Beyond Retail

Saturday, May 20, 2006

Case Study: Northbrook Court, Northbrook, IL

Recently, I was up at Northbrook Court.

What is Northbrook Court, you might ask? It's a shopping center located about 25 miles north of Chicago, in the village of Northbrook. It also happens to be a rather upscale shopping center, and given that it just happens to be owned by General Growth Properties, which just so happens to be building a rather upscale shopping center that just happens to be in MetroWest.

In any case, Northbrook Court has a somewhat interesting history: basically, it wasn't supposed to be here. In 1976, a developer proposed building 2,300 apartments on a large piece of unincorporated land near Northbrook, IL. Northbrook didn't want the apartments to be built, but the village didn't really have a say as the land was unincorporated. As the developer faced a long court battle over the apartments, he proposed to build a shopping center with a small residential complex. That time, Northbrook agreed. Although the mall would be built, the neighboring village of Highland Park ended up suing the state of Illinois: first for a share of the mall's tax revenue; then later over the annexation going to Northbrook. Both suits failed.

Initially, the mall had a fairly stale batch of retailers: A lackluster Sears was one of the mall's first anchor stores which would replaced in 1983 by the equally downmarket J.C. Penney. Together with the slightly-more upscale I.Magnin flagshipped the mall that shouldn't have been built. At one point, two of the mall's four anchors were vacant. Like with the Natick Mall, it was located in a financially-attractive area, but shoppers were instead several miles away to the Old Orchard Mall in Skokie (or in Natick's case, The Mall at Chestnut Hill in Newton). The mall got some moderate national attention in the mid-1980s, where the mall was used for several scenes in the movie "Weird Science".

Eventually, the mall was able to snag Lord & Taylor as a tenant, along with a Neiman Marcus that refused to stay open on weeknights. Yet while the Neiman Marcus was fairly successful with its unique schedule, Neiman's shoppers rarely entered the mall corridor. In 1995, the mall was entirely renovated, and filled the vacant J.C. Penney site with a the last full-service Marshall Field's store to ever open (not unlike Natick, with the last Jordan Marsh store to open), and in 1997, Northbrook Court added a 14-screen General Cinema movie theater on the site of the I.Magnin (which had been vacant for three years before any plans were pitched). The mall also served as a testing ground for the GapBody chain in 1998, and had been a testing ground for the forgettable "Gap Shoes" chain in 1992.

In 1998, General Growth acquired Northbrook Court from the Canadian developer Grosvenor, which was around the same time that the company acquired the Natick Mall. Slowly, changes were made: General Growth worked to find different tenants than the ones at Old Orchard. By 2000, many changes were on the way. Upscale Italian restaurant Bice opened a location at the Court. In 2001, Crate and Barrel opened a massive, 36,000 sq. ft. flagship store on a mall outlot. In 2002, the mall announced plans to add more restaurants, high-end boutiques, and children's stores, while that same year opening the first Land of Nod store. In 2003, a 500-million dollar renovation brought a children's area to the mall.Yet in 2005, the mall manager noted in an interview that the mall wasn't doing well as too many of the mall's tenants targetted children. Also in 2005, the upscale Di Pescara and food court-fodder Magic Pan opened as part of an agreement with local restauranteer Lettuce Entertain You Enterprises.

So, what can we learn about upscale malls for Natick? For one, the MetroWest area doesn't have an upscale mall like Old Orchard in such proximity. The Newton malls may have more upscale stores than Natick, but access to the Atrium Mall and The Mall at Chestnut Hill, both on Rt. 9, isn't all that easy: meanwhile, Old Orchard is a gigantic mall, located directly off a major interstate. And Natick can expect some issues getting that target customer in unless it is planned right. Right now, Northbrook is looking toward restaurants and upscale stores to get the customers in; that's exactly what GGP is planning for Natick. Should it be executed successfully like Tyson's Galleria outside of Washington, D.C.; we'll have a giant success. The affluent area demographic is there for the Natick Mall, and the retailers all want in. If GGP gets the right tenants in on the first shot, which I am optimistic that they will, we won't have a Northbrook on our hands.