Northbrook OKs residential to revive Northbrook Court mall; retail to come

Chicago Tribune

24-03-2025

The Northbrook Village Board has given Northbrook Court a green light to begin developing residential units before rehabilitating the struggling shopping mall's retail areas.
After a special joint session of the board and Plan Commission on March 11, trustees approved special permits for the mixed-use planned development and amended the redevelopment and economic incentive agreement between the village and the developers of the mall to allow residential work before or during retail development.
'The developer is saying we want to be able to market the residential property and build residential units simultaneously or ahead of retail property because of market conditions,' Village President Kathryn Ciesla said.
High interest rates and the economy have been an impediment to developing the retail property first, Ciesla said.
'But they want to move forward on the project, so they want to start marketing the residential,' she said. 'They hope and expect the economy will improve, and that with the addition of residential development, retail will soon follow.'
Northbrook approved the redevelopment agreement with Northbrook Court NewCo and Northbrook Anchor Acquisition in 2023, Ciesla said. The agreement created a tax increment financing, or TIF, district and a business district – two redevelopment tools allowed by the state on 'blighted' property – on the 100-acre site.
The tax incentives offered by those programs and another sales tax incentive included in the redevelopment deal will not be activated until the retail portion of the project is developed, said Amy McEwan, director of development and planning services for Northbrook.
'Until retail development is started and actually in operation, the business district designation has no particular effect,' McEwan said. 'The financial incentives are connected with retail rather than residential.'
'There are only certain things a TIF can pay for,' Ciesla said. 'We put that safeguard in place. We said you can develop residential if that's what the market dictates, but you can't spend TIF money until you develop retail and have 50 percent of retail spaces leased. We locked them down for the incentive to build retail.'
The redevelopment proposal calls for a variety of residential units, similar to zoning for the Willow Festival project in Northbrook, Ciesla said.
'One area is for multifamily or apartment-type buildings,' she said. 'The others may be row houses or townhouses. They're designed to accommodate different types of buildings. We appreciated their ability to market each different type of space. For example, if the market calls for townhomes now, they would have that flexibility.'
The developers did not commit to a timeframe for when the project will begin, but said the earliest possible groundbreaking would be in summer 2026, McEwan said.
'We're trying to stay flexible and help them get something going,' she said. 'We're using the tools we have trying to be a good partner and get this project moving.'
The TIF designation effectively freezes property taxes at the current level and allows municipalities to use increases in those taxes to pay for development costs for up to 23 years. Business districts also last 23 years, but allow municipalities to increase sales or hotel taxes by up to 1 percent to cover eligible costs.
Northbrook Court NewCo and Northbrook Anchor Acquisition, which are affiliates of Brookfield Properties, want to redevelop the mall, but have identified a 'gap' in the market that required the tax incentives, Ciesla said.
'Northbrook gave them incentives to help the land be developed,' she said. 'As much as we want them to move forward and go, go, go, Brookfield Properties is a private company. They're going to do it in the time they can do it because they have to answer to shareholders and investors.'
Both Ciesla and McEwan said they are confident in the redevelopment proposal presented by the companies.
'They said they are committed to the project as designed,' Ciesla said. 'It appears to me in looking around and talking to other village presidents and government officials that this is kind of where we are today. Things are not necessarily moving, but we are hopeful. We want it to go. On the village side, we have done everything we can do.'
'I'm absolutely hopeful,' McEwan said. 'Whenever you have property looking at major redevelopment, that is important to the people and the community. The village has invested a significant amount of time and resources working with Brookfield Properties to develop a plan that meets the needs and expectations of the community.'