Quantcast

Huge Megamall Replacement Project Shrinks As XSport Fitness Drops Out

By Mina Bloom | September 19, 2017 4:59am
 Last winter, real estate broker Sierra U.S. announced that Jewel-Osco and XSport Fitness were coming to the former mall at 2500 N. Milwaukee Ave. in a brochure promoting the $100 million development. But now the XSport Fitness has fallen through, and the Jewel-Osco deal is shaky.
Last winter, real estate broker Sierra U.S. announced that Jewel-Osco and XSport Fitness were coming to the former mall at 2500 N. Milwaukee Ave. in a brochure promoting the $100 million development. But now the XSport Fitness has fallen through, and the Jewel-Osco deal is shaky.
View Full Caption
Sierra U.S.

LOGAN SQUARE — XSport Fitness is no longer included in the massive Megamall redevelopment.

Terraco, the developer behind the $100 million project, was unable to finalize a deal with the gym, according to Paul Sajovec, chief of staff for Ald. Scott Waguespack (32nd).

It's unclear why the deal fell through. Sajovec said the folks from the development team "didn't go into great detail" when they met with the alderman's office earlier this summer. Terraco didn't respond to multiple requests for comment.

But Sajovec said it's possible that mid-market gyms like XSport are strained right now due to competition with super low-cost gyms such as Planet Fitness and ritzy boutique gyms like Equinox.

There are no plans to find a replacement tenant for the 40,000-square-foot retail space that XSport was going to occupy. In fact, the developer has decided to eliminate the retail space altogether and use the extra space for the residential units, according to Sajovec.

The new plans call for a 73-foot-tall complex, 10 feet shorter than originally proposed. The number of units — 240 — and other major components of the project, such as the sky bridge, will remain the same.

"It was initially going to be a two-level fitness club. By removing those two levels, they replaced some of that space with residential use. That'll allow them to make residential go the entire length of the building, whereas before the residential [units] were only distributed in half of the building," Sajovec said. "It's just a reorganization of the space."

Since the change is minor, the developer only needs approval from one of the city's zoning administrators — rather than the full Plan Commission. Sajovec said the development team told the alderman's office it would alert the alderman once the paperwork was filed. So far, the alderman's office has yet to receive any updates, Sajovec said.

The Jewel-Osco deal is shaky, but not dead. As of June, the development team had yet to finalize the deal with the grocery store chain, "which obviously suggests that there are issues they need to work out," according to Sajovec, who was unable to provide further information.

Terraco never formally announced that XSport Fitness and Jewel-Osco would occupy the large retail spaces, but both were included in promotional materials released by real estate broker U.S. Sierra last winter, first reported by Curbed Chicago.

As far as construction goes, there's no official word on when crews will break ground. The massive site, which spans the 2500 block of North Milwaukee Avenue, has sat empty since crews finished tearing down the Megamall in March.

The indoor flea market, which sold everything from cellphones and shoes to all manner of tchotchkes, lasted more than 20 years, despite being slapped with more than 100 building code violations, a yearlong shutdown, a move by the city to seize it via eminent domain and a 2007 fire that reduced the showroom space to less than a third of its original size.

As with any massive development, there's always a chance the entire redevelopment project, first proposed in spring of 2015, falls through if the developer can't secure the necessary finances. But Sajovec said he doesn't have any reason to believe that'll happen with this project even despite the snags.

"We certainly haven't heard anything from them that they feel like it's not going to move forward," he said.

"They've communicated to us that it's a big project and there's lots of details to be worked out. They feel like as soon as they're able to finalize things with the grocery tenant, they'll move forward."

RELATED LINKS:

Jewel, XSport To Anchor Massive Megamall Development

Megamall Demolition Complete: Logan Square Fixture Gone After 20 Years

Check Out the Total Overhaul of the Mega Mall Replacement Project