A proposed Roundy’s supermarket in Ravenswood is gaining traction, as one of the biggest local development firms is now leading the project and the city is poised to consider providing tax-increment financing.

At a community meeting Monday night, Magellan Development Group LLC was revealed as the new lead on the almost $50-million development slated for a 6.5-acre site near the corner of Lawrence and Ravenswood avenues in the North Side neighborhood. Sears Holdings Corp. owns the property.

In addition to a Roundy’s store, the project is to include a health club, a Sears auto center and a four-level parking garage that would be used for shoppers and commuters from a nearby Metra station.

Alderman Gene Schulter (47th) also told the roughly 200 residents at Monday’s meeting that the most controversial part of the previous plan — an 11-story condominium tower — has been put on hold indefinitely.

The project will be up for a full community vote at a meeting May 27. If approved, it would move on to the city, which could give its go-ahead as early as this fall. That would clear the way for the supermarket, dubbed Mariano’s Fresh Market after Roundy’s CEO Bob Mariano, to open in spring 2012.

Mr. Schulter, who endorses the development, says it’s not yet known how much TIF money would be allocated.

“The only way this works is by having some TIF money,” Mr. Schulter says. “We’re really very, very happy about keeping this alive during this time. In many communities, people have just folded their decks.”

Chicago-based Magellan will lead the development by partnering with Sears, which may remain the landowner, and brokerage firm Sierra Realty Advisors. Details of the arrangement are still being finalized.

Chicago-based Sierra has represented Sears for more than three years in its attempts to develop the site, which is used for a Sears auto center and as a surface parking lot for Metra commuters and others, including shoppers at the Sears department store to the west at 1900 W. Lawrence Ave.

Sears and Sierra previously had been working with Wilmette-based Crossroads Development Partners LLC on the project. But Crossroads, a two-year-old firm, effectively bowed out about a year ago after Sears opted to take a more passive role in the project.

“It was best for us, for our reasons, not to proceed under a new structure,” says Crossroads founder Michael Nortman.

Sierra, in turn, late last year brought in Magellan, which is best known as a condo developer. But the Chicago-based firm at the time was working to bring a Roundy’s store to its massive Lakeshore East development downtown. That store is now under construction.

“Since we were already working with Roundy’s on a multi-level retail center, we thought we could use our experience on this center,” Brian Gordon, a Magellan vice-president who is leading the project, says in an e-mail. “Additionally, we believe urban mixed-use will be a driver for new development.”

Magellan plans a three-level retail building, with Roundy’s occupying about 150,000 square feet on the first two levels. The gym would take 45,000 square feet on the third level. About 7,000 square feet would remain on the first level to be leased.

The second building would have a parking garage that could accommodate as many as 600 cars, depending on the size of Metra’s commitment, as it will pay to have its spaces built. The garage also would house the Sears auto center.

Mr. Gordon says Roundy’s is close to finalizing its lease and that there are two prospects, which he wouldn’t name, for the health club space.

A spokeswoman for Milwaukee-based Roundy’s Supermarkets Inc. confirms the grocer has signed a letter of intent for the Ravenswood site, but wouldn’t comment further. A company executive was at Monday’s meeting. A Sears spokeswoman didn’t return a call late Tuesday.

Under Magellan’s plan, about 3.5 acres of the site will remain vacant and probably will resurface someday as a residential project by Magellan or another developer. But because of the housing market and at the alderman’s request, those plans are on hold.

“It wasn’t a hard thing to give up, because there’s no market,” says Marc Offit, Sierra Realty’s CEO. “The grocery and health club are going to be great for the area. There’s definitely a hole there for a better grocer.”

The community meeting was first reported by online news site Center Square Journal.

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SOURCE
Crain's Chicago Business
May 5, 2010