Westgate Mall in Racine will be redeveloped by a newly formed joint venture led by Investment Real Estate Services, Inc., (IRES) of Des Plaines, Ill., which recently acquired a 50% interest in the 139,400-square-foot facility from Westgate Holdings, LLC.
Westgate Holdings, which retains half ownership of the property, purchased the mall last year through a foreclosure sale.
Located along Washington Avenue between Green Bay Road and Ohio Street on the west side of Racine, Westgate Mall was built in 1979. The site currently houses an Old Country Buffet and a Big Lot furniture store. A ShopKo department store and two bank facilities share the site but are owned separately from the mall itself. Westgate has parking for more than 300 cars.
In announcing the redevelopment, Michael J. Christie, president of IRES and managing partner of the Westgate Mall joint venture, noted that several redevelopment concepts are being considered.
"The fact that Westgate Mall is half vacant and has had a mixed record as a retail venue led us to the conclusion that, going forward, we need to look at some fresh ideas for this property," said Christie. "We intend to retain the retail uses at the north end of the mall building and are looking at other concepts for what are now the central and eastern portions of the enclosed mall adjacent to ShopKo."
At the moment, according to Christie, the options being explored focus on making Westgate Mall a mixed-use property, either by converting some of the retail areas into office space or demolishing part of the retail space and developing senior housing on the site.
"We think there could be substantial demand in this area for either office space or senior housing that offers independent living," said Christie. "Redeveloping the mall into office space would be the most economical alternative and would permit us to go into the market with extremely competitive rental rates. Developing senior housing would require a much larger investment, but the adjacent communities of single-family homes include many households that are at or near retirement age and may be looking for a change in lifestyle."
Christie said he already has had preliminary discussions about the redevelopment with a number of local officials, including Mayor James M. Smith of Racine and Brian O’Connell of the Racine Department of City Development, as well as Gordy Kacala of the Racine County Economic Development Corp.
"We are exploring how the community feels about making Westgate a mixed-use facility, rather than one that is exclusively retail," said Christie. "Mixed-use development has been quite successful in many places, but it would be a new concept for Racine. Obviously, a successful, well conceived mixed-use facility is far preferable to a struggling retail mall."
According to Christie, the joint venture has budgeted approximately $1 million as an initial investment in the redevelopment, with the actual amount to be invested dependent upon the final redevelopment plan.
Investment Real Estate Services, established in 1995, provides advisory and property management services to its partners for leased investment real estate. IRES currently manages a portfolio with a market value in excess of $18 million. The primary focus of the company is retail, office and warehouse properties in the 1-94 Corridor connecting Chicago and Milwaukee.
May 10, 2002 Small Business Times, Milwaukee
