Roundy's plans store in Lakeshore East
(Crain's) — Roundy's Supermarkets Inc. plans to open a full-service grocery store next year in the Lakeshore East development just northeast of Millennium Park.
Magellan Development Group hopes to break ground in about 90 days on this retail building in Lakeshore East, to be called Village Market Center. Roundy's has leased 55,000 square feet in the building. |
The Milwaukee-based grocer signed a lease this week for 55,000 square feet that Lakeshore East's developer says will enable the firm to obtain a construction loan for a low-rise retail building planned for just north of the residential tower at 340 E. Randolph St.
David Carlins, president of Magellan Development Group LLC, says he's in talks with lenders for a roughly $40-million construction loan to finance the 140,000-square-foot building, which is to cost $60 million. Mr. Carlins hopes to get the loan and break ground in about 90 days.
The retail building, dubbed Village Market Center, has been in the works for several years for the 25-acre Lakeshore East complex, which will have more than 3,000 condominiums and apartments when a seventh high-rise tower opens later this year.
Roundy's stepped in after Chicago grocer Treasure Island and Magellan nixed plans for a 27,000-square-foot Treasure Island store there. Roundy's also signed a lease this week for a store in the Bronzeville neighborhood on the South Side and is pursuing another West Loop location after backing out of a planned development there.
Related story: Roundy's exits West Loop lease, in talks on 2 other sites
At Lakeshore East, Fifth Third Bank has also leased space for a branch in the new retail building, and Mr. Carlins says Magellan plans to have a breakfast restaurant there.
"We've got Caffé Rom (located in a nearby apartment building) as our neighborhood coffee shop, but you need a breakfast place," he says. "Now we're looking for an Irish pub."
The restaurant and bank branch mean 70,000 of the building's roughly 110,000 square feet of rentable space will be taken.
The Treasure Island lease, which was signed in November 2005, was in part a casualty of the credit crunch. Mr. Carlins says the deal was structured with a low, below-market rent for the grocer that included a provision for Magellan to share a percentage of sales.
But Mr. Carlins said the credit crunch made it impossible to finance the building with that lease deal. The Roundy's deal has a higher base rent without a revenue-share upside, he says, and also leaves less speculative space to be leased.
Roundy's, which has yet to say what its stores here will be called, now has three Chicago leases: Lakeshore East, Bronzeville and a site on the North Side near the Clybourn Corridor. Company officials also have met officials from Arlington Heights, where the company wants to build a 68,000-square-foot store.
The grocer announced plans to enter the Chicago market two years ago, but its slow leasing pace and the tanking economy led to speculation that Roundy's would bow out.
A spokeswoman says the grocer remains committed to its plan to have about a dozen stores here, which she says will open over the next three to five years.
"We are excited about opening new stores in the city of Chicago," Roundy's CEO Robert Mariano says in a statement. "We look forward to serving customers at Lakeshore East."
