After a recent setback in eminent domain proceedings, Calumet City is pushing for Illinois General Assembly approval this month of its proposed quick-take of River Oaks Center mall.
The city last month voluntarily dismissed its Cook County court proceedings that asked a judge to determine how much the city owes Namdar Realty Group for the involuntary purchase of the 96 River Oaks Center Drive property.
“They’re not investing in the mall — they’re not going to invest in River Oaks (Center) mall,” Calumet City Mayor Thaddeus Jones said. “They’ve made that clear, and they’re just holding on to River Oaks mall for what they’re getting out of it right now. And that’s not right to the community, it’s not right to the school districts and it’s not right to the region.”
More than a year after bringing the case, attorneys for the city said they found discrepancies between the land parcels listed in court documents and those the city previously had appraised at a value of $4.6 million and offered to purchase from Namdar for $13.2 million.
Namdar declined the city’s offer, asking for about $40 million for the long-declining mall that has held on to two of its four anchor stores, Macy’s and JCPenney.
Five days before the city petitioned the Cook County court for eminent domain of the property, the realty group filed a lawsuit claiming the city sent a letter to all the mall’s tenants stating it would soon take over the mall and suggested tenants could end up without a storefront. The realty group claimed in court documents that as a result, it suffered damages of more than $50,000, as the letter led multiple tenants to breach their contracts with Namdar.
As the letter was sent by one of the city’s attorneys, Judge Neil Cohen found the city could not be held responsible for its contents and dismissed Namdar’s lawsuit last month.
Neither Namdar nor its attorneys responded to requests for comment.
The city plans to refile its claim within the court system, but in the meantime is asking the General Assembly to grant the quick-take of the property for economic development. Rep. Marcus Evans Jr., D-Chicago, has sponsored the measure.
Quick-take action would give the city control of the mall while the court determines how much Namdar should be compensated.
The city hired a design firm two years ago to draw up a $110 million proposal for the mall’s 11-acre campus that incorporated retail, restaurants and housing. Jones has additional hopes for the eventual public/private development of an “entertainment district” within the 40 acres of space, including the mall’s former Sears anchor store, that the city already owns to provide tax benefits and serve as an economic engine for Calumet City.
Redevelopment of the entire area could cost between $500 million and $750 million, the city estimated in court documents, with plans for the entertainment complex including an 80-room hotel, a sports complex, mixed-use housing and a theater.
Jones, who is also a state representative, said two developers remain interested in the project, and he expects the redevelopment to undergo multiple phases once the city has complete control over the property.
“Nobody has $800 million to pour into a potential project,” he said. “The first step is getting this property, and once we get this property, then investors will come.”
He said he’s looking at other former mall areas for inspiration, including the Evergreen Plaza redevelopment of the former mall in Evergreen Park.
He said the city can’t afford to allow River Oaks to create an “eyesore for the community,” following in the footsteps of the former Lincoln Mall in Matteson or Dixie Square Mall in Harvey.
“We have so much regional impact,” Jones said. “We have almost a million people through our traffic counts, through IDOT counts, driving through Calumet City and 159th Street and Sibley.”
He said if the Chicago Bears choose northwest Indiana as the location for a new stadium, the urgency to transform River Oaks to turn Calumet City into a destination for travelers would only grow.
“Just imagine how much traffic we’ll get once this development goes up,” Jones said.
ostevens@chicagotribune.com
