Osco plan puts hitch in bid to buy land

In spearheading the construction of Skokie’s Old Orchard shopping center in the 1950s, internationally acclaimed developer Philip Klutznick dealt a critical blow to downtown Evanston’s retail business.

Now, nearly 45 years later, his son James has a plan to fill it with new life, except for one final obstacle —purchasing the land that would complete the deal.

Stuart Handler, current owner of the 1630 Sherman Ave. property that the younger Klutznick wants to acquire, submitted in July a proposal to the city’s Site Plan and Appearance Review Board to renovate his property. The move is stalling private negotiations that would end in Klutznick’s ownership of the property, which currently houses Osco Drug.

After months of talks, Klutznick, his colleagues at Thomas J. Klutznick Company and their partners at Prime Group Inc. cinched a deal with Sears, Roebuck and Co. in mid-July to include a full-line Sears department store in Sherman Plaza, the firm’s proposed mixed-use development slated for construction in downtown Evanston.

City Council on Sept. 10 approved a resolution that declared its intent to move forward on condemnation proceedings should Klutznick, Handler and an undisclosed third party fail to reach a decision. The condemnation would allow the city to acquire that property and others, claiming to act in the public’s greater interest.

The threat to incite condemnation proceedings comes after several moves by the council to push the project forward. On July 24 the council voted 7-1 to furnish Klutznick a $2.5 million tax increment financing subsidy which will enable him to complete the Sears portion of the project.

“We’re sure hoping we can work something out privately,” Klutznick said. “We’re negotiating with all the property owners and/or lessees. People have every right to negotiate what they feel is a fair deal.”

Handler’s proposal for the site includes adding two or three levels of parking and more than 10 floors of condominiums to the existing structure.

But city officials said Handler’s proposal is unlikely to be passed, given the scope of the Klutznick project.

Handler could not be reached for comment Monday night.

Klutznick’s $100 million commercial/residential project will encompass nearly the entire block between Church and Davis streets and Sherman and Benson avenues and also will include 135,000 square feet of specialty retail space, a 1,400-car parking garage and a 200-unit retirement community.

The project is expected to bring about 500 permanent jobs to Evanston and generate about $2.5 million in additional tax revenue for the city per year.

The council’s $2.5 million subsidy will help fund construction-related expenses for the project, specifically the demolition of the city’s Sherman Avenue garage.

Through the subsidy, the city will tap into the increased property-tax revenues that are expected from the development to pay for improvements to the property now.

City Manager Roger Crum said this subsidy is a great deal for both Evanston and the developers. It allows the city to demolish and rebuild its deteriorating garage, which would have to be replaced anyway, without raising property taxes. It also helps the developers cover the additional costs that come with construction in an urban area.

If negotiations continue as planned, the project would be completed by fall 2002.