Sears Roebuck & Co. announced Thursday that it will close 89 stores nationwide, raising concerns about whether the retailer still plans to anchor the city’s Sherman Plaza development. But Sears officials maintain plans for the Evanston store are still under consideration.
Sears National Tire and Battery Stores in Chicago, Peoria and Champaign, and hardware stores in Naperville, Elgin, Darien, Bartlett and Bloomingdale are slated to close by the end of March.
“It’s not unusual for us to evaluate our store locations,” said a Sears representative who declined to give her name. “We close some stores; we open others. The Evanston store is one of the locations being considered as we move forward.”
Sears’ decision to close the stores came one week after retail chain Montgomery Ward & Co. filed for bankruptcy. The proposed Evanston store would be the centerpiece of the plaza, a $110 million downtown redevelopment plan that also would include a parking garage, a luxury apartment building for senior citizens and 135,000 square feet for specialty stores.
Ald. Steven Bernstein (4th) expressed concern about Sears after realizing Evanston City Council had yet to see anything in writing verifying the retailer’s intentions to open a full-line store in the Sherman Avenue development.
“We’re in the process of negotiating a lease agreement,” said Sherman Plaza developer James Klutznick of Thomas J. Klutznick Co. “Sears is a very viable store – there’s no one like it in the market today.”
Closing unprofitable stores, even 89 of them, can be a healthy thing for a retail chain to do, said retail analyst Kurt Barnard of Barnard’s Retail Consulting Group, a former Kellogg Graduate School of Management instructor who has specialized in studying retail stores for more than 40 years.
Pull-outs by retailers, however, can hurt developers such as Klutznick when they bank on a store without first procuring a signed agreement, Barnard said.
“If the developer has nothing in writing, then he has nothing to take to court and nothing to take to the bank,” Barnard said. “Anyone who allows themselves to get into any commitment without anything in writing is a fool.”
But City Council already has moved on some measures in hopes that the proposed Sherman Plaza will materialize, including granting the developer a $2.5 million tax subsidy and voting to condemn the two properties that contain Osco Drug, 1630 Sherman Ave., and Olive Mountain Restaurant, 814 Church St. In December, when the city began efforts to “quick-take” the properties, Bernstein said, the developer implied time was of the essence and that Sears wanted to open its store quickly.
Quick-taking allows the city to condemn properties in as few as 60 days, a process that often takes as many as 18 months.
“Two years ago when we decided to put this thing together, we wanted to do it privately,” Klutznick said. “We’re hopeful that with condemnation proceedings, we can come to agreement through negotiation.”
Delays in acquiring the Olive Mountain and Osco properties have not slowed the leasing process for the remaining Sherman Plaza retail space, said John Terrell, senior vice president of development for Prime Group Inc., Klutznick’s partner in the proposed venture.
“Actual retail activity has been very brisk,” Terrell said. “We’re very happy about it.”
With nothing on paper from Sears, however, Bernstein said he is happy that none of the council’s actions are cast in stone.
“Until the actual transfer of ownership,” he said, “nothing is irreversible.”
