"Chelsea's done a great job of becoming the dominant provider ofspace in that sector, and they are very selective about theprojects they pursue," says Simon Property Group president andchief operating officer Richard S. Sokolov in a recent earningsconference call. "They only pursue projects where they have demandfor their manufacturers in that market."

A similar project co-developed by Chelsea and Simon in Orlandoopened 100% leased, Sokolov notes. "The leasing that we'reexpecting 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 ChicagoPremium Outlets up front, the city will eventually reimburse theco-developers 25% of the cost. The money will come through taxincrement financing and reimbursement of the city's share of salestax revenue generated by the new outlet mall, set to open in thesecond quarter of 2004.