Retail/apartment project planned for Roosevelt Road

A rendering of a mixed-use retail/apartment project planned by the Bond Cos.

(Crain's) — Competition for retail tenants along Roosevelt Road in the South Loop may soon get a little tougher.

The Bond Cos., a Chicago developer, plans to build a mixed-use project with about 200,000 square feet of retail space and as many as 460 apartments between Canal and Clinton streets just north of Roosevelt.

Retail development along the shopping strip has stalled since the real estate crash and recession, but many still believe it's only a matter of time before the area becomes the South Side's answer to the busy North and Clybourn retail district near Lincoln Park.

“We have lots of retail interest at the moment,” says Robert J. Bond, co-founder and president of the Bond Cos. The retailers already there “have been extremely successful.”

Roosevelt Road has filled in over the years, with a Target store, Jewel-Osco and ShowPlace Icon cinema complex east of the Chicago River and a Home Depot, Best Buy and Whole Foods to the west. Yet the newest retail development in the neighborhood, the 398,000-square-foot Roosevelt Collection, completed in 2010, is about 75% vacant, the victim of bad timing.

As it courts tenants for its project, Bond will face competition from Roosevelt Collection, a development at Roosevelt and Clark Street now owned by a joint venture including Chicago-based McCaffery Interests Inc. McCaffery has the advantage of having space immediately ready for occupancy. The developer also may be able to offer good deals on rent because it acquired the Roosevelt Collection at such a low price, says retail broker Allen Joffe, principal at Baum Realty Group in Chicago.

But Bond's project, which sits across the street from a Whole Foods-anchored shopping center, is surrounded by more retail and offers stores with direct street access.

“We are connected to the street grid,” Mr. Bond says. “We are part of the fabric of the neighborhood.”

Bond plans to develop the project on the site of the former headquarters and warehouse of Chernin's Shoes Inc., which sits on the north end of the block bordered by Canal, Taylor and Clinton streets and Roosevelt Road, which is to the south.

Local developer John Terzakis and Chicago-based Equibase Capital Group LLC planned to convert the 225,000-square-foot building into a shopping center, but that plan fizzled and Bond took over the property through a consensual, non-judicial foreclosure last October, says Mr. Bond, who plans to raze the existing structure and build anew.

Related story: Another shopping center planned for South Loop

Bond would need a zoning change from the city to build the project, which would sit on a 3.9-acre site. The firm has deliberately limited the height of the project to about eight stories — two for retail and six for residential — a move Mr. Bond hopes will allow the approval process to go smoothly.

Mr. Bond has discussed his plan with Ald. Robert Fioretti (2nd), whose ward includes the property. Mr. Fioretti did not return a phone call.

If the city signs off on the development, Bond faces the challenge of securing construction financing, still a tough task in the current market. Though lenders have opened their wallets for new downtown apartment developments in the past year, many remain leery of complicated mixed-used projects, especially those with a lot of retail space.

But the local retail property market is rebounding. The vacancy rate for retail space in the Chicago area has fallen for seven straight quarters, hitting 9.5% in the last three months of 2011, according to CBRE Inc. And Mr. Joffe, the retail broker, says demand for space along Roosevelt Road is especially strong.

Rents there, he says, “are definitely on the way back up.”