Costco Fills Ward's Void at Randhurst

MOUNT PROSPECT, IL-The 212,000-sf void at Randhurst Shopping Center caused by the bankruptcy of Chicago-based Montgomery Ward is being filled by Costco. The warehouse retailer is coming to the Rouse Co. center after the village approved a $5-million incentive package.

Costco will get the $5 million over 15 years through the village’s sales tax rebate program if it produces sales tax revenue that at least matches the amount generated at 1.3-million-sf before the departures of Ward’s and JC Penney, another retailer that exited its 198,000 sf earlier this year.

However, Costco should be up to the task, given its average store generates $110 million a year in sales, which would translate to $1.25 million a year in village revenue after it opens in fall 2002. That would make it the village’s top taxpayer.

“Over the past year, as the economy has slipped into recession, discounters and warehouse clubs have seen significant gains, have even been thriving, while traditional department stores and retailers have struggled,” says Mount Prospect village manager Michael Janonis. “Older regional malls are at a turning point — either change or become obsolete. We are working with The Rouse Co. to see how we can help change Randhurst to meet the needs and preferences of consumers. Randhurst is a vital part of our local economy and we need to take extraordinary measures to ensure its viability.”

Adds Mount Prospect Mayor Gerald Farley: “The traditional shopping center of the 1960s and ’70s is being transformed. We are adjusting to the current market and consumer preferences by welcoming Costco as an addition to Randhurst.”

Although lease terms were not disclosed, the deal could be worth $5 million a year to Rouse Co. is it is at the company’s average rental rate across its portfolio.