.
City officials and representatives from Chelsea Property Group recently broke ground on the project.
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